Best Practices for AEC Project Estimating and Risk Management

In the highly competitive AEC marketplace, knowing and anticipating a project’s expenses correctly provides a definite advantage when competing for a contract. But, even in the best of circumstances, cost estimating is complicated and there are myriad risks and uncertainties to consider.

Delivering high-quality cost estimates depends heavily on the quality of data, for example, historical databases, comprehensive project plans, and standard work break down structures make it easier to make comparisons to similar projects. In most cases, the better the data, the better the resulting estimate will be. But you should always be on the lookout for common items that significantly increase risk in the planning and budgeting phase of projects, such as:

  • Faulty assumptions
  • Lack of supporting documentation
  • No historical data for similar projects or comparison
  • Out-of-date data
  • Too much “grey area” in terms of the time required for the project
  • Too much emphasis on precision vs. accuracy

These challenges often lead to underestimating project costs, thus resulting in significant losses or project shortcuts to mitigate losses.

With all of the competition out there, service providers have a need for cash revenue quickly, which trumps the requirement of making sure they’ll profit in the long run off their shot-gun estimate. By identifying and overcoming the common estimating and budgeting issues, service providers can bypass the underestimating barriers and increase estimating accuracy in the future.

As a project progresses, it is important to keep a pulse on how the estimate is holding up. It is important to keep abreast of whether there is significant difference between estimated cost to complete and budget for remaining work, whether there are work phases/tasks with no budget left and if there is frequent allocation of contingency reserve for newly identified in-scope effort.

With the best of these circumstances, cost estimating is difficult. It requires both science and judgment. If you need assistance with improving your estimating processes, download our whitepaper, AEC Project Estimating and Risk Management to learn about best practices, or contact us today to help implement the right estimating and planning solutions to keep your projects on track.

SBS Group and MiTek Systems to Showcase Sapphire Build Home Builder Solution at 2015 IBS Show

Edison, New Jersey – December 30, 2014 – SBS Group, a Microsoft Gold Partner and technology consulting firm, and MiTek, a Berkshire Hathaway company, will be teaming up at this year’s NAHB International Builders’ Show (IBS) to demonstrate their Sapphire Build and Microsoft Dynamics software solutions for the homebuilding industry. The Sapphire Build/Dynamics SL solution is truly the only fully integrated operational and financial management system for residential homebuilders. The solution provides full collaboration between builders and their trade partners, homebuyers, and the field. SBS Group has been working with Sapphire Build since 2008 and has built a national network of clients who build in excess of 10,000 homes per year.  Our client, American West Development from Las Vegas, Nevada will be on hand to present details of their implementation of Microsoft Dynamics SL and the business benefits the company has seen.

Demos will highlight the integrations between Sapphire Build and Microsoft Dynamics SL and how companies have successfully utilized the solution. Be sure to check out the demonstrations at booth C3056 and our drawings for a new Lenovo tablet PC. We will also be announcing a brand new capital leasing program designed for builders that will allow the total cost of ownership to be spread over time in order to minimize the up-front investment.

IBS will be held January 20-26, 2015 at the Las Vegas Convention Center. The 2015 show will again feature a partnership between the National Association of Home Builders (NAHB) and the National Kitchen & Bath Association (NKBA) hosting the second annual Design & Construction Week. The IBS is the largest annual light construction show in the world. During IBS 2014, more than 75,000 attendees had access to more than 1,700 combined exhibit s across two floors.

“Our ongoing partnership with MiTek strengthens our depth and expertise in the residential home builder market and our mutual ability to bring valuable technology solutions to the market”, stated James R. Bowman, President and CEO of SBS Group.

About SBS Group

Working with clients, not just for them, SBS Group enables companies to go from “what is” to “what’s possible” through individualized business technology solutions and best practices.  Our industry centric focus and technical excellence combined with our delivery methodology has our clients’ business at its core – helping them reach their destination quickly and efficiently.  We bring fresh ideas to advance their business, help them navigate through alternative solutions, and provide support with an award-winning team of professionals.  Feedback from our clients reinforces our unique partnering approach and helps us maintain one of the best client retention rates in our industry.

SBS Group is a national Microsoft master VAR (Value Added Reseller) and Gold Certified Partner.  With more than 25 years of experience, we have been recognized as a Microsoft Partner of the Year (Microsoft Dynamics SL), a Microsoft Inner Circle Member and a Microsoft President’s Club Member. The company is headquartered in Edison, New Jersey and operates 37 other offices across the United States. For more information, please visit SBS Group’s website at www.sbsgroupusa.com.  Follow us on Twitter at http://twitter.com/sbsgroup and find us on Facebook at http://www.facebook.com/SBSGroupUSA.

SBS Group and MiTek to Present Microsoft AX at 2014 IBS Show

Edison, New Jersey – January 21, 2014 – SBS Group and MiTek, a Berkshire Hathaway company, will be teaming up at this year’s International Builders’ Show (IBS) to demonstrate Sapphire Build and Microsoft Dynamics software solutions. They will be highlighting the integrations between Sapphire Build and Microsoft Dynamics SL as well as presenting Microsoft Dynamics AX. SBS Group, a leading technology consulting firm, has been working with Sapphire Build since 2008 and has built a national network of clients who build in excess of 8,000 homes per year.

 

IBS will be held February 4th-6th at the Las Vegas Convention Center. An exciting new addition to this year’s show is a partnership between the National Association of Home Builders (NAHB) and the National Kitchen & Bath Association (NKBA) who will host the first annual Design & Construction Week. Both the International Builder’s Show and the Kitchen & Bath Industry Show will take place at the convention center as well as the International Window Coverings Expo. The IBS is the largest annual light construction show in the world and showcases the latest products and solutions from 1,500 companies. It is anticipated that this year attendance will surpass 75,000 making this year’s event the largest in the shows history.

