Guide: Selecting an Estimating Software for Construction



10 minutes
Table of Contents

To accurately gauge the cost of construction projects, General Contractors develop detailed cost estimates. The process enables a clear forecast of the breakdown costs and indicates the proper pricing for the full scope of work for the project. This procedure is part of the pre construction process. 

While this stage is crucial to ensuring a profitable construction project, this process is both costly and time-consuming. Months can be spent estimating a project with no guarantee of being awarded the project. Major general contractors globally are using construction estimating software to increase their competitive edge and improve their team's productivity.

Read further to gain insight on choosing the ideal estimating software for construction along with the following topics:

  • Cost Estimating in the Bidding Process
  • Importance of Cost Estimating in the Construction Industry
  • Value in Using an Estimating Software for Construction
  • Beneficial Features To Look For in an Estimating Software for Construction
  • Challenges When Selecting an Estimating Software for Construction
  • Guide To Choosing the Construction Estimating Software for General Contractors
  • Different Estimating Software for Construction

Cost Estimating in the Bidding Process

The bidding process begins when the project owner distributes a  Request for Proposals (RFP) with directions outlining important details or their requirements. Their requirements will include details on project specifications, drawings, delivery method, and contract type.

In pursuit of being awarded the project, the general contractor will seek quotes from subcontractors to price the completion of the full scope of work for the project.The general contractor will include the breakdown of all costs when forecasting the total project cost to the owner.

The General Contractor implements the following process during the pre construction phase:

  • Coordinate with the architect and project owner
  • Visit the project’s site
  • Study the project scope and timeline
  • Analyze the drawings
  • Approximate all materials required for the project
  • Determine the schedule for completion
  • Identify labor requirements and costs for the project
  • Present the cost estimate and the data supporting it 

Importance of Accurate Cost Estimation in the Construction Industry

A 987-acre property sits abandoned 35 miles northeast of Louisville, Kentucky, on the Indiana side of the Ohio River. This area used to be the site of the unfinished Marble Hill Nuclear Power Station. This would have been Indiana's only operational nuclear power-generating facility. 

Because of failure to prepare a reliable cost estimate, construction was suspended, then completely abandoned in 1984, seven years after it began. The project was halfway complete and yet they spent $2.5 billion due to cost overruns. This is an example of how inaccurate cost estimates can negatively impact construction and prevent completion of a project. 

Dubai Metro is another example of a construction project with billions of dollars in cost overruns. Despite choosing the cheaper quote, the project owner had to pay an increased cost of 85% with a projected cost of $4.2 billion and a final cost of approximately $7.8 billion. 

These cases emphasize the importance of accuracy in cost estimation:

  1. Avoid Millions of Dollars in Cost Overruns  - Inaccurate estimates is one of the leading causes of cost overruns which can further lead to delay or failure in the completion of the project. 
  1. Prevent Losing Money or Sacrificing Design Elements - Projects that go beyond the scope of the estimate often require clients to sacrifice certain design elements or pay for the additional costs. 
  1. Minimize Delays - When there are inaccuracies in the budget forecast, it can be costly and time-consuming to readjust which leads to delays.
  1. Reduce the Risk of Shelved Projects - Inaccurate cost estimates can lead to financial difficulties faced by the project owner or contractor. These financial difficulties may result in indefinite project delays and abandonment of the project.

The Importance of Using a Fast Estimating Software for Construction

Cost overruns, delays, and financial problems can all be avoided with accurate and effective cost estimations. Unfortunately, the manual process of cost estimating continues to be expensive, time-consuming, and prone to human error. Major general contractors are relying on estimating software to streamline their pre construction process and remain competitive. 

Read further to learn more about the importance of estimating software for construction:

  1. Convenience - Construction estimating software can remove manual processes. AI-powered takeoff software like Togal.AI learns and improve with each processed takeoff.
  1. Speed - Using estimating software can accelerate the takeoff process. This leads to reduced labor costs and the submission of cost estimates faster than other contractors. 
  1. Accuracy - Manual cost estimations are prone to human error. Automated estimating software can remove the manual process and ensure improved accuracy.
  1. Cost-Savings and Improved ROI - With a faster pre-construction process and lower labor costs, automated estimation software for construction can generate a higher ROI for general contractors. Estimation software also helps reduce the effects of inflation by increasing productivity and profitability.

Challenges in Selecting an Estimating Software for Construction

There are many estimating softwares on the market, making it difficult to identify the ideal solution to integrate into the pre construction workflow. To avoid costly mistakes, one must be aware of the following challenges: 

  1. Low Accuracy and Manual Editing - An estimating software for construction should not require significant manual editing as this process is time-consuming and mistake prone. 
  1. Steep Learning Curve - Construction estimating softwares are designed to increase an estimator’s productivity. Softwares that have complicated interfaces make it challenging for teams to integrate into their workflow.
  1. Lack of Integration -  Most construction workflows require multiple softwares. APIs and integrations are necessary for a seamless integration. Ensure estimating solutions can accomodate information from other construction softwares.

