While traditional methods of construction estimating have relied upon spreadsheets and manual methods of preparing contracts, commercial estimating software has grown in popularity in recent years. From the convenience it delivers to the time saved, professionals throughout the industry have recognized the invaluable services it offers when preparing estimates for their clients. In this article, we’ll review the advantages of this useful industry tool, as well as the benefits it delivers throughout the scope of your project.
Construction cost estimating software is a type of computer software exclusively designed for contractors to estimate construction costs for a specific project. Generally, a cost estimator will use estimating software to estimate their bid price for a project, which will ultimately become part of a resulting construction contract. In some instances, architects, construction managers, engineers and other professionals within the industry may also utilize cost estimating software programs to prepare cost estimates for reasons other than bidding.
Although construction estimation software may not be the first thing to be considered when it is time to estimate projected costs for upcoming projects, many professionals still use more traditional estimate methods, such as spreadsheets or manual documentation. However, building software continues to grow in popularity for many reasons: it is not only reliable and affordable but has also become more accessible in the past decades due to the boom in technological advancements in computers and mobile devices. One of the most significant pros construction estimating software offers is the time it saves, as well as the decreased margin of error it provides.
Because of the convenience, versatility, and accuracy it delivers, construction estimating software is used in many different sectors of the construction industry. Different versions address specialized applications in commercial, industrial and residential development, as well as general contracting, specialty contracting and highway or heavy contracting. Common capabilities across the various fields include takeoff software, RSMeans building construction cost data and estimating worksheets. According to Wikipedia, a fast CPU and sufficient RAM are both necessary for optimal functionality due to the vast number of calculations that estimating applications perform.
As indicated in the Construction Financial Management Association's 2008 Information Technology Survey, the larger a construction company, the apter it is to use construction estimating software. Also, companies in specialty construction fields have been reported to utilize construction estimating software most frequently.
Understanding how estimating software has evolved can add some insight as to how this innovative program can assist your business endeavors. As we have discussed, construction estimating software is a collection of programs, processes, and information used to calculate a construction project’s total expenditures. Estimating software automates formulations formerly obtained through manual spreadsheets and calculators. In addition, legacy tools such as tape measures can be replaced by digital cameras and tablet PCs. The introduction of both tools streamlines the estimating process by increasing the speed and accuracy in which an estimate can be made. As a result, estimating improves a contractor’s ability to compete with other bids while accurately representing the actual cost of a project to potential clients, which not only enhances productivity but eases the bidding process.
While spreadsheets are relatively simple to master and provide a means to create and report a construction cost estimate and/or cost models, their benefit is derived primarily from their ability to partially relieve estimators of mundane calculations. Accuracy, however, is not necessarily improved and productivity is not maximized. For example, data entry remains tedious and prone to error, formula errors are common, and collaboration and information sharing are limited.
According to research, many construction cost estimators continue to rely on manual methods, hard copy documents, and/or electronic spreadsheets such as Microsoft Excel. However, with the advent of computers in business, estimators began using spreadsheet applications like VisiCalc, Lotus 1-2-3, and Microsoft Excel to replicate the traditional tabular format, while automating redundant mathematical formulas.
As cost estimators came to depend heavily on spreadsheets (and the formulas within the spreadsheets became more complicated), spreadsheet errors became more common. These were typically formula errors and cell-reference errors which would often lead to cost overruns. As a result, commercial cost estimating software applications were created to overcome these errors by using hard-coded formulas and data structures. Other benefits include the use of reference databases for costs and other figures, predictable and professional-looking reports, accuracy, speed, and overall process standardization.
Because cost estimating programs have increased in popularity over the years, more advanced features (such as saving data for reuse and trade-specific calculations) have evolved and become more readily available to users. For example, there are now programs available that are designed specifically for professionals working within the building construction industry, which include libraries and program features for traditional builders. There are also programs that have been engineered for civil construction usage, including libraries and program features for roadway, utility, and bridge builders. Due to the variety of customized software available, contractors, architects, engineers, and owners are moving to advanced-cost estimating and management systems versus traditional estimating methods. Statistics show that the level of collaboration, transparency, and information re-use enabled by cost estimating and efficient project delivery software drives 15-25%+ reductions in procurement cycles, resulting in a six to ten times faster estimating process, reducing overall project times, and the virtual elimination of contract-related legal disputes.
