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

When you first investigate computer basedconstruction professional to either adapt to the
estimating software, you will find that there aresoftware or simply decide not to use the
many software vendors selling solutions whichsoftware.
range from a few hundred dollars to manyThe best estimating software solutions should
thousands of dollars. In fact some estimatingallow the construction professional to completely
software packages can cost upwards of 15-20leverage existing industry database cost
thousand dollars and in some cases, as high asinformation as well as provide the ability for the
$100,000. That is quite a range of price.construction professional to create their own
Often, estimating software is selected based uponcostbook database of information and even
the cost, features, functions, reviews, word ofcombine the two. This should be extended to
mouth, or other avenues. In many cases, potentialhave the ability to create as many costbook
customers do not consider how they are doingdatabases as the construction professional would
their estimating processes today, what theylike to accommodate multiple types of estimating
would like to improve, how automation can, will, orsituations.
will not help them, and what an estimating systemA quick word on the estimating process. The
should do for their business.most accurate method of estimating is to use the
In many cases, the construction professional willUnit Cost Method of estimating. This means that
try and find a way to adapt their business to theeach material item in a costbook database would
way a software package operates, rather thenhave at least a material and labor cost. Even
determine the best way to adapt the softwarebetter if the item provides for the ability to track
to enhance their current way of doing business. Insubcontract and equipment costs and well as labor
many cases estimating software may not berates. These costs are then defined for the item
flexible enough to allow a construction professionalat the "unit of measure".
to "customize" the software to work inSo for example, you could be working on
conjunction with the best business practices ofreinforcing steel in a foundation and putting in 1/4"
the company.diameter, #2 rebar. This item is typically
An example of this is the cost information whichcategorized by the LB (foot pound) as the Unit of
is provided by many of the more advancedMeasure. There might be a material cost per LB
construction estimating software vendors in theof .78 and a labor charge of .76 to install the
market. Often, you will see software vendorsrebar for each 1 LB. The Unit Cost Method of
either providing their own cost data informationestimating would take the material and labor costs
(often on a monthly subscription basis), or theyand multiply these values by the total quantity (by
will resell industry cost database information suchLB) required for the job. This would give you the
as RS Means or Craftsman.total cost of the work for this item in your
This is a good baseline for starting to use aestimate. You would do this for every item in
construction estimating software solution, but allyour estimate. Some people might say this is
too often, construction professionals will begin tovery time consuming, but this is the most
find that the data is not accurate for their specificaccurate way of estimating the work.
geographic locations of work, their localIn addition, some construction professionals might
distributors have different prices than what aresay that the material and labor costs are
provided in the software costbook databaseinaccurate. These prices were taken from a
provided by the vendor and costbook updatesnational industry costbook database, and in fact,
provide by the software vendor are not timelycould very well be inaccurate. A good software
enough to reflect local price changes in materialsestimating program would allow you the ability to
(labor prices are usually pretty consistent overchange any information about this item required
time).to match your own labor and material costs. One
As a result, the construction professional is notimportant consideration for this is that you should
satisfied with the software vendor's estimatingbase your current estimates not only on an
solution, the adoption of the software will diminish,updated costbook database, but also on the
and the construction professional will either beginresults from historical estimating. This way, you
to more and more get frustrated while searchingcan see if in fact you made any profit from your
for another software solutions or revert back tolast job and factor in this experience in terms of
their original estimating process. Often this is eitherchanging the prices of items to reflect your profit
a basic spreadsheet or paper and pencil.margin. This is in addition to including standard
This creates an interesting buzz in theprofit and overhead costs in your jobs.
marketplace and on construction forums whereSome construction professionals will say that all of
construction professionals will compare, contrastthis cost database construction and pricing
or complain about various estimating softwaredefinition is very time consuming, but in reality, we
packages because they do not do the job theyhave found that most GC's would require from
were expecting, are not reliable, and in many300-800 items in a customized costbook
cases are down right inaccurate...enough so thatdatabase. This would take care of about 90-95%
the estimator no longer has any faith in theof the typical estimating requirements of the
results provided by the estimating software. Atconstruction professional. This is a far cry from
best, the software is either used forthe 30,000-60,000 items which are typical of an
"guesstimates" or becomes "shelfware".industry costbook database....and much easier to
The problem with this perspective is that theupdate and manage.
estimating software is perceived as "bad". InSo the point of this article is to tell you that the
reality, the software might be just finefirst thing you should consider when looking for an
(operationally), but it is the cost information andestimating system is the ability to create your
cost data which is not correct for the particularown costbook database, and be able to leverage
construction professional. Also, in many cases,existing industry costbook information to do that.
software vendors will "lock down" the cost dataIn addition, this should be an easy process and be
either because they make money off of the dataable to leverage all the capabilities of the
or do not want the customer to change theestimating software, such as reports or other
information because they have specific featuresfunctions. This way, you will be able to find an
and functions in the software which areestimating software solution which fits your
dependent upon the information contained in thebusiness rather than trying to fit your business
cost data (such as estimating assemblies or multiinto the methods and practices of the estimating
hierarchical costbook databases). This creates asystem software!
very inflexible solution which requires the