Ten Tips for Using Estimating Software

Nov 1, 1999 12:00 PM, By Eric David, Accubid Systems

You've now got the estimating software your competitor used to beat you last year. It looks great. The problem is, how do you use it?

Assuming estimating software follows the same pattern as many other computer programs, you will probably take full advantage of only a small portion of the software's capability. However, a good software package can be a valuable tool for negotiating, making presentations, customizing an estimate, managing projects, and making future estimates. Consider these 10 points to maximize your estimating software.

Tip 1: Shed some light on the subject. One of the best investments you can make in any estimating software is to pick up a highlighter and skim the manual from cover to cover. It's also a good idea to index key pages. If this sounds like a daunting task, it's not.

The better developers have learned to organize their manuals and their help menus into modules. In most cases, picking up one or two tips a day will allow for efficient progress when working on the estimate. A well-indexed help feature that uses the nomenclature common to estimates is essential.

Understanding you can break down an estimate by drawing, area, phase, system, or location is important. This knowledge helps you do scheduling, and it gives you a better handle on project management.

Tip 2: Find a support group. Users benefit immensely from meeting with other users to share tips and techniques. With such sharing, efficiency goes up, and the learning curve drops off. You learn from others, in a context that matches what you do. >From all of these people, you'll find more than one way to do a given task. Testing other approaches deepens your understanding of the software; and the art of estimating.

The software developer's newsletter offers another valuable connection with system developments, especially if it features input from users. On the developer's Web site, you should find tips, tricks, and FAQs. Additionally, you can look to that site for downloadable patches, add-ins, scripts, macros, or other items the developer may wish to offer for free. Look for training schedules, recommended resources, lists of users, and trade show information. The Web site is a way for you to get some one-on-one advice, free of charge, directly from a company representative.

Tip 3: Laugh at "my way or the highway" syndrome. You should not have to change your estimating methods to fit a software package. It should help you sharpen your methods, not disregard them. If your software is too rigid in this regard, contact the developer; the company often has an upgrade in the works or will begin one based on your feedback. Or, it may show you how small changes in the way you do your job can help you do it better and make good use of the software.

Tip 4: Make company-specific assembly units and templates. Doing this to fit the type of work your company performs will help standardize estimates. No matter what type of work your company performs, allow for customizing specific assemblies; so you can expand into more profitable work as the need arises. The flexibility and ease of making new assembly units often encourages striking out into areas where competition is tame and profits are high (see sidebar, below).

Tip 5: Make "what if" scenarios a standard practice. Do this without compromising the original estimate. Last minute additions and deletions are normal; you must handle them efficiently. In negotiations, have detailed information available by way of a laptop. This allows the customer to make an informed decision now; instead of when it's too late.

Tip 6: Get graphic. People typically like visuals, so include charts and graphs. Print out portions of an estimate to suit a particular purpose. Produce graphs to aid with negotiations for a project. A "must graph" is a bid breakdown. You can generate other kinds of graphs, too. Ask customers what kinds of graphs they would like to see, then prepare them. Your competitors will probably ignore this step, so taking this initiative may gain you major points with your customers.

Tip 7: Subdivide and conquer. Project managers have milestones and billing cycles. If you divide your estimate so its parts fit into these other measuring tools, everyone will be on the same page. Milestones can be as large as one building in a multi-building project; or as specific as an individual system, like branch wiring for a foyer area.

You probably bill some projects monthly, based on the progress made during the period. In these cases, subdividing into milestones adds credibility to an estimate. Being able to verify the billing boosts the trust that allows you to bill the work as you do it.

Tip 8: Track labor independently. Break down labor by function. Yes, you have foremen, supervisors, journeymen, and apprentices at different rates. If tracking them individually is impractical, establish an average for the crew; a crew cost basis. Then, you can compare actual hours to estimated hours. A variance could indicate a problem. Tracking ability can help you keep the phase or project from slipping.

You can call other labor incidental: setup, travel, testing, commissioning, as-built drawings, delivery, site meetings, and scheduling meetings. While you may not want to track these on an ongoing basis, including them as part of the estimate is wise. You can get an idea of the time you need, and include a provision to recover those costs.

Tip 9: Review labor units. At the end of the project, you'll have information on the accuracy of your estimate. Take advantage of this and update your labor units. But, be aware: A problem that raised the labor costs may be non-repeating (e.g., a blizzard), or something unpredictable made the job go faster. Go through the job extension for high-labor items and review them.

Tip 10: Know your electrical items and assemblies. Become familiar with the kinds of conduit, wire, junction boxes, and fixtures available. The estimating program's database is your toolbox. Stock it well, and do so up-front; rather than trying to search in the middle of a bid. The software should allow you to add, delete, rename, and move items/assemblies to suit your needs.

Sidebar: Template-making guidelines

• Consider local area regulatory requirements and anomalies. For example, if you are working in an earthquake-prone zone, the jurisdictions will require seismic installation adherence. This means you must figure added supports and fastenings into the estimate.

• Customize assembly units to conform to installation specifications or material quality. This can change. For example, installing switchgear at a data center will incur costs you won't have when doing the same installation at a warehouse.

• If you have certain tooling and crew expertise, be aware of these and reflect them in the program's assemblies. For example, if you have a high-end conduit bender, you can use the labor savings as a competitive advantage when you develop your estimate.

• Geography affects mobilization costs: A standard template for "travel work" in the same locale can be a real timesaver. For example, if you do many jobs in Peoria, Il., you need a template for Peoria jobs.

Sidebar: Customization keys

Here are some areas you should think about when customizing your software.

• Update groups of items or assemblies. The program should allow you to update item or assembly parameters quickly, and adjust them to your levels of purchasing or to the company's verified labor factor.

• Look at the program's default job or templates: You can customize this in almost any estimating program. Saving new updates into the default job or templates means you can consistently apply your work methods to new projects.

• Don't overlook substituting items. For example, you can substitute aluminum conductors for copper conductors. This could allow you to reuse a project you already estimated, and make changes only where necessary, instead of starting from scratch.