Pride Electric, a Denver-based family owned and operated electrical contractor, only needs one full-time estimator.
Owner Sam Harrison said for the past 16 years, Pride Electric has used the same computerized estimating program to save both time and money.
“I would need to triple or quadruple my estimating staff if I didn't have a computerized package,” Harrison said. “I would need probably four full time estimators, which is 160 hours a week, and I have one.”
Pride Electric, which was founded in 1972, works on electrical and telecommunications projects in Colorado and 18 other states for clients such as grocery stories, telecommunications facilities and industrial processing plants. Harrison said the estimating software is a tremendous help to electrical contractors.
“You can do an estimate better, faster, more efficiently and with less opportunity for mathematical error with a software package,” Harrison said. “Where you used to have to extend horizontally and then vertically, that's all done by the computer spreadsheets. It's a great timesaver.”
Pride Electric uses a software program called BHS, which is flexible and easy to use, Harrison said.
“In this industry, we have roughly 500,000 parts,” Harrison said. “If I told you to give me the database number for ½ inch conduit, you couldn't find it. The system we use basically is designed to function the way we think. I don't need to know database numbers.”
Instead, all the parts are logically grouped so they are easy to find, he said.
“If you're putting in pipe, you're going to need wire,” Harrison said. “It strings through the parts and pieces that we normally use so we can enter them very rapidly.”
Larry Mullins, vice president of education and industry relations for IEC, said about 75% of its 3,600-member companies use computerized estimating programs.
“Estimating software programs have really revolutionized the way our contractors are doing business,” Mullins said. “The best thing about it is it is helping them reduce their costs and increase their profitability. It's really allowing them to do more business, provide better service to their members, and in essence, grow in the industry by hiring more people.”
The programs have given contractors a minimum time savings of 45% to 55%, Mullins said.
“They now have all this information just right at their fingertips,” Mullins said. “It's absolutely incredible.”
Estimating programs help contractors come up with a starting point for a project, said Larry Fletcher, executive vice president of Denver-based GoControls, which recently became SupplyWave.
“Most contractors use their estimating systems to quickly and efficiently establish a baseline price for a project,” Fletcher said. “It may not be exactly the material takeoff or the hour takeoff, but it's a good estimation of the cost of the job.”
The construction industry had to spend a week to create a bid before the launch of computerized estimating programs, said Fletcher of GoControls.
“Before you had these bid packages, you'd sit down and say ‘this house or building is 10,000 square feet and the going rate is 100 bucks a square foot. I'll do it for that,’” Fletcher said. “You really didn't have a feel for it. This starts to push these guys into managing their jobs and starts to train the mindset for job cost accounting.”
Fletcher, who served as an estimator and project manager for an environmental cleanup company, said he and his team had to turn out 200-page bids without the help of computerized estimating.
“When I was an estimator back in the early 80s, I would have killed for some of these programs,” Fletcher said. “I bid some big cleanup jobs in the $15 to $20 million range for the federal government and had as many as 30 different subcontractors. Keeping all that information straight in the days of the fax machine was brutal.”
Some contractors are still doing estimating the old-fashioned way, he said. For example, Fletcher said he recently met with a $400 million New York contractor who still does all their estimating by hand.
“I was absolutely flabbergasted,” Fletcher said. “I was sitting there with a gentleman who has been in the electrical contracting industry for 35 years and he almost couldn't talk. He said, ‘you do what?’”
The fear factor deters some contractors from relying on computerized estimating programs, he said.
“These guys in New York said, ‘We do $400 million a year and we've never needed an estimating package before. Why should we use one now?’” Fletcher said. “This is an old school business. It's like trying to teach your grandfather to use the Internet. It's exactly the same mindset and mentality.”
Crude estimating programs first appeared on the market in the mid 1980s.
“When estimating packages first came out, everyone was skeptical,” Fletcher said. “Once they started using them, they found the value of the system. It helps them track the information and gives them a way to store it and have it easily retrievable electronically.”
Like Palm Pilots or the Internet, computerized estimating programs became a critical part of an electrical contractors' business tools. Fletcher said a majority of the contractors who have been involved in GoControls' beta testing and focus groups have used the programs.
“Most of them have used some estimating package to some degree — whether it was home-grown, a series of Excel spreadsheets or one over the shelf like Accubid or McCormick,” Fletcher said.
Several software companies have offered software solutions for electrical contractors looking for ways to efficiently create bids, manage projects and deal with change orders. To keep contractors up to date on all the new programs and methods, IEC provides management technology forums at all of their national meetings to train their contractors about estimating.
“We bring some of our industry partners, our computer software companies who are in that venue, to our national meeting,” Mullins said. “Then we'll take a whole afternoon and do training with our contractors about the latest available software, computer programs, how we can cut their time, reduce mistakes and basically improve their profitability.”
Companies such as SmartContractor, ConEst, Accubid and Estimation Inc. provide training on the tips and trends in the world of estimating software. The seminars always generate a lot of interest, Mullins said.
“They're absolutely packed,” Mullins said. “That's why we had to move to bigger rooms. We also don't run anything against those sessions of education because the contractors are so interested in it.”
Pride Electric's Harrison, who is on the board of directors for the Rocky Mountain IEC chapter and the chairman of low voltage apprenticeship and training for the national chapter, said the software seminars provide a tremendous help to contractors who want to stay on top of technology.
“Even if they do not use that particular brand, they can learn about the way people think and operate and what other contractors are doing,” Harrison said.
Computerized estimating programs have helped contractors effectively and efficiently run their businesses, Fletcher said.
“They can crank out a bid really quickly and accurately,” Fletcher said. “In the past, when you'd kick out your bid, you used to have to sit there and essentially recreate it when you started the job. Now you don't have to do that. So the efficiency that it provides you is excellent.”
SOFTWARE SOLUTIONS FOR MANAGING CHANGE ORDERS
Change orders can either be a pain in the contractor's side or a dollar in their pocket.
Computerized estimating programs can help contractors develop a bid, but they can also come in handy in the later stages of a project, when contractors have to deal with change orders. Rather than completely redesigning a bill of materials, contractors can use computerized programs to speed up and improve the change order process.
“If I had 100 feet of pipe and wire to feed this piece of equipment, and all of a sudden, the piece of equipment got bigger and further away, I can pull that one line out, put in the new pipe and wire and leave everything else the same and it's done,” Harrison said. “It generates a new bill of materials and changes everything for me instantaneously.”
Sam Harrison, owner of Pride Electric, said he learned how to effectively sell a change order at an Accubid seminar at the IEC national meeting.
“If people aren't trained in knowing the true cost of a change order, the owner will get something that he is still upset with and everyone will suffer,” Harrison said.
Instead of getting frustrated, contractors can actually boost business by knowing how to effectively handle a change order, Harrison said.
“We went from having 50% to 70% of our change orders argued, beaten up and called all sorts of names to a 99.3% approval rate when we started using Accubid and trained our foremen, supervisors and estimators on how to sell a change order,” Harrison said. “Computerized estimating packages add credibility to the change order process.”