Construction Cost Estimating Software Trends

Though the economy is finally showing signs of life, the construction industry is still fragile, the result of lingering recessionary pressure and still-tight credit markets.

So construction business owners often find themselves locked in fierce combat with many different rivals, big and small, for the few available jobs.

The intensity of competition coupled with a rise in the cost of materials results in slim margins and leaves little room for error when it comes to estimating. That’s why many contractors looking for a competitive edge are turning to construction cost estimating software programs.

To be sure, there’s a learning curve involved in using any new software. And when it comes to using construction cost estimating software programs, builders must still build and customize their own databases (though many programs make the process easier with industry specific, pre-built databases that can be fine-tuned and customized). Contractors who move to construction-specific estimating programs have claimed as much as a 50 percent increase in productivity. The latest technology trends promise to further improve efficiency.

Construction Takeoff Software

Digitizing technology is well known and widely used in the construction industry. But the need for paper blueprints or a digitizing board has been significantly reduced recently with the rapid adoption of onscreen (electronic plan) takeoff capabilities. With this technology, contractors can transfer quantities and dimensions directly from 2-D electronic drawings for immediate use in their estimates. Contractors find the speed and visual aspect of onscreen takeoff more efficient than working with cumbersome paper plans.

Building Information Modeling Software

Some of the more sophisticated estimating programs also support an emerging technology, building information modeling (BIM), which shows the physical and functional characteristics of a facility so that everyone involved, from the designer to the contractor to the owner, can access and collaborate on it. Because of its efficiency and interoperability, BIM is becoming increasingly popular in today’s competitive environment: In a 2009 McGraw-Hill construction industry survey, 49 percent of respondents were using BIM tools, a 75 percent increase over BIM adoption rates measured in 2007.

Estimating systems that support BIM link to computer-aided drafting and design programs like Autodesk to take off quantities of items needed to build the design and calculate their cost, down to the last detail. If anything is altered during the design and construction process-for instance, more windows are added, or the flooring material is changed-the program instantly updates the cost calculations. This technology provides new advantages to contractors. Cost estimates can be justified through design visualization and assumption validation. And the ability to show owners, in real time, the cost and constructability impact of design changes allows contractors to provide greater value to clients.

Integrating Construction Cost Estimating Software with Other Contractor Software

Overall, technology advances are improving the integration between estimating programs and other software used in the construction process. In the past, integration may still have required several steps to move data from one application to another. Today it is moving to more of a one-step process or in some cases, entirely behind the scenes. Some estimating programs, for example, link to scheduling applications such as Oracle Primavera and Microsoft Project-providing labor and equipment details, material items, productivity factors and other estimate information for faster set-up of the schedule. Afterwards if a change is made to the estimate, it automatically feeds into the schedule. Conversely, changes to the schedule will feed back into the estimate.

Construction estimating systems can also share details with other construction-specific applications that support the buyout, purchase order generation and job cost tracking processes. So data only needs to be entered once.

Sharing Data with Contractor Estimating Software

Because contractors can pull data directly from the estimating program and use it throughout the entire design and construction process, it becomes much easier to schedule subcontractors and have the proper materials on hand when they are needed. Architects, builders, suppliers and others involved in the project can work together to ensure that plans are both well-designed and cost-effective, and can modify plans as needed so they can be built within budget.

Contractors can also make sure that plans comply with building codes and other regulations, which reduces the liability exposure of everyone involved in the project. Such capabilities are becoming increasingly important in an age when buildings are becoming both greener and more complex-particularly because of LEED requirements-and when the pool of experienced professionals who might be able to work around problems and deficiencies in planning is getting smaller due to retirements and the recession.

Comparing Past and Present Reports with Construction Cost Estimating Software

It’s important for a contractor to be able to compare bids for current projects with similar ones that were done in the past. Some construction-specific estimating software have built-in reports or report creation tools that allow builders to compare estimates, or even portions of estimates, with past jobs, and let them look at the estimates from different angles, such as status and type of work.

Many estimating software programs also allow builders to log multiple bids from subcontractors and suppliers as they change over time. The software keeps a record of these changes and any variables used in making the analysis. Consequently, contractors can price out different scenarios should the scope of the project change, while still retaining the details of the original estimate.

Gaining a Competitive Edge with Construction Estimating Software

As more construction business owners adopt construction estimating software, it’s likely that their customers will come to expect it. Moreover, as architects and others who traditionally are upstream in the building process rely on it, it will be difficult for builders who continue to rely on spreadsheet-only or even manual estimating methods to compete. Construction-specific estimating software can deliver a competitive edge to the contractor by adding knowledge and certainty to the project as well as management control to the estimating process. The result-more buildings will be built more efficiently and profitably.

Construction Business Owner, June 2010