How can estimate cost be improved to be more accurate and reliable?

“And why should estimators follow some of my hints to improve the reliability of their estimate?”

#estimate, #costmanagement

Cost management is the discipline to assemble composite rates that accounts for labour, plant, and material. Simpler than this there is nothing. You need to be able to read a drawing, possess a scale rule, or invest some little money in a take-off software, capable to use any software like excel; and that’s it.

As you can see, presented as described above, estimation looks like an easy task, that anybody can do it. Online there are plenty of courses, training providers, and remote learning opportunities promoted and provided by the social networks that promise you to become an estimator in few weeks.

“But the reality is different, outside. Plenty of employment opportunities, freelancing, with good and serious earning potential for good estimate skills.”

Contractors, subcontractors, developers, architects, and engineers all require estimates to support their costs and decide if a project is viable or requires some adjustment. From the initial concept given at the briefing stage by the client, the designer starts to embed the requirement into the drawing concept. Draft some high-level specifications and prepare the first proposal. The client, if satisfied with the concept proposed, rises the oldest question: “how much is going to cost it?”. Do not get me wrong, designers are very good at doing their jobs, but as cost management skills, or as estimators, are not so proficient.


#estimate, #costmanagement
#estimate, #costmanagement

“So, how are we going to improve, make our estimate more reliable and accurate as estimators?”

There is no precise route to follow to improve our estimate, what I can recommend and suggest is to add some of the below suggestions to improve your estimate and make it more reliable and accurate:

·        Prepare a question log/query log to be sent out to the designer or to the contractor if there is something that you do not understand. The principle is simple if it is not clear do not assume, first rise the query, then if you do not receive any answer, or worst if the designer has no answer, make your assumption, and record it.

·        Read all the documents such as drawings, specifications, contract conditions, and preconstruction information. Engage with the planner and liaise with him/her to have a rough idea of the time and duration of activities.

·        Do not underestimate or exclude the risks, make adequate provisions to deal with those kinds of unforeseen circumstances. I can assure you that risks materialise more often than not during construction. Adequate provision and mitigation measures budgeted are always capable to deal with the situation and keep the project running within the planned schedule.

·        Basis of the estimate is the part of an estimate that nails the points where you have set the estimate, drawing used, base date, source of rates, any relevant communication. All those points from the baseline of the project, and this baseline will be the first cost available to measure the profitability of the project.

·        Assumptions and Exclusions, it is a tragedy when I check the tab or the part relevant to the project. Even the cheapest online course starts with the notorious statement “each project is unique and there are no same conditions even at 10 metres distance”, so why do estimators, in a lazy mood, just copy and paste from the past project the same list?. Be professional and clever, there is no room for errors, and I believe you should value your reputation worth more than a copy and paste.


#estimate, #costmanagement
#estimate, #costmanagement

I promised you some hints on “How can estimate cost be improved to be more accurate and reliable?”

And the list above is what I define as a good starting point. There is no “one size fit all” or “rule of thumb”, most estimator jobs especially when it comes to a concept or early-stage estimates, are based upon judgment, experience, and hard study. Cheap training can give you the value for what you pay, nothing more. I am not a proficient graphic designer, but I believe the infographic I produced could be a good starting guideline, for free, to improve your estimating skills and remember, do not be afraid to ask questions, better to have a straightforward answer than a misunderstanding that will for sure lead to an error and put cost pressure to the project.

What do you think, do you agree, is there anything you might want to add? Feel free to leave your view, suggestions and help all our colleagues to improve their estimation skills. I will look forward to reading from you,

Charlie

1 comment on “How can estimate cost be improved to be more accurate and reliable?
  1. Angus Jenkins says:

    interesting blog Carlo

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