A staggering 98% of all construction projects globally experience cost overruns of over 30%. Delayed openings, dissatisfied clients, and damaged reputations are just a few of the serious consequences, but better options are now available. Accurate construction estimates completed early on prevent surprises and disappointments as projects near completion, and the software tools that make this possible have already arrived.
A balanced combination of technology and common sense can prevent these five costly construction estimating mistakes:
The construction industry is quickly moving away from paper drawings and manual document control processes, but the fallout from this bygone era still lingers. A construction quantity takeoff is the process used to list and count the components and materials that make up a project, making it possible to calculate its total cost. The term “takeoff” refers to the way estimators take information from drawings, models, or blueprints. When drawings are incorrect or outdated, so are the estimates.
3D takeoff and estimating software is the most effective remedy for this age-old problem. This advanced technology allows estimators to pull precise quantities from 2D drawings or 3D models automatically. Building information modeling (BIM) platforms further eliminate errors and minimize risk by creating real-time links between estimates and design files, ensuring you always work with the latest version.
Manual estimating and takeoff processes were once the norm. When basic computer tools like Excel spreadsheets arrived on the scene 40 years ago, they made organizing data and completing basic calculations easier. While this was a big step forward, the process of transposing takeoff information from 2D CAD files introduced numerous opportunities for error, with just a single typo potentially leading to huge discrepancies in the final estimate.
Manual or spreadsheet-based takeoff processes also lack the revision control and collaboration features that make the purpose-built construction software tools of today so useful. Integrating material, quantity, cost, and design data in one platform makes it possible to automate the complex calculations inherent to large projects.
Materials are a huge cost driver for every construction project. Still, it is also important to pay attention to labor and equipment costs that are often prone to seasonality, fuel price fluctuations, and sudden spikes in demand. In addition to purchase or rental costs, construction equipment is also subject to:
Cost estimation software is useful for creating more accurate labor and equipment estimates and forecasts, with historical data, subcontractor databases, and benchmarking processes used to predict future costs based on relevant past experiences.
One of the most costly (and understandable) construction estimating mistakes is concluding the estimation process too early. Estimates are used throughout a project’s lifecycle, not just for initial planning and bidding processes. With late-stage changes becoming the norm, estimates must also become living documents that are regularly updated.
Version control and cloud-based coordination provide a remedy for this common situation, since late-stage changes that are integrated within a unified platform are difficult to miss, with cost and quantity information updated automatically. This allows busy construction teams to focus on the task at hand as projects near completion.
Murphy’s Law teaches us that “anything that can go wrong, will go wrong.” While this may not apply to every construction project, planning for the worst-case scenario and evaluating risks carefully are essential parts of the construction estimating process. Weather delays, procurement issues, labor shortages, and hundreds of other issues that can impact the project cost should be factored in, beginning with the earliest estimates.
Risk management practices lead to more realistic contingency budgets by evaluating the severity and likelihood of each risk factor so that appropriate funding can be set aside to cover unforeseen events. Artificial intelligence (AI) and machine learning are among the tools taking risk management practices in construction to a higher level.
Accurate estimates can spell the difference between success and failure for construction companies, contractors, and clients. Excel spreadsheets and manual data transfer processes have faithfully accompanied the industry into the digital age, but project complexity, stringent cost controls, and increased competition call for a more reliable toolkit. Digital estimating solutions improve speed and accuracy while leaving costly mistakes and overruns in the past.
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