estimates and sending estimate information directly <strong>to</strong> a program for procurement or integrating with your company’s accounting system. • Online collaboration. Comments, adjustments, and approvals can be done digitally, avoiding paper chases <strong>to</strong> find out which physical project file is still sitting in whose in-tray. Proper integration of construction management software can therefore speed up business as a whole, as well as the cost estimating activity itself. The Not-So-Smart Side of Applications for Cost Estimating Cost estimating software may be necessary in order <strong>to</strong> be responsive <strong>to</strong> cus<strong>to</strong>mer requirements, but it is not sufficient on its own. In other words, it would be a mistake <strong>to</strong> just rely on software without any additional checks and balances. The quality of the results you obtain from estimating software depends on the quality of the information you put in<strong>to</strong> it. Consider the cost data that it uses. Few if any commercially available cost databases use continually checked data, refreshed every year, item by item, locality by locality, because the effort required is enormous. The real costs you see for building materials or activities in your own projects may differ, and it is important <strong>to</strong> use this real data in your estimating process instead of dated information. Similarly, do not confuse purpose-built cost-estimating applications with spreadsheet applications. The latter do not offer “hard coded” formulas for meaningful calculation. The flexibility of spreadsheets is also their weakness: people can change the way a spreadsheet performs its calculations, destroying the relevance of the results and leading <strong>to</strong> errors. By comparison, construction estimating software, when given the right data <strong>to</strong> work with, can reliably calculate costs and related information by category (materials, labor, plant, time), and rapidly produce both summary and detailed cost estimates. The Added Value of the Human Cost Estima<strong>to</strong>r Capable cost estima<strong>to</strong>rs can make intelligent use of software. They can leverage the power and speed of the cost-estimating application, at the same time applying their knowhow <strong>to</strong> confirm or improve the results. Characteristics of good cost estima<strong>to</strong>rs include: 8 | <strong>Building</strong> <strong>Entrepreneur</strong> • Understanding of architectural and engineering drawings. • Knowledge of construction materials and methods. • Acquaintance with cus<strong>to</strong>ms or preferences about how their own company executes its construction projects. • A systematic and organized approach. • Know how in preparing estimates that are accurate and clear for management and cus<strong>to</strong>mers. • Competence in evaluating bids from subcontrac<strong>to</strong>rs, not only on price, but also on scope and responsiveness with an eye on past performance as well. • Engineering skills <strong>to</strong> structure the estimate in a way that assists cost optimization, possibly with different construction methods and materials. • Sound judgment and ethics <strong>to</strong> ensure that cost estimating serves the business and cus<strong>to</strong>mers properly and treats subcontrac<strong>to</strong>rs fairly (no “bid shopping” as a prime contrac<strong>to</strong>r or “bid peddling” as a subcontrac<strong>to</strong>r.) • The continuing acquisition of experience and information <strong>to</strong> improve results further. This can include finding out why estimates for a project were accepted or rejected, how many contrac<strong>to</strong>rs provided estimates for the project in question, and if the lowest bidder made any omissions in the estimate it provided. When a computer does the manual and repetitive work, a greater part of a cost estima<strong>to</strong>r’s time can be spent on improving the process by improving the presentation of estimates. Applications may offer different reporting options from which <strong>to</strong> select cost breakdowns and proposals, including charts and graphics <strong>to</strong> enhance clarity. The experience and judgment of the cost estima<strong>to</strong>r are still necessary <strong>to</strong> decide matters such as units of measurement for estimating. A cost estima<strong>to</strong>r can shape the presentation of the costs by using units favored or recognized by the cus<strong>to</strong>mer, or that yield quantities that are neither <strong>to</strong>o big, nor <strong>to</strong>o small. Potential Pitfalls for People Doing Cost Estimating Conversely, cost estima<strong>to</strong>rs should avoid the following estimating errors: • Failing <strong>to</strong> read relevant project documents. • Skipping the site visit. Another necessary reality check for the relevance of construction elements, measurements, and unit costs <strong>to</strong> be used. • Mistakes and omissions. A cost estimating software application is like a car. If a part is missing, expect a malfunction, and if you drive it without care, expect an accident. • Arbitrary cost adjustments. The final cost estimate from the application might not be the one you expected or that your cus<strong>to</strong>mer wanted, but it might still be the right one. While applications often offer the possibility <strong>to</strong> adjust pricing manually, sound business justification is always a prerequisite. • Failure <strong>to</strong> check the final result. Figures from an application must always be checked for meaningfulness, possibly by comparing them with previous similar projects. Applications and computers are still “garbage in, garbage out” systems. If you feed them bad data or omit chunks of a project, you will get bad or incomplete results. Check, check, and check again. Are Programs or People Better for Construction Cost Estimating? From the lists above, it becomes clear that human beings and software applications are highly complementary when it comes <strong>to</strong> construction cost estimating. Most of the characteristics of a good cost estima<strong>to</strong>r (as in a person) are not available in software, although artificial intelligence may lead <strong>to</strong> new software capabilities in the future. On the other hand, computers achieve levels of speed and reliability in resource calculations that are far beyond those of human beings. Finally, the Ultimate Guide <strong>to</strong> Construction Cost Estimating is… …you, as a competent, knowledgeable, conscientious cost estima<strong>to</strong>r, supported by a suitable construction estimating software application. This person-technology combination is a key part of preserving and improving the profitability of a construction company, in ways that neither a person nor a computer can do alone. Moreover, the added value generated by this combination (detail, relevance, clarity of presentation) can make a favorable impression on the cus<strong>to</strong>mer when it is most needed, meaning at the outset, and justify payment for the estimating work alone. Originally appeared on Capterra, www.capterra.com, Article written by Rachel Burger
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