Construction Estimating Software & Takeoff Systems

by Houston Neal
Director of Marketing, Software Advice
May 10, 2012

There are more than 50 construction estimating and takeoff software packages available. They range from Excel add-ins to construction estimating calculators to enterprise-class, multi-user systems. They range in price from $99 up to six-figure investments. Meanwhile, there are different systems designed for different industries, trades and divisions. If you haven’t been in the market for software in some time (or ever), there’s a lot to figure out. We’ve written this guide to help you make sense of the market.

Here’s what we’ll cover:

What is Estimating & Takeoff Software?
What Type of Buyer Are You?
The Software Vendor Landscape

Market Trends to Understand
Benefits & Potential Issues
Recent Events in Estimating Software

What is Estimating & Takeoff Software?

Construction cost estimating software and takeoff software helps contractors and builders measure plans, calculate material and labor costs, and produce detailed, professional proposals. The recent increase in fixed-bid work and intense competition for projects has contractors sharpening their pencils. Well, actually they’re doing away with pencils and adopting modern construction takeoff software and estimating systems, including web-based systems. Meanwhile, building owners and project sponsors are calculating their own estimations to develop conceptual estimates or perform a “reality check” on bids they receive.

Takeoff and estimating are two separate, but often integrated, programs. The takeoff system allows a construction estimator to measure areas, lengths and volumes - either from a blueprint or digital file. Most estimators who buy new takeoff software are looking to do their takeoff onscreen. That is, they measure the plans right on their computer screen, often with a stylus - an electronic pen. This replaces the prior method of using a digitizer, or manual measurement with a wheel or ruler. Contractors working in a vertical will be primarily focused on measuring two-dimensional (2D) plans. Earthwork contractors, concrete contractors, heavy construction contractors, and utility contractors will more likely require three-dimensional (3D) takeoff capabilities for visualizing grades or profiling trenches (a feature commonly found in heavy construction systems). 

A cost estimating system, meanwhile, is used to apply up-to-date material and labor pricing to the takeoff data in order to estimate costs. The system maintains a database of material and labor costs, which can be populated manually or updated regularly through services such as RSMeans. The application manages a library of assemblies - combinations of materials that together form a unit of construction, such as a wall. Estimators will use the tool to define what assemblies and labor are required to build a component of the project, as well as how many assemblies are required based on the measures they determined during the takeoff process. Once the materials and labor are determined, prices and rates are applied, a markup is calculated, and the detailed estimate is published for bid day.

What Type of Buyer Are You?

Before you dive into the details of various systems, you will want to identify yourself with one of the buyer types we’ve detailed below. Most buyers fall into one of these groups:

• Commercial estimators. These buyers perform a high volume of estimates spanning multiple divisions. As such, they need highly efficient commercial construction estimating software that can estimate everything from earthwork, to concrete, to mechanical. They will also collaborate with co-workers, so multi-user functionality and shared databases are needed. 
• Specialty estimators. These buyers work for specialty contractors like mechanical, electrical or earthwork contractors. They require unique functionality for their trade; for example, a mechanical contractor might need to estimate custom sheet metal work for HVAC ducts. In most cases, those features will be their most important consideration.
• Residential estimators. Most residential contractors are small operations and in many cases the owner is doing the estimating. In these cases, the buyer is typical seeking a straightforward, affordable residential estimating solution. Simplicity and ease of use trumps feature depth and sophistication. 
• Takeoff buyers. These buyers are seeking to speed up their takeoff process, rather than replace their entire estimating system. They may already have a system in place or they are comfortable with their current Excel-based model. As a result, they are only seeking an effective digital takeoff tool, or a digitizer program. 

The Software Vendor Landscape

The estimating & takeoff application landscape is highly fragmented and can be confusing. However, we can simplify the market by matching top-rated solutions to our four buyer types.  

Market Trends to Understand

These pre-construction application market trends should be considered when evaluating a new system.   

