Questions to ask when selecting a computerized estimating system

If you are currently estimating manually or with spreadsheets, it's probably costing you more in time and labor than the most expensive system even if you valued your personal or employee labor at a low hourly rate.

That's in addition to the stress related to the ever-present danger of calculation errors. The accuracy of sheet metal estimates is, after all, your prime defense against losing money on any given job, or suffering even worse consequences underestimating on a large project.

The key to purchasing a sheet metal estimating system best suited for your needs is knowing the right questions to ask prior to the purchase. The most important considerations are listed below and should make your purchasing experience much, much easier.

Computerized sheet metal estimating systems vary widely in structure. Typically, a system is designed to excel in one or more specific areas such as accuracy, speed, simplicity or the time required to get the system up and running.

However, buyers should be aware that not all systems incorporate all of these attributes. This is not because of any specific shortcomings in design or structure, but simply because the estimating of HVAC sheet metal products' materials and labor has become complex and technical.

Changing duct-construction standards, such as in the upcoming Sheet Metal and Air Conditioning Contractors' National Association manual, will most likely require some updates to gauge, seam, sealing and connector calculations, and the system you select should be compatible.

The array of considerations and attributes represent a classic list of virtually impossible combinations. For example, it is unrealistic, if not downright impossible, to design an estimating system that is highly accurate, simple and quick to get fully online.

You can have a combination of accuracy and simplicity, but it may not be quick to get going. It is extremely difficult to have all three. The fact is, if you want maximum accuracy, the system database requires an extraordinarily large amount of accurate productivity factors that are relative to unique shop and field operations, which may take months to acquire and input into the system data files.

A computerized sheet metal estimating system should be accurate to about 2 percent, plus or minus, when working on a 10 percent profit margin. Accuracy becomes a determining factor in the purchasing process. Keep in mind a minimal 10 percent labor shortfall can absorb up to 50 percent of the job profit. By default, to ensure accuracy, you will need to have hundreds of labor factors incorporating your shop and field operations.

Luckily, many computerized sheet metal estimating systems have file-updating software that allow productivity and duct-construction-standards tables to be updated in seconds. Some vendors can even provide these files via Internet to download directly into your computer, much like Microsoft and Norton system updates.

Armed with the following list of estimating-system attributes and functions, you should be much better positioned to ask the right questions and select the system best suited to your needs and expectations.

What are its estimating methods?

How you have collected your shop and field productivity data over the years should largely determine the software structure that will be most compatible for your operation. If you have collected productivity data based on pounds of productivity per man-hour, then software using the traditional "pounds" method will probably be best for you. If you have accumulated productivity data relative to man-hours per piece (a piece being a specific duct fitting or accessory), then one of the "piece" method systems will probably be best for you.

Is it compatible with changing technology?

Ask vendors for a demonstration of how the software handles duct-construction updates or regional building codes dealing with sealing and energy-conservation requirements.

How does it handle metal-cost calculations?

Considering the ongoing increases in sheet metal prices, both the duct-construction pressure tables on automatic gauge selection for ductwork and the logic for calculating the theoretical cost per unit of metal purchased and charged out should use common figures. If you are purchasing your metal on a theoretical weight or cost per square foot, you should be able to estimate using the same numbers. (See "Too much, too little, too late," SNIPS, June 2004).

How efficient is it at data entry?

At some point, hopefully soon after the purchase of your new system, estimating will become simply a data-entry process. This means it is very important that the system have efficient data-entry fields and a standard keyboard. The trend in many estimating offices is to train estimators' assistants to input the bulk data and information. This is found to reduce job-input costs and improve accuracy while freeing up project engineers and lead estimators to concentrate on work that is more technical.

Does it use Microsoft Windows?

Almost everyone is familiar with the Windows tool bars and on-screen menus. A true Windows environment will enable an experienced user to export most of the estimating system-generated job totals and related files to other Windows software systems, such as in-house-built spreadsheets, accounting systems and job-costing systems.

Is it a real-time system?

The pace of sheet metal contracting continues to accelerate. Customers and design firms are requesting bids that are more accurate in less time than ever before. It is extremely helpful to quickly input and calculate totals on the screen.

Can you use it with CAD?

This will allow operators to draw a job on their computer-aided drafting systems, download the file, and generate a cost estimate.

What's the digitizer item or length entry?

This is common on most systems and is quite efficient.

Does it allow e-mailing and/or faxing of material lists to vendors?

Getting material vendor quotes quickly and accurately to subcontractors is very important. Ask for a demonstration of this process.

Does it provide understandable and comprehensive information and costs?

Your new system should generate clear and understandable totals for the various types of materials used, for labor allocated, for accessories costs and labor, subcontractor quotes, pounds- or piece-method labor - or both - by total job and by area or zone.

Can it insert ‘what if' changes quickly and easily?

The possibility - and probability - of last-minute substitutions is always an important factor in estimating sheet metal jobs. Wrap is often substituted for duct liner, duct board for metal or round for rectangular duct. The ability to do unit, system, or area substitutions quickly and automatically is a valuable asset.

Can it ‘jump-start' system instructions?

Some system vendors have developed abbreviated "jump-start" instructions that enable new users to quickly generate estimates. The jump-start concept incorporates numbered steps to quickly set up the basic files needed to run the first estimate for new users. This will usually have a new user running estimates with appropriate wage rates and material costs in a day or so.

This is good for continuous training of first-time users or for existing users that have not updated the data files for a while and need to have condensed instructions to refresh their memories.

A final tip on researching prospective systems: Ask for references, but not just any references. Request the contact information on a consecutive group of purchasers such as the last six systems sold and delivered prior to September. This will ensure you get accurate information on the vendor's setup, training quality and the effectiveness of the system since installation.

(Efficiency expert Jim Segroves is the author of Sheet Metal Shop Burden Recovery Guidelines. Contact Jim Segroves Consulting at 712 E. Walnut St., Garland, TX 75040; call (972) 494-6333; fax (972) 272-7062; see on the Internet.)