Estimating – A Necessary Evil

Outsourcing your estimating tasks can be a strategic move to optimize your contracting company’s operations and improve overall efficiency. While estimating may seem like a necessary evil, it plays a crucial role in the construction business. By outsourcing this function, you can free up valuable time and resources within your company, allowing your team to focus on core competencies and higher-value activities.
One way to justify the cost of outsourcing estimating is to highlight the potential long-term benefits it brings to your business. Emphasize that accurate and thorough estimates are essential for project success, as they directly impact profitability, project timelines, and client satisfaction. By entrusting this task to specialized professionals, you can ensure that your estimates are meticulously prepared, reducing the risk of costly errors and rework.
Furthermore, outsourcing estimating offers the advantage of scalability. As your business grows or experiences fluctuations in demand, an outsourced estimating team can quickly adapt to your needs, adjusting their workload accordingly. This flexibility allows you to manage costs more effectively, avoiding the fixed expenses associated with hiring and training in-house estimators.
Incorporate a cost-benefit analysis in your justification to demonstrate the potential cost savings from outsourcing. Compare the expenses of outsourcing to the overhead costs of maintaining an in-house estimating department, including salaries, benefits, software, hardware, and ongoing training. Often, outsourcing can be more cost-effective, especially for companies with varying project volumes.
Address the time-consuming nature of estimating and its impact on overall productivity. Explain that by outsourcing this task, your team will have more time to focus on core activities such as project management, client relationship building, and quality control. This shift in focus can lead to improved project execution, timely completion, and enhanced customer satisfaction.
An outsourced estimating team can bring a fresh perspective and expertise to your projects. They may have experience with a wide range of projects, various construction techniques, and the latest industry trends. This knowledge can lead to more accurate estimates and innovative solutions, which may ultimately give your company a competitive edge.
While some customers may question the additional cost of outsourcing estimating, it’s essential to educate them about the benefits it offers. Transparently explain that investing in accurate estimates upfront can prevent costly change orders and disputes during the construction process, leading to a smoother and more profitable project overall.
Additionally, outsourcing can enhance your company’s ability to take on more projects simultaneously or tackle larger and more complex endeavors. This expanded capacity can lead to increased revenue and growth opportunities, which can outweigh the initial investment in outsourcing.
Consider offering clients detailed breakdowns of the estimating process and its value. Demonstrating the comprehensive nature of the estimating task and how it contributes to better project planning, resource allocation, and risk management can help them understand the necessity of this cost.
Furthermore, if clients are still hesitant about the cost, explore the option of sharing the cost of outsourcing with them. A collaborative approach may involve a more equitable distribution of the estimating expense, making it more acceptable to the clients while still benefiting your company’s efficiency.
In conclusion, justifying the cost of outsourcing estimating in your commercial contracting company requires a well-rounded approach. Focus on the long-term benefits, scalability, cost-effectiveness, improved productivity, and competitive advantage that outsourcing brings. Educate your clients about the significance of accurate estimates in project success and explore ways to share the cost burden. By making a compelling case for outsourcing, you can streamline your operations, enhance project outcomes, and foster stronger client relationships, ultimately contributing to the growth and success of your business.