Successful estimating both off-the-job and on-the-job all have one thing in common – they all have systems, or sets of procedures that they implement and improved on a regular and consistent basis. In the Electrical Engineering and Contracting Business industry how you manage your human resources is crucial and a major factor that determines success or failure.
McDonalds and is probably the best example of this: every McDonalds franchise you walk into does everything the same way. They hire and train their employees the same way, the food is prepared systematically in the exact same way, when they serve food is done the same way.
They have developed management systems for every aspect of their business – and when a McDonalds franchise follows the systems that are in place – they make money. There is nothing willy-nilly about what they do.
When it comes to systems there are two important aspects:
- An integrated systemized management approach and methodology
- Implementation of the management system
1. An integrated systemized management approach and methodology
It is one thing to have an accurate off-the-job estimate and operate on-the-job without any knowledge the difference between the same specific estimated and actual tasks, missing out on variations and repeating the same future estimating mistakes over and over again … and another is to have an integrated off-the-job accurate estimate and on-the-job operational project system comparing estimated and actual tasks providing captured variations and valuable lessons learnt providing updated information for future improvements.
An integrated systemized management approach and methodology is having a management system with a step by step approach and methodology such as:
- Business Development Module
- Estimating Module
- Job Costing Module
- Accounting Module
- Service Call Management Module
- Project Management Module
- Customer Relationship Management Module
- Feedback Link Module
With the estimating process the vital modules of the integrated management system are:
This provides the foundation on detailed measured materials and proven labour requirements down to the work breakdown structure level for the project and is where profits can be made.
Included in the estimating module is an updated material catalogue with a library of the latest prices and updated labour units for installing each an every item of material in different environments as well as various number of material items install collectively with combined labour activity called pre-builds or kits.
Job Costing Module
We are able to provide a comparison report between actual and estimated values with cost to complete and profitability reporting facilities.
Project Management Module
We are able to provide scheduling including variation and extension of time claims built into the system providing a reminder process for the mile stones as they come up; this helps separate the estimated values and variations which is vital for estimating accuracy and project profitability.
Feedback Link Module
To complete the process we able to build in a feedback link process to show differences between estimated and actual value comparisons at the work breakdown structure level providing valuable lessons learnt information for future improvements.
2. Implementation of the management system
You see you could have all the best systems in the world – but if they are not implemented – they do not work – 100% of the time.
The implementation of an integrated systemized management system such as simPRO and a process based system in all the estimating activities shown in the flow chart below will dramatically increase the chances of success by capturing all the information required to make informed decisions and improvements required for success.
Integrated systemized management systems take a lot of time setting up due the nature of entering all your business information into the system and some people do get frustrated with the time it takes but once the set up process is completed the rewards are dynamic; to short circuit this process in the electrical estimating module, training is available at www.theelectricalestimator.com.au/estimating-training