Forecasting is one of the most powerful tools in construction management. From projecting costs and revenue to planning manpower and resources, forecasting helps contractors stay profitable, anticipate challenges, and keep projects on track. Yet despite its importance, forecasting remains a manual process for many contractors relying on spreadsheets even when they have ERP (enterprise-resource planning) or project management software.
The Reality of Construction Forecasting Today
Forecasting backlog provides insights into future workload, revenue, and cost, measured by:
- Time-Based Backlog – The months needed to complete outstanding projects.
- Cash-Value Backlog – The total expected revenue from these projects.
- Dollar-Based Backlog – The total contracted work still uncompleted.
Beyond backlog, profit and loss statements are projected month-to-month and year-over-year to assess financial health. Yet, many contractors still export data from disparate ERP, project management, and accounting software to Excel for final calculations, adjustments, and scenario modeling.
This approach not only takes significant time but also introduces a high risk of human error. One small miscalculation or outdated data source can ripple through an entire forecast, leading to poor decisions and costly overruns.
WIP Reporting: A Critical Yet Manual Process
A key part of forecasting is WIP (Work in Progress) reporting, which tracks project costs and progress via metrics including total contract value, estimated costs, costs to date, received revenue, and percentage completion,
Despite its importance, many contractors still manage WIP reports in Excel rather than an automated system.
Project costs include line items such as manpower, equipment, overhead, subcontracts, materials, and so on.
Manpower planning has tremendous real world complexities including managing crews across multiple job sites, timelines, and skillets.
The Overlooked Challenge: Manpower Forecasting
One of the biggest gaps in ERP (enterprise-resource planning) forecasting is manpower planning—essential for self-performing and specialty contractors. Effective workforce forecasting should answer:
- How long will a job take?
- What skill sets and how many workers are needed?
- How much will labor cost (union, contract, employee workers)?
Most ERP systems lack these forecasting tools, forcing contractors to rely on spreadsheets. A smarter approach would provide real-time visibility into workforce needs, preventing over-staffing (higher costs) or under-staffing (delays and rework).
The Future of Construction Forecasting: Smarter, Faster, More Accurate
A modern ERP should forecast the future, not just track the past. Yet, most systems still don’t offer manpower forecasting, leaving contractors juggling spreadsheets.
Modern contractors should evaluate ERP systems based on the following criteria in mind.
Look for software that automates backlog tracking, WIP reporting, and manpower planning—all in one centralized platform. A sophisticated ERP system that accounts for the real-world needs of contractors means you can eliminate spreadsheets, optimize costs, and plan more accurately with real-time data.