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How to Select the Best Construction Estimating Software Solution for your Construction Business

When you first investigate computer baseddatabases). This creates a very inflexible
estimating software, you will find that theresolution which requires the construction
are many software vendors selling solutionsprofessional to either adapt to the software
which range from a few hundred dollars toor  simply  decide  not  to use the software.
many thousands of dollars. In fact some
estimating software packages can cost upwardsThe 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 rangecompletely leverage existing industry
of  price.database cost information as well as provide
the ability for the construction professional
Often, estimating software is selected basedto 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 manyshould be extended to have the ability to
cases, potential customers do not considercreate as many costbook databases as the
how they are doing their estimating processesconstruction professional would like to
today, what they would like to improve, howaccommodate 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 professionalthe Unit Cost Method of estimating. This
will try and find a way to adapt theirmeans that each material item in a costbook
business to the way a software packagedatabase would have at least a material and
operates, rather then determine the best waylabor cost. Even better if the item provides
to adapt the software to enhance theirfor the ability to track subcontract and
current way of doing business. In manyequipment costs and well as labor rates.
cases estimating software may not be flexibleThese costs are then defined for the item at
enough to allow a construction professionalthe  "unit  of  measure".
to "customize" the software to work in
conjunction with the best business practicesSo 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 informationtypically categorized by the LB (foot pound)
which is provided by many of the moreas the Unit of Measure. There might be a
advanced construction estimating softwarematerial cost per LB of .78 and a labor
vendors in the market. Often, you will seecharge of .76 to install the rebar for each 1
software vendors either providing their ownLB. The Unit Cost Method of estimating would
cost data information (often on a monthlytake the material and labor costs and
subscription basis), or they will resellmultiply 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 aevery item in your estimate. Some people
construction estimating software solution,might say this is very time consuming, but
but all too often, construction professionalsthis is the most accurate way of estimating
will begin to find that the data is notthe  work.
accurate for their specific geographic
locations of work, their local distributorsIn addition, some construction professionals
have different prices than what are providedmight say that the material and labor costs
in the software costbook database provided byare inaccurate. These prices were taken from
the vendor and costbook updates provide bya national industry costbook database, and in
the software vendor are not timely enough tofact, could very well be inaccurate. A good
reflect local price changes in materialssoftware estimating program would allow you
(labor prices are usually pretty consistentthe 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 isconsideration for this is that you should
not satisfied with the software vendor'sbase your current estimates not only on an
estimating solution, the adoption of theupdated costbook database, but also on the
software will diminish, and the constructionresults from historical estimating. This
professional will either begin to more andway, you can see if in fact you made any
more get frustrated while searching forprofit from your last job and factor in this
another software solutions or revert back toexperience in terms of changing the prices of
their original estimating process. Oftenitems to reflect your profit margin. This is
this is either a basic spreadsheet or paperin addition to including standard profit and
and  pencil.overhead  costs  in  your  jobs.
This creates an interesting buzz in theSome construction professionals will say that
marketplace and on construction forums whereall of this cost database construction and
construction professionals will compare,pricing definition is very time consuming,
contrast or complain about various estimatingbut in reality, we have found that most GC's
software packages because they do not do thewould 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 righttake care of about 90-95% of the typical
inaccurate...enough so that the estimator noestimating requirements of the construction
longer has any faith in the results providedprofessional. This is a far cry from the
by the estimating software. At best, the30,000-60,000 items which are typical of an
software is either used for "guesstimates" orindustry costbook database....and much easier
becomes  "shelfware".to  update  and  manage.
The problem with this perspective is that theSo 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 finelooking for an estimating system is the
(operationally), but it is the costability to create your own costbook database,
information and cost data which is notand be able to leverage existing industry
correct for the particular constructioncostbook information to do that. In
professional. Also, in many cases, softwareaddition, this should be an easy process and
vendors will "lock down" the cost data eitherbe able to leverage all the capabilities of
because they make money off of the data or dothe estimating software, such as reports or
not want the customer to change theother functions. This way, you will be able
information because they have specificto find an estimating software solution which
features and functions in the software whichfits your business rather than trying to fit
are dependent upon the information containedyour business into the methods and practices
in the cost data (such as estimatingof the estimating system software!
assemblies or multi hierarchical costbook



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