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There are as many resources on estimating project costs as there are on formulating estimates, quotes, bids and proposals. So many books, manuals, and articles have been published on this topic, and so many tools and software are now available for people to buy and download to address this issue. The goal of construction cost estimation is to lead to satisfied clients and business profits. Poor project estimates cause projects to lose money (when estimates are too low) or to lose customers (when estimates are too high). Suggesting or giving solutions regarding project cost estimation, therefore, has become an opportunity in聽itself.

However, there is no ultimate guide to efficiently estimating construction costs for a project. But there are three vital things to consider wherein project estimation is highly dependent on:

• Efficient and accurate tools and processes.
• The construction project where the estimate is going to be inferred from.
• Your personal experience and judgment in cost estimating.

It is a given that cost estimating standards and best practices do offer benefits, and an individual project can reuse a favourable cost estimate scheme, but the experience is always different in every situation. The most useful advice on project cost estimation is always specific to a project and always tailored to a particular business.

Cost estimating essentials

Construction project cost estimates are always about these three particular factors:

• Money. Cost is usually calculated, then a markup is applied, and the total is presented to the customer.
• Accuracy. A good estimate is always the one that鈥檚 accurately estimated where a construction company can make a fair profit without surprises between a pre-construction estimate and the actual amount to be paid.
• Speed. Customers always want to get their estimates as soon as possible. For commercial and industrial projects, customers would likely compare estimates before committing but for private and small projects customers may grab the first estimate they get if it鈥檚 reasonable enough.

To adequately meet all criteria, a pack of estimators may be needed, or a useful tool such as an estimating software may be used.

Cost estimating software

It is not a secret that the use of computers and software had increased productivity and sped up processes and this has been pretty evident in the construction sector the past decade with the disruption of the construction industry. In fact, in project cost estimation, over 55% of estimators fall short at achieving their cost estimating goals by failing to utilise the proper tools. For construction cost estimation, the best software solutions do not have to be complicated or expensive; they just have to have these essential features:

• Takeoff Tool to assist in capturing measurement whether from paper or digital plans.
• Integrated Cost Databases to corroborate personal or company data against commercially available data to make cost estimations.
• Calculations for Estimates in generated worksheets to arrange and organise estimates according to the required levels of details (the digital counterpart of squaring out and abstracting in manual cost estimation).

These three functions of a software speed up a huge part of an estimator鈥檚 job. Additionally, a project cost estimator may:

• Integrate with other construction software or applications. For example, a cost estimator program may capture data from a CAD file to make estimates and may also be incorporated to send said data to a different program for procurement automatically.
• Be available online for collaboration and adjustments and approvals can be done digitally in real time. This process would bypass the traditional physical process of filing that could take days.

Cost estimating, if integrated properly, contributes to the general construction management and would further speed up processes along a building management software.

The human added value to applications

A cost estimating software is not the 鈥渂e all鈥� of cost estimating. Relying on software alone without any checks and balances could present potential mistakes. The quality of the output of an estimating software is only as good as the quality of information input you provide.

An actual human being capable of understanding cost estimating can use a cost estimating software intelligently. With their skills and knowledge, they can give an added value to the speed of a cost estimating application. Here are what makes a good cost estimator:

• A thorough understanding of architectural and engineering plans and drafts.
• A working knowledge of construction materials and methods.
• Familiar with preferences on how a company executes its building projects.
• Systematic and organised solutions.
• Capable of preparing accurate and clear estimates.
• Competent in evaluating bids.
• Ability to structure estimates that would support cost optimisation.
• Sound judgment to ensure that estimates serve the business, customers and subcontractors correctly.

Cost estimating software is very valuable in performing manual and repetitive work, but the experience and judgment of an actual human estimator are still critical in matters of decision-making. It is not a question whether a cost estimating program is better than a human estimator or the other way around. People and software are complementary in this case.

Estimating errors to avoid

There may be no ultimate guide to project cost estimating but there are a few things to avoid.

• Always read relevant project documents.
• Never skip site visits. Always have an actual check of the construction elements, measurements and unit costs to be used.
• Always check for mistakes and omissions.
• Be flexible with cost adjustments. The final cost estimate may not always be the price you were expecting but may still be the correct one.
• Always check the final result. Figures from the software must always be compared to the final numbers.

The key to construction cost estimating

The ultimate key to project cost estimating is the human estimator supported by an applicable construction estimating software. This human-technology 鈥渦nion鈥� is vital in cost optimisation and improving profitability that neither a person nor a computer can do by itself.

For additional advice on project cost estimating, here are five ways to make sure your project will finish on time and within budget, four tactics that will help you do better work estimation, and additional effective cost estimating strategies in construction project management. Get the free ebook to add overall productivity improvements to your repertoire.聽