A Valuable Solution: The Ins and Outs of Specialized Software for Construction Estimating
Greg Norris, B2W Software
There’s an adage in construction that every dollar earned begins with the estimate. In a highly competitive environment, specialized software for estimating can be an important ally in winning the right jobs at the right price.
These applications deliver advantages over spreadsheets or manual processes. Estimators can work much faster to complete more bids. At the same time, they can be more accurate, so the race to work faster doesn’t increase errors and risk. Finally, estimating software can free up time and provide features to assist with strategy. The time estimators might have spent chasing and calculating figures can instead be used to evaluate alternative scenarios and options.
How estimating software works
There are a wide range of software applications available for various estimating requirements and construction sectors. Most work in a similar manner. Contractors typically pre-populate databases in the software with their baseline costs for labor, materials and equipment required for the work they perform. Estimating applications also allow them to group these cost items together into frequently used templates or cost structures to reflect repetitive or regular job requirements. A paving company, for example, might create a template for a standard paving crew that includes the daily cost for a paver, rollers, related equipment and the employees that operate those assets.
With this cost data already in place and organized, estimators are not starting from scratch every time they put together a new bid. They can pull information from the databases to match the bid specifications relatively quickly and with confidence in their accuracy. They don’t have to search in various places for the latest pricing.
Formula errors and miscalculations, two of the riskiest liabilities with spreadsheets and manual processes, are also eliminated. With the specialized software, the math is done automatically and reliably as the bid is built. Automated auditing and error checking can provide further safeguards against errors.
Additional Software Features
In addition to these basic principles, estimating software can provide additional capabilities that save time and improve accuracy.
One is the option to organize change orders within the base bid and have them appear as independent nodes in the menu structure. Scope changes after the original bid is complete are an everyday challenge in most construction sectors, and these capabilities allow estimators to create, manage and track them quickly and easily.
Some estimating applications can send RFQs automatically to subcontractors and vendors and then assist in a methodical analysis of the submitted quotes. General contractors can then see and select the lowest bidder or split the work among multiple bidders to get the lowest possible package price. The software also makes it easier to make cost comparisons when they are evaluating the option to self-perform various aspects of a project or sub them out to other contractors.
Reporting and analysis is another area where specialized software can provide a big advantage over spreadsheets. Being able to run reports across selected ranges of previous estimates with a few clicks instead of a lot of time-consuming manual effort is extremely important to bidding strategies. This allows contractors to review historical costs for materials or tasks, margins and variances with actual costs, win-loss ratios, subcontractor performance and a wide range of other data.
Estimating software can also come pre-loaded with cost item databases specific to U.S. states. This speeds up bidding for DOT projects. Estimators simply populate these state databases with their own costs, download electronic bidding system (EBS) files, conform the estimate automatically to the required DOT format, and upload for submission.
Implementation and Training
Switching to specialized software from manual processes or spreadsheets may seem like a big and intimidating step but, with the right implementation program and training, it doesn’t have to be.
Contractors contemplating the move should look for a software provider that has a documented and structured implementation process, but they should make sure that the process is not so rigid that it can’t be adapted to meet any specific needs of company and its estimating team.
A standard implementation begins with introductory meetings online or over the phone to establish the process, timeline and who will do what from the contractor and supplier sides. Hosting requirements, through on-premise servers or the Cloud, should also be covered, along with any integration requirements related to accounting systems or other software.
Building cost databases is the next step. This essentially involves aggregating cost information companies already use or want to use in their estimates and organizing in a format compatible with the software application. The exercise is obviously unique for every company. Templates and best-practice experience from the software supplier can facilitate the process.
Training also depends on the capabilities of the estimators at each company and their prior experience with software. In-person or online options are usually available. Some contractors opt for a basic training program to get started and then add more in-depth training once they have had time to use the software and get a better sense of what they may need more help with.
Most suppliers recommend that contactors begin software training after the cost databases are in place. This personalizes the experience, enabling estimators to work with their company’s own specific data and templates rather than a generic training database.