• Digital takeoff. Digital takeoff has matured and it provides tremendous efficiencies. It reduces the cost, time and hassle of printing paper plans - and costs less than a plotter or reprographic service. Most systems can measure .pdf, .tiff, .dwg, AutoCAD files, and more. Buyers should strongly consider, and trial, digital takeoff before investing in another digitizer board. 
• Increased competition for jobs. The sluggish economy means that contractors are competing for fewer jobs. GCs and project sponsors are running more intense selection processes and bids are due sooner. Contractors need to produce bids faster and more accurately to compete for more jobs, win, and make a profit. 
• Geographic migration. Some companies are now bidding on jobs outside their traditional geography. The availability of electronic plan files via online plan rooms hosted in the cloud, as well as data from BIM files, makes it easier to identify projects and get the data necessary to produce a bid. To compete, contractors need an efficient infrastructure.  
• Multi-user estimating. Many contractors are seeing a need to involve more employees in the estimating process. In some cases, this results from growth. In other cases it results from a reaction to turnover of long tenured estimators and a resulting skills gap. And other times it results from a desire to gain consensus on estimates. Regardless, multi-user systems are in greater demand.  

Benefits & Potential Issues

Here are some of the benefits realized from successfully adopting modern estimating systems. 

• Win more bids. With improved efficiency in their estimates, contractors can bid on more projects. With more accurate estimates, contractors can bid more competitively and avoid the need to pad their estimates. Through this efficiency and accuracy, contractors will win more bids. 
• Improved profitability. By developing more accurate estimates, contractors will know what they are getting into. All other things being equal, project costs will more closely match the bids they submit. As a result, the contractor will be more likely to realize a profit on the project, rather than having to “eat” unforeseen costs. 
• Bid on more jobs. When a contractor can bid faster and have a better sense of their costs, they can get more bids out the door. With more “at bats” it is more likely that the contractor will win more business. 
• More professional bids. Part of winning the business is the impression the client builds of firms in the selection process. As a result, it is critical to present a professional bid that is well-formatted and offers an appropriate level of detail. Most of the top systems offer the ability to print or PDF a professional-looking proposal from the system or export the bid to Microsoft Word.

In addition to the aforementioned benefits, we recently published a list of the top estimating challenges most companies face. To see a list of common challenges, and to compare your estimating processes to industry standards, check out our 2012 Construction Estimating Benchmark Report.

Recent Developments

It's more important than ever to stand out from the competition by delivering timely, accurate and professional estimates. For this reason, it’s necessary to use the best construction estimating software for your trade. 

Recent developments in the construction estimate software market have focused on improving integration with other construction software programs and offering better digital estimating options. Here are a few updates you should know about from three of the leading contractor estimating software vendors:

• 
  ProEst Estimating - In January 2012, ProEst Estimating released the newest version of their construction estimator software, ProEst 2012. The updated system, used by more than 8,000 firms across the globe, includes built in digital takeoffs and newly developed integration with Viewpoint V6 to minimize data duplication for firms using both software packages. With the new update and integration capabilities, firms can manage their estimations, digital takeoff, bid day analysis and accounting within an SQL database. ProEst 2012 estimating software for contractors can be purchased in three subscription-based varieties: Standard, Professional and Enterprise. Each package includes unlimited phone and email support.
• PlanSwift - PlanSwift recently announced a partnership with the Reprographic Services Association (RSA), which provides plan room and document management services, and helps estimators find work. The partnership is designed to help companies perform their takeoffs online using construction estimation software. In 2012, PlanSwift also released a new pay-per-takeoff program in which estimators only have to pay for the takeoffs they perform. This helps reduce the upfront investment of contractor estimate software. Finally, the company released SwiftMarket, a program that allows material manufacturers to upload product specs so estimators have access to more accurate information--via their construction estimating program--in real time.
• On Center - In March 2012, On Center won the Commercial Top Products Award from Construtech magazine for their On-Screen Takeoff, Quick Bid and Digital Production Control products. To better assist their customer base of 20,000 contractors, On Center recently announced that the educational branch of their company, On Center University, will offer free construction takeoff system and estimating software webinars. All customers with a current license will have unlimited access to webinar sessions with a certified trainer. In terms of product announcements, the company has released three iPhone apps--Wood Flooring Estimator, Carpet Estimator and Construction Job Board--to assist estimators while in the field. Companies that have used the apps or any of the above products should share construction estimating software reviews.

Have an opinion on this guide? Email the authors. We appreciate the feedback.