Select a Construction Estimating Software for General Contractors

A wide variety of takeoff and estimating solutions are available globally. It can be difficult to select the ideal software to support a growing construction firm. It is imperative to distinguish estimation companies based on a number of differentiators, reputation, features, support, and accessibility. 

To ensure that the money spent on technology will be effective, evaluate the following: 

  1. Reasons for Investing in Construction Estimating Software - Identify the key benefits needed from a software. The checklist linked above can help when evaluating prospective estimating softwares.
  1. Features - When evaluating prospective estimating solutions, identify the features and evaluate if it is a match to the needs of the construction firm.
  1. User Experience Reviews - Read reviews about the company through sites like Capterra and GetApp. Evaluate the best and worst reviews and how they may be relevant to your user experience. Understanding the effectiveness of their user support team can display the quality of their customer service and user satisfaction.
  1. Request a Demo - Determine the quality of their estimating technology by participating in a live demo. Prepare questions beforehand and assess if the solution aligns with the construction firms needs and requirements.
  1. Review Training Materials - Determine if the company offers comprehensive training resources. Adequate training ensures seamless adoption of the estimating solution which results in optimal productivity.
  1. Available Integrations - During the demo, inquire whether the technology integrates with the  existing construction softwares used. 
  1. Price -  Construction estimating software typically costs between $30 and $250 per month per estimator. When evaluating an estimating solution, consider the return on investment and potential time-saved by using the technology. 

Enhanced Estimating Software - Togal.AI 

Most estimating software claim to achieve fast and accurate takeoffs but still requires ample manual editing to fit the project requirements. 

Togal.AI is an AI estimating software that can automate as much as 80% of the takeoff process. 

Powered by Artificial Intelligence, the deep learning models enable automatic analysis of drawings. Essentially providing the polygons and counts in seconds. Togal.AI can integrate with a growing number of  digital estimating softwares including Procore, Bluebeam, Destini, and more. 

Outlined below are the features of the estimating software for construction -  Togal.AI:

  1. 80% Faster Takeoff -  The takeoff process is laborious and could take weeks to months to complete. Togal.AI only takes a few clicks and 3-10 seconds to populate the polygons and object counts necessary for the  takeoff. Togal.AI enables estimators to save 90-minutes per drawing.
  1. 97% Accuracy - Togal.AI eliminates manual and error-prone calculations by interpreting plans with 97% accuracy. The risk of cost overruns is reduced and General Contractors can maintain profitable and predictable projects.
  1. Deep-Learning Technology - The process of detecting, labeling, and measuring project spaces and objects in the drawings can be tedious and time-consuming. With the use of A.I. and machine learning, Togal.AI can learn and improve from previous drawing analysis.
  1. Collaboration - Togal.AI enables a team to simultaneously work and collaborate on a single project through the web-based platform.
  1. Integrate with Third-Party Software - Togal.AI can easily integrate with existing construction software for a more efficient workflow.
  1. Simple and Intuitive Interface - Togal.AI simplifies the workflow and increases team productivity through it’s easy to use interface. 
  1. Security - Togal.AI is developed in-house ensuring user data is secure and protected.
  1. Availability - Togal.AI is accessible from any device with internet. Teams can work on takeoffs and complete proposals from any location with ease. 
  1. Compatibility - Togal.AI is compatible with any industry-standard drawing format including JPEG, PNG, TIFF, and JPEG. 
  1. Focus on Value-Generating Activities - With Togal.AI’s efficiency, GCs can shift their focus towards value-generating activities such as scoping, value engineering, and identifying the right trade partners.

Final Words

Cost estimation is a crucial part of the bidding process. It enables a clear financial forecast that dictates proper pricing for a job. Without accurate cost estimates, cost overruns could occur and lead to project delays, additional costs, and project termination. 

Unfortunately, takeoffs and cost estimations continue to be a laborious part of the bidding process. On average, the process could cost around $66,816.00 per estimator annually with no guarantee of a project being awarded. More General Contractors are relying on technology to remain competitive. 

With many estimation softwares available, it’s important to evaluate the return on investment before investing. Some of the features construction firms need to look for are the following: 

  • Accuracy and speed of takeoffs
  • Use of A.I. and machine learning technology
  • Ease of collaboration
  • Seamless integration with 3rd party software
  • User security and data protection
  • Accessibility from multiple devices
  • Compatibility with industry-standard drawing formats

To find the best software, identify the needs of the team and look for solutions to fulfill those requirements. Analyze  prospective estimating software features to understand how it will benefit the preconstruction team and the estimators workflow. Demos are recommended to gain insight on the software and to fully understand it’s functionality. To request a demo with Togal.AI, the AI-powered estimation software, click here.