In this review of electrical estimating software we will cover the potential Advantages, Free verses Paid For versions, What to look out for, and Is a recession is the right time to procure a system.
For myself, I have been involved with electrical estimating software since 1983 and been through two major recessions with these systems.
The over-riding question you should ask is “Will this type of system help my business and is it affordable?”. To answer this we should consider the following key points.
- Time efficiency savings.
- The importance of accurate costings to your business.
- The value of professional presentation of tenders.
- Other associated benefits of value.
- Affordability and future income potential of the investment.
- The wisdom of investing in electrical estimating software in a recession.
If you can price your work on the back of a cigarette packet, then this type of software is probably not going to help you. Similarly, if you work on pre-agreed set rates then it is unlikely to be of great benefit to you. If, however, you tender larger electrical projects, where you may split the work into sections and need to produce a schedule of rates for variations to the specified works, then an electrical estimating package may be of benefit and you should probably at least explore further whether it will help your business.
Assuming you do, lets consider the three key areas that estimating software companies espouse as major advantages.
Time Saving is always the number one selling point. They promise that once you’ve purchased a system you will spend afternoons on the golf course or long weekends with the family not sweating over paperwork. Let’s look at the reality of these claims. With larger projects it is fair to assume that you probably will save time. How much time? Reported saving are up to 75%. The important words here are “up to”. I do not dispute this figure, in fact I know it is possible, but in truth it depends on the type of work you are pricing and the set up of your particular system. In a recession, however, saving time may not be your priority. That said it may give you the advantage of being in a position to submit more tenders, which should increase your opportunity of winning more work.
More Accurate Costing is the second big selling point. When margins are very low, as they can be in a recession, there can be a fine difference between “buying” work and pricing competitively. If you need to cut margins a bit closer to the bone then estimating software should define your project costs more clearly and accurately. So whatever decision you make it will not be on a wing and a pray, but an informed and intelligent decision. The ability to control costs is always vitally important and absolutely crucial with tighter margins.
Thirdly the promise of Professional Presentation may not have seemed that important to you during the boom years but it does matter during a recession. Why? Because your customers have more choice and they will not only be looking at price. In the last recession there were many of contractors that started projects but did not complete them. This will be a consideration for your potential clients. They will inevitability err on the side of caution and lean towards a tender that they feel has been professionally costed and presented.
So, assuming you decide the above benefits will help your business, you will then need to decide if a system is affordable to you and if so when is the best time to bring one on board.
The cost of electrical estimating software can vary from free to thousands of pounds. Very little in the business world is truly free and a free system is likely to have limitations, either in ability, services offered such as support, or products within the database and the frequency product price updating. If you can work within the limitations of a free system, then you are very fortunate and have no need to pay for a system. If, however, you need accurate material prices, breadth and depth, flexibility, fine tuning and support then you will probably find that you need to invest in one of the paid for systems.
There are many methods we can apply for calculating whether you can afford the investment and most companies selling these systems will have their own formula for cost justification and flexible ways to pay. A tip here would be to check exactly what you are signing up for. On-going costs can vary quite widely and hidden costs can come back to bite you in the future. The question may not be if you can financially afford a system, but whether the advantages of such a system will give your business the edge in this competitive market. Moreover, can you survive without such a system?
Right, we’ve considered the type of work you do, the main advantages of using a system and the financial aspects of buying a system, but is a recession the right time to buy electrical estimating software? There are a number of factors to consider here. The obvious one is cost, but don’t forget these companies also need the business, see if you can get the cost spread over a comfortable period, ask for interest free payments for lease purchase – You may find that now is a good time to negotiate a great deal. Time is another consideration. We all know that when we are busy we don’t have time to look at a newspaper, let alone get to grips with new estimating software. The silver lining of a recession cloud may be that you actually have time to invest in learning a system ready for busier times. Finally, you have to decide if the combined benefits of tighter, more accurate pricing and professional presentation will help deliver what you need to survive a recession and more importantly be ready to grow when we come out of it.
The next problem is choosing which company and system to go with. Look beyond the marketing hype, you may not have to buy the most expensive system on the market to get what you need. Because a system is advertised in all the glossies, or is at the top of google through paid marketing does not mean it is the best system for you. This only tells you that the company pays for brand awareness so that consumers think of them when they need that product.
