| When you first investigate computer based | | | | databases). This creates a very inflexible |
| estimating software, you will find that there | | | | solution which requires the construction |
| are many software vendors selling solutions | | | | professional to either adapt to the software |
| which range from a few hundred dollars to | | | | or simply decide not to use the software. |
| many thousands of dollars. In fact some | | | | |
| estimating software packages can cost upwards | | | | The best estimating software solutions should |
| of 15-20 thousand dollars and in some cases, | | | | allow the construction professional to |
| as high as $100,000. That is quite a range | | | | completely leverage existing industry |
| of price. | | | | database cost information as well as provide |
| | | | the ability for the construction professional |
| Often, estimating software is selected based | | | | to create their own costbook database of |
| upon the cost, features, functions, reviews, | | | | information and even combine the two. This |
| word of mouth, or other avenues. In many | | | | should be extended to have the ability to |
| cases, potential customers do not consider | | | | create as many costbook databases as the |
| how they are doing their estimating processes | | | | construction professional would like to |
| today, what they would like to improve, how | | | | accommodate multiple types of estimating |
| automation can, will, or will not help them, | | | | situations. |
| and what an estimating system should do for | | | | |
| their business. | | | | A quick word on the estimating process. The |
| | | | most accurate method of estimating is to use |
| In many cases, the construction professional | | | | the Unit Cost Method of estimating. This |
| will try and find a way to adapt their | | | | means that each material item in a costbook |
| business to the way a software package | | | | database would have at least a material and |
| operates, rather then determine the best way | | | | labor cost. Even better if the item provides |
| to adapt the software to enhance their | | | | for the ability to track subcontract and |
| current way of doing business. In many | | | | equipment costs and well as labor rates. |
| cases estimating software may not be flexible | | | | These costs are then defined for the item at |
| enough to allow a construction professional | | | | the "unit of measure". |
| to "customize" the software to work in | | | | |
| conjunction with the best business practices | | | | So for example, you could be working on |
| of the company. | | | | reinforcing steel in a foundation and putting |
| | | | in 1/4" diameter, #2 rebar. This item is |
| An example of this is the cost information | | | | typically categorized by the LB (foot pound) |
| which is provided by many of the more | | | | as the Unit of Measure. There might be a |
| advanced construction estimating software | | | | material cost per LB of .78 and a labor |
| vendors in the market. Often, you will see | | | | charge of .76 to install the rebar for each 1 |
| software vendors either providing their own | | | | LB. The Unit Cost Method of estimating would |
| cost data information (often on a monthly | | | | take the material and labor costs and |
| subscription basis), or they will resell | | | | multiply these values by the total quantity |
| industry cost database information such as RS | | | | (by LB) required for the job. This would |
| Means or Craftsman. | | | | give you the total cost of the work for this |
| | | | item in your estimate. You would do this for |
| This is a good baseline for starting to use a | | | | every item in your estimate. Some people |
| construction estimating software solution, | | | | might say this is very time consuming, but |
| but all too often, construction professionals | | | | this is the most accurate way of estimating |
| will begin to find that the data is not | | | | the work. |
| accurate for their specific geographic | | | | |
| locations of work, their local distributors | | | | In addition, some construction professionals |
| have different prices than what are provided | | | | might say that the material and labor costs |
| in the software costbook database provided by | | | | are inaccurate. These prices were taken from |
| the vendor and costbook updates provide by | | | | a national industry costbook database, and in |
| the software vendor are not timely enough to | | | | fact, could very well be inaccurate. A good |
| reflect local price changes in materials | | | | software estimating program would allow you |
| (labor prices are usually pretty consistent | | | | the ability to change any information about |
| over time). | | | | this item required to match your own labor |
| | | | and material costs. One important |
| As a result, the construction professional is | | | | consideration for this is that you should |
| not satisfied with the software vendor's | | | | base your current estimates not only on an |
| estimating solution, the adoption of the | | | | updated costbook database, but also on the |
| software will diminish, and the construction | | | | results from historical estimating. This |
| professional will either begin to more and | | | | way, you can see if in fact you made any |
| more get frustrated while searching for | | | | profit from your last job and factor in this |
| another software solutions or revert back to | | | | experience in terms of changing the prices of |
| their original estimating process. Often | | | | items to reflect your profit margin. This is |
| this is either a basic spreadsheet or paper | | | | in addition to including standard profit and |
| and pencil. | | | | overhead costs in your jobs. |
| | | | |
| This creates an interesting buzz in the | | | | Some construction professionals will say that |
| marketplace and on construction forums where | | | | all of this cost database construction and |
| construction professionals will compare, | | | | pricing definition is very time consuming, |
| contrast or complain about various estimating | | | | but in reality, we have found that most GC's |
| software packages because they do not do the | | | | would require from 300-800 items in a |
| job they were expecting, are not reliable, | | | | customized costbook database. This would |
| and in many cases are down right | | | | take care of about 90-95% of the typical |
| inaccurate...enough so that the estimator no | | | | estimating requirements of the construction |
| longer has any faith in the results provided | | | | professional. This is a far cry from the |
| by the estimating software. At best, the | | | | 30,000-60,000 items which are typical of an |
| software is either used for "guesstimates" or | | | | industry costbook database....and much easier |
| becomes "shelfware". | | | | to update and manage. |
| | | | |
| The problem with this perspective is that the | | | | So the point of this article is to tell you |
| estimating software is perceived as "bad". | | | | that the first thing you should consider when |
| In reality, the software might be just fine | | | | looking for an estimating system is the |
| (operationally), but it is the cost | | | | ability to create your own costbook database, |
| information and cost data which is not | | | | and be able to leverage existing industry |
| correct for the particular construction | | | | costbook information to do that. In |
| professional. Also, in many cases, software | | | | addition, this should be an easy process and |
| vendors will "lock down" the cost data either | | | | be able to leverage all the capabilities of |
| because they make money off of the data or do | | | | the estimating software, such as reports or |
| not want the customer to change the | | | | other functions. This way, you will be able |
| information because they have specific | | | | to find an estimating software solution which |
| features and functions in the software which | | | | fits your business rather than trying to fit |
| are dependent upon the information contained | | | | your business into the methods and practices |
| in the cost data (such as estimating | | | | of the estimating system software! |
| assemblies or multi hierarchical costbook | | | | |