As we have covered, estimation software is convenient, easy to use and estimates the projected construction costs with minimal instances of error. In this section, we’ll review some frequently-asked questions concerning this innovative industry software:
Q: What are some of the functions and features I can expect in a construction estimating software program?
A: Traditionally, cost estimators used sheets of paper to create estimates and prepare for a bid, and later spreadsheets served the same purpose. However, with the specialized features designed in modern construction estimating software, industry professionals can perform a variety of customizable estimating functions, including but not limited to:
In summary, estimation software not only estimates the costs of the software but also assists project managers by easing and fulfilling tasks that are usually left for accountants (who, incidentally, incur another expense). Additionally, there are some systems available that have a built-in order system allowing for click-through ordering of necessary materials.
Q: What are some of the advantages of construction estimating software?
A: As anyone in the industry who is familiar with construction estimating software, one of the most significant advantages it offers is the time it saves – and time is money. Although nearly everything this program does can be accomplished the old-fashioned way (i.e., paper or spreadsheets), it is much more efficient in many ways. Since there are often numerous professionals working collaborating on any given construction project, there is always a higher chance for a margin of error. What’s more, a software program offers the flexibility of being available anytime, anywhere, since it’s accessible via your computer. Having the ability to edit or make changes to your data can prove to be an invaluable convenience, particularly for projects that demand stringent deadlines or if multiple team members are working remotely on a project, which has become increasingly more common in the workforce.
Q: Who needs construction estimating software?
A: Although estimation software is also known as construction cost software, it can be useful to many different professionals throughout the industry. Therefore, it’s not only useful to architects and engineers but general contractors, since the efficiency of the project is mainly dependent upon the costs incurred. In fact, many of these programs are explicitly targeted to contractors who, with the assistance of such software, can easily determine the projected expenditures and make quick cost-based adjustments depending on the specs provided.
In today’s tremendously competitive construction market, estimating applications offer a host of benefits, expediting the process and making it much easier to produce cost estimates. Additionally, they also provide more accuracy than human estimators working on their own, as long as up-to-date cost data is applied. As a result, estimation software has become a must-have for anyone generating complex construction cost estimates.
While free cost-estimating software is available, it typically offers limited functionality and is not suitable for anything but smaller projects. For-purchase software, which can be costly, is a much better option for professionals faced with complex, large-scale projects because of the functionality and features it can offer. Here are a few of the benefits of for-purchase software:
Cost-Related Inputs and Processes:
Since design, building methods and materials are continually changing, construction estimating has also had to evolve to keep up with the industry trends and demands. Here are a few current trends that impact cost estimating:
Building Information Modeling (BIM): A building information modeling is a digital model of a structure, including all of its characteristics and dimensions. From the design to the construction, commissioning, and maintenance of a building, all participants can refer to this model. As a result, there is an increasing demand for cost estimating to become an aspect of BIM, although this opinion has not been without challenges. The main criticism of cost estimating in BIM is that cost estimators, with some justification, have less confidence in the level of detail of BIM designs. That lack of specificity can lead to substantial inefficiencies and reworking of estimates.
Sustainability and LEED Certification: Currently something of a hot topic in construction, LEED Certification is a point system for rating buildings based on their environmental performance. The role of an estimator in projects seeking to obtain LEED certification involves both calculating the cost of scoring LEED points and communicating these to clients. These include not just direct costs (using environmentally-friendly materials, for example), but also increased administrative costs for ensuring compliance with the LEED standards. Therefore, estimators in LEED projects should be involved during the construction design phase so that they can contribute information about costs associated with specific LEED points.
Lean Construction and Cost Control: Lean construction, a reasonably recent approach, draws upon the principles of lean management, which is the systematic effort to reduce waste without affecting productivity. Studies indicate that applying lean principles in construction projects may result in significant cost savings. As a result, an understanding of lean principles is a good asset for cost engineers who apply principles of value engineering to construction projects.