When looking for a system make sure that the application has a natural flow to producing a tender. You should be able to tailor the system to your needs as you work and edit completed projects easily. Most systems come with installation times, so check if there is an option Not to use the supplied installation times. This might sound like a strange consideration to anyone new to electrical estimating software, but here is the reason. Often when contractors first look for an estimating system, some hope it will do all the work for them, or think that they will get one of the office staff to do the take-off for them. I am afraid that it won’t and you can’t – well not if you want to stay in business.
Like any other equipment you have, it is a tool, no more, no less. It is as accurate as the information you feed in – “Garbage in, garbage out”. The more you put into the system at the start, the greater your rewards will be – and it will reflect “your” cost more accurately. Let me ask you, who knows best how long it will take you or your guys to install materials? You do of course, so if you invest in a system, why would entrust your future to some “industry norms” that may not be relevant to your type projects or work methods? In my opinion, the perceived short term gains are a false economy. If you are going to take the time and cost of investing in one of these systems, then do yourself a favour and set it up for Your business. Consider this. Most contractors have stock products that they use for estimating. Your selected system should allow you the option to labour the database materials as you are producing your take-off. Therefore, realistically by the time you have estimated half a dozen of your larger projects you will have set your labour times for most of the materials that you will ever use and more importantly – you will know that these times are accurate for your business.
In recession hit times, flexibility is essential. Make sure the application allows you to test various mark-up scenarios, apply different mark-ups to different sections, and displays detailed results of these instantly on screen. Just as important is the ability to bury preliminary cost invisibly in selected sections of the job, or within selected elements such the material or labour costs of the project. Ease of use and flexibility is essential.
When it comes to the reports, don’t just be satisfied that they look better than the old ones you banged out on the spreadsheet when you started the business. Take a look at the reports the system produces. Does it cover every option that you need? Does it offer an initial Quotation Report that includes areas for your Cover Letter, a Tender Summary and your Terms and Conditions? After a successful submission of your tender summary, your client is likely to ask for detailed schedule of rates. A point to bear in mind is that some local authorities, amongst other bodies, may ask for these unit rate to be split into labour and material elements, so make sure your system provides all the variation that you may need to compete.
Remember this system is supposed to be saving you time and giving your company a smooth, professional image. You should be able to add your company logo or letter head graphics to personalise the standard reports and give them that professional appearance. Professional presentation is one of the advantages we have identified as particularly important during a recession and it takes little effort on your behalf so make sure the system lives up to expectations. Most reports are emailed in PDF format these days, so make sure your quotation report includes a professional cover letter as standard. This should support your digital signature, as well as looking professional you need to include that personal touch – you won’t get a second chance to make that first impression.
Product databases should cover the product ranges that you require. You will also need to consider how often you need the prices updated and how. There are a number of ways this can be done e.g. by disk (for the dinosaurs!), by email or by an automated service application that runs in the background.
Training can be a thorny issue. Costs vary and there is doubt over how much one person can take on board during a day’s training, up to 20% assimilation is the general consensus. You may find that the better companies offer context sensitive training videos that you can refer to at the point you require them. If training is a thorny issue, then technical support is a garland of barbed wire. The costs and rules relating to technical support vary dramatically from company to company. I cannot stress enough how important it is that you question if you need to pay extra for this, what it covers or is there free support provided. I believe that any ethical company should stand behind its software. If they have bugs, they should not expect you to pay for these to be fixed. If the software is professional and stable you really should not need technical support – upgrades can always be purchased when you require them. Consider this, if a company looks to extras like training and support charges to boost their income, are they really going to give you everything you need up front to make the system work smoothly? Check what you get up front in the way of training and ongoing support for free. This should give you a good bench mark of whose interest they are looking after and how much they want you to succeed without paying over more money once you have purchased their product.
All things considered where do I stand on the whole question of estimating systems recession or no recession? You can’t avoid the future nor should you want to. Careful consideration will always pay dividends and may be now is a good time to negotiate yourself a good deal if you feel an estimating software package is the way forward for your business.