The Changing Landscape of Estimating

This post was published in the July/August edition of DCD Magazine.

The technology evolution in the A/E/C industry is happening. Advancements in smart equipment, integrated software solutions, innovative uses of current products, and the involvement of forward-thinking leaders are driving this evolution. The majority of these new advancements revolve around being more efficient with our traditional practices and reducing waste. Preconstruction has now entered into the technology evolution environment and the estimator’s options are lighter, more robust, and more agile than ever.

Estimating is not a new practice and the tools used by estimators to build their estimates have changed little in the past 20 years. The incumbent estimating software vendors (Sage Timberline, MC2, WinEst, and US Cost) have been serving the industry for the past 20-30 years in various roles beyond project estimating and have helped develop the traditional process of building estimates. The vendors’ products collectively are similar in nature taking the form of a spreadsheet, with varying levels of sophistication around user tools, a database backend, reporting and line item generation through assemblies, and cost models.

Over the last decade a variety of integrations between the estimating systems and electronic 2D takeoff has enabled quantities from drawings and PDFs to be tied to the quantities in the estimate. More recently 3D quantity extraction from building information models (BIMs) has also entered the fray.

To date, the workflow employed by most estimators and supported by the traditional software products is to extract quantities from a 2D PDF or model, use assemblies and line items to describe the project and its assumptions, organize the estimate, and then print either paper or PDF versions of the results. The workflows supported by these tools have changed very little and most product changes have been incremental rather than order of magnitude improvements.Traditional Estimating Workflow


Outside of the estimating space, the A/E/C industry as a whole has been undergoing some significant changes including more collaborative workflows, different contractual relationships between owner, architect, and general contractor, adoption of mobile devices, and a shift to cloud based software to name a few.  Many of these changes, combined with owners who are much more cost conscious and risk adverse, has led to general contractors locking in prices much earlier in the life of projects than previously was the case.

The dilemma has been how to lock in a price without a detailed design. Competition is driving the industry to find creative and innovative methods of defining enough project direction from which collaborative decisions about scope, means, methods, and quality can be defined so that cost targets can be defined.  As the design is developed the entire design and construction team work together to ensure that design and cost stay aligned.

Where once it was acceptable to wait for a design to be complete or major milestones reached so that the sequential disparate activity of estimating could occur, the new workflows have changed the requirement to involve concurrent collaborative activities where both design and estimating are occurring at the same time.  The need to tie the estimate to quantities within the design and conversely elements within the design to costs in the estimate has led to truly collaborative decision making and workflows.

Collaborative Estimating Workflow

The tools and features required to estimate in the new collaborative and often real time, transparent workflows are also changing. A number of new vendors such as Nomitech, Innovaya, Assemble, and Beck Technology have entered into the U.S. market with a variety of new solutions. These solutions support traditional workflows but layer on tools to focus on the requirements associated with these new workflows such as defining and communicating assumptions within the estimate. These tools rapidly increase the access to data within the design and the estimate to facilitate conversations with the architect, general contractor, consultants, subcontractors, and owner.

Even as new software vendors appear in the preconstruction space, change within the traditional estimating vendors has occurred. In 2012, Trimble made a big splash in the A/E/C software world by acquiring WinEst, Vico, Tekla, Sketchup, and a host of smaller software products. Also in 2012, German-based RIB acquired MC2 and US Cost. Overnight the estimating vendor landscape changed with three of the four incumbents being purchased. Anecdotally, it appears that Trimble and RIB see the world moving to model-based deliverables and have acquired traditional vendors with upgrade strategies; Trimble from WinEst to Vico and RIB from MC2 to iTwo.

Although it’s hard to know what specific vendor’s plans are for their existing products, it is clear that older products are being replaced both by new vendors’ products and existing vendors such as Trimble and RIB selling upgraded products for replacement of WinEst and MC2. As the vendors, products, and functionality in the space have changed over the past couple of years, more and more companies are faced with decisions related to their preconstruction solutions. With the majority of workflows still being traditional but with an ever growing volume of alternate workflows and more and more models being provided from designers to estimators, the decision to stick with existing products or move to new products from new vendors is picking up speed.

Estimating is rapidly evolving.  What was once the norm to get the job done is no longer a viable option for firms eager to create the best project.  Firms will either need to adapt to change and embrace the transformation or be willing to be second best.