The Science of Effective Estimating
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The Science of Effective Estimating

In looking at the process of effective quoting and estimating, that careful balance of science and art, how do you leverage data to truly make an impact?

By Brigitte Merten, Senior Marketing Manager, KeyedIn Solutions

Accurate job costing is a vital process for sign manufacturers and a task that must be completed with precision and insight.

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  • Any job shop estimator will likely tell you that their job is part science, part art. This is especially true in the sign industry, where client projects are typically custom-order and each project is unique. The design and installation requirements of each project drive the material and manpower needs and the hard costs associated with both. Underestimating a job quote will negatively impact scheduling, inventory and the bottom line. On the other hand, the impact of overestimating a job could mean losing the business to a more competitive bid.

    Of course, CFOs, owners and sales people would prefer that there would be more science behind estimating and quotes. This is where historical data can serve as a goldmine for perfecting the estimating process.

    Mining for Data Gold
    Many companies have already identified the benefit of using software to move beyond cumbersome spreadsheets and manual processes. Taking this step alone provides significant improvements in productivity and helps to cut costs. But looking at the process of effective quoting and estimating - that careful balance of science and art - how do you leverage data to truly make an impact?

    In order to accomplish this you need a more robust technology solution on your side. Consider it an ace in your sleeve. Estimating software can serve as an intelligent tool to bolster the art aspect of estimating with hard data that will enable improved scheduling, budgeting and forecasting.

    Estimating impacts much of the day-to-day and strategic operations of a sign shop. When the estimating is accurate, the quotes are reliable. When the quotes are reliable the pipeline is straightforward and comprehensive, and a comprehensive pipeline gives sales the best shot at hitting their forecasts.

    Producing a realistic, competitive quote to help with the winning of business is only one benefit derived from putting your data to work. Cost ascertainment - understanding and evaluating how resources and materials were utilized after the job is completed - is also a great help to management in controlling costs and maximizing profits.

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    These solutions put a wealth of information at the fingertips of estimators, enabling them to formulate prices based on multiple figures and factors. This will not only enable more accurate estimates, but also helps glean which projects are the most profitable. Additionally, estimating solutions enable increased efficiency, helping to create quotes and proposals or convert estimates to sales with just a few clicks of the mouse.

    Partnering for Success
    When selecting an estimating solution there are two important factors to consider: first that it is part of a fully integrated solution that unites all business functions and; second, that it is designed specifically for the sign industry.

    Utilizing an integrated solution is the best way to maximize the power of your technology investment especially when it comes to compiling data for proper estimating and quoting. Sure, you could piece together some accounting software with spreadsheets and an estimating solution and be a functional success. However, in order to truly have access to accurate and real-time data, an end-to-end solution that is designed to support the full business is the only opportunity for optimal success.

    Look for a solution that provides strong features for estimating and production to scheduling and installation, with a fully-integrated financial management and accounting tools.

    Looking at the second key criteria, partnering with a vendor with industry specific functionality and know-how, you may ask, why is this important? In theory, a well created solution should be functional regardless of the industry. There is some truth to that theory, but itís not worth the risk of testing it. When you work with a vendor that provides a technology solution that is designed for the sign industry, you are gaining both relevant features and expertise Ė and one influences the other.

    Take for example the highly customized nature of sign shop products and its particular practices for job costing. To gain the efficiencies, insight and decision-making tools that are useful to sign manufacturers, itís necessary to understand the nuances of a made-to-order business. A vendor that is committed to designing for specific industries boasts an internal team that gains important perspective on the specifics of running a business in that industry, with every sale, implementation and support call.

    In addition, industry-dedicated vendors typically help bring together their clientele, so that users can share best practices and innovative applications of the solution with others in their industry. This focused understanding, from the vendor team as well as from the user community, is typically a key driver for enhancing the software, which in turn greatly benefits end-user companies.

    Call Me Copperfield
    Leonardo da Vinci had an affinity for both art and science. Perhaps his first job was as a manufacturing estimator? In all seriousness, accurate job costing is a vital process for sign manufacturers and a task that must be completed with precision and insight. Using an integrating solution that puts detailed data on your side, and the ability to manipulate it to identify trends and patterns in completed projects, the science of estimating accurately and competitively may start looking less like art and more like magic.

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