December 10th, 2020
Estimating is persistent throughout the project delivery process. The creation of high level, rough order of magnitude estimates supports ideation and project selection. Detailed estimates support project budgets and scope changes identified during execution. In many cases estimates are developed at different stages of the budget lifecycle using different tools and procedures. This is due to the lack process integration between each step in estimate development. In addition to being inefficient, this approach often leads to inconsistencies and errors. This leads to problems as estimates transition to approved budgets and budget changes. Integrating a single estimating solution with processes such as ideation, project development, budgeting, resource management and change management is a much better approach. It provides the levels of accuracy, efficiency and transparency needed to deliver predictable projects.
The native integration offered by EcoSys to support estimating consolidation across the full project budget lifecycle is boosted further by the ability to easily integrate with external estimating solutions. As with other process areas such as scheduling and risk management, there is often a need to produce estimates in other solutions. This can be because of project type, complexity and required estimating techniques or methods. In those cases, external estimates are combined with estimates developed and managed solely in EcoSys using one of the several integration options available. This 80/20 integration rule allows you to always use the right solution to create estimates. It also provides 100% consolidation of all estimates at some stage of the lifecycle.
How EcoSys Supports Project Estimating Throughout the Stages of the Budget Lifecycle
The illustration below shows how EcoSys, with potential integration with other estimate sources, manages the project budget lifecycle.
The left section of the illustration shows the pre-execution, or project development stages. The right sections shows where estimating, and benchmarking, play a role in execution and close out stages.
Ideation / Opportunity Management
Providing an estimate of cost and resources is a common requirement for project ideas submitted for review and acceptance. While projects are not selected solely on expected cost and other factors such as alignment to business strategy and growth impact it is certainly a key consideration when giving the “green light.” EcoSys allows you to develop the same project estimate as the project progresses through the stage gate process.
As the project moves through each project development stage gate the level of estimate detail increases. This is because the scope is better defined and accuracy ranges reduce in terms of margin. During the early stages conceptual and feasibility estimates may be produced using model based estimating techniques. These rely on data unavailable within EcoSys. As the project moves to the select, define and, finally, the execute stage the estimating process can transition to EcoSys. Then, you can make preparations prior to the final approval of what will become the project budget.
The transition from final estimate to project budget is often manual time-consuming process. It requires you to break down the estimate, and its associated costs, and re-create it in accordance with the project cost breakdown structure. Managing both the estimate and the budget in the same solution enables a mapping process. Shown in screenshot below, it allows you to automatically generate the budget directly from the estimate. This provides a level of efficiency and auditability not found in other enterprise project performance systems.
Once the final estimate is approved, it is used as the basis of the project budget. Then, estimating plays a vital role during project execution. Based on the level of aggregation applied during budget creation the estimate will still be used as a baseline and reference point as project commitments are made. This ensures budget is utilized as intended. You can also incorporate estimate adjustment details into project contingency management processes. Then, you can make drawdowns and/or revisions as time progresses and work is completed.
During change management estimating plays a role in multiple areas. You can create estimates for significant scope changes that will form the basis of budget revisions. You can also identify cost changes due to inaccurate estimates developed prior to project budget approval.
Project Close Out / Benchmarking and Analysis
Estimates are not created during this stage. However, effective project close out processes do provide valuable data to support cost benchmarking and historical data analysis. By applying standard classifications and categorizations such as the International Construction Measurement Standards (ICMS), you can use previous project performance to develop productivity norms and the basis of future feasibility and conceptual estimates.
Benefits of Consolidated Project Estimating
EcoSys connects estimating across the project lifecycle. From initial estimates for opportunities to detailed estimates for budget authorization, you can do it all in an integrated environment. This helps you better manage project performance while capturing valuable data to improve the accuracy of future estimates.
Consolidated estimating offers many benefits while resolving common estimating mistakes:
- Efficient and complete estimates – Adopt standard and repeatable processes that drive consistency and ensures costs are not missed. Utilizing templates and norms to provides a solid basis for your estimates.
- Greater accuracy – Moving away from using spreadsheets to develop estimates eliminates manual data entry and the errors that go with it. Standardizing processes drives consistency, and built-in formulas, automatic calculations and adjustments improve accuracy.
- Better risk assessment – Create estimates within the same solution used to manage and control project planning, budgets, costs and changes. This helps you more effectively plan contingency.
- Better auditing and reviews – Automated workflows help optimize the review and approval process. You can also implement requirements checks and validations to ensure quality.
- Cost savings – Analyzing estimates against alternates and benchmarks helps you identify potential cost savings.
Conclusion: Streamline Your Project Estimating with EcoSys
Existing EcoSys customers are capitalizing upon our continual investment in standard product capability. They see our latest estimating capability as a path to removing inefficient, non-standard and potentially error ridden spreadsheet-based estimating solutions and instead moving closer to a single solution to manage the entire portfolio and project lifecycle. Download our on-demand webinar, “Connected Estimating with EcoSys” to learn more about the next piece for complete project lifecycle management.