 

“We’re excited to be teaming up with the SBS Group at this year’s show. Over the years we’ve partnered together on many successful builder implementations.  The SBS Group truly brings a unique understanding of the residential builder’s financial operations,” explained Brian McCormick, Director, Residential Supply Chain, MiTek.

 

SBS Group and MiTek will be demonstrating how to utilize the software solutions at booth C3056. Be sure to check out the demonstration and you will be entered into a drawing for a new Xbox One.

About SBS Group

Working with clients, not just for them, SBS Group enables companies to go from “what is” to “what’s possible” through individualized business technology solutions and best practices.  Our industry centric focus and technical excellence combined with our delivery methodology has our clients’ business at its core – helping them reach their destination quickly and efficiently.  We bring fresh ideas to advance their business, help them navigate through alternative solutions, and provide support with an award-winning team of professionals.  Feedback from our clients reinforces our unique partnering approach and helps us maintain one of the best client retention rates in our industry.

SBS Group is a national Microsoft master VAR (Value Added Reseller) and Gold Certified Partner.  Over the past 25 years, we have been recognized as a Microsoft Partner of the Year (Microsoft Dynamics SL), a Microsoft Inner Circle Member and a Microsoft President’s Club Member. The company is headquartered in Edison, New Jersey and operates 37 other offices across the United States. For more information, please visit SBS Group’s website at www.sbsgroupusa.com.  Follow us on Twitter at http://twitter.com/sbsgroup and find us on Facebook at http://www.facebook.com/SBSGroupUSA.

About MiTek

MiTek, a subsidiary of Berkshire Hathaway, Inc., is the world’s leading supplier of software, products and services to the building components industry. Through its technological leadership and wide range of products and services, MiTek delivers progressive new solutions to the residential, commercial, industrial and institutional construction markets on six continents. Visit http://www.mitek-us.com for more information on MiTek or http://www.berkshirehathaway.com to learn about Berkshire Hathaway (NYSE: BRK-A, NYSE: BRK-B)

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Media Contact:

Kimberly A. Kohlhepp

732.476.5909

kkohlhepp@sbsgroupusa.com

Buyer Confidence Bounces Back – Selling Market Slow

While a Redfin Q4 housing-confidence survey determined that only 28% of participants say now is a ‘Good Time’ to buy a home in their neighborhood, this is still an increase from Q3, where a mere 24% of participants answered with the same result. This is still a large drop off from the 2012 Q4 survey, where nearly 50% of respondents believed it was a good time to buy a home in their neighborhood.

Another positive sign for buyers was the drop in respondents who believe it is a ‘Bad Time’ to buy a home in their neighborhood, with only 10% agreeing in Q4, dropping from 14% in Q3. This was the lowest response rate since Q4 2012, when 5% of respondents agreed. Rounding out the survey, 58% said it was an ‘OK Time’ to buy a house, while 4% were unsure, keeping on pace with the Q3 responses of 59% and 3%, respectively.

If you’re looking to sell, Q4 is not the time to do so. Only 46% of respondents agreed that it was a good time to sell, dropping off from 63% in Q3 and the 2013 peak of 66% in Q2. While there was an 8% increase in those responding that is was an ‘OK Time’ to sell (up to 37% from 29% in Q3), those claiming it is a bad time to sell doubled from 5% in Q3 to 10% in Q4.

For the fifth consecutive quarter, Low Inventory is the biggest concern for buyers, with 60% of respondents unsatisfied with the amount of homes on the market. Following closely are Rising Prices (52%) and Rising Mortgage Rates (41%).

The housing marketing looks quite mixed, with buyers slowly trending in a favorable manner, but still not at an ideal position. Sellers are rapidly losing confidence from a strong Q2 and Q3. Looking forward, homebuilders are caught in a rough spot. In fact, award-winning editorial director for the Residential Construction Group, John McManus, is boldly predicting that 2014 will be a ‘fend for yourself’ year. According to McManus “…what will characterize the year ahead will be a ‘you’re on your own, don’t ask me for help’ mode. If you can survive, thrive, and dominate next year, there’s a good little stretch awaiting in the years after that.”

It is crucial for homebuilders to have a strong and detailed plan heading into an unknown 2014. The housing market is constantly changing and unfortunately without many warning signs. SBS Group has a team of homebuilding industry experts that can help analyze your organization with a variety of solutions that can be tailored to your needs. Contact us for more information.

The Software Selection Process – Part 2

Making Your Decision 

Now that we’ve established the 7 Benefits of Construction Software, it’s time to make a decision. Here are the 8 steps to take to determine which software solution best meets the needs and capabilities of your organization.

  1. Internal Assessment: Talk to the people that will be implementing, using, and maintaining your system. Will the accounting department need any additional add-ons? Does the IT team understand the product? Will they be able to offer any additional support? Take an organization pulse to see what benefits hold the greatest value.
  2. Industry Assessment: Talk to people in the industry that have similar needs in their organization. What are some of the greatest current and upcoming challenges? How can a software system help differentiate yourself from the competition?
  3. Research: Do a quick search to develop a list of products that will help solve your problems. Establish criteria that must be met, along with some flexible options that could help, if implemented at the right price.
  4. Meet Vendors: Talk with the people selling the product. Set up a few demos and see how each software system works. Ask as many questions as you need to get a clear picture.
  5. Analyze: After speaking with vendors and viewing demos, determine what products meet your organization’s criteria. Follow up with any additional questions and discuss with your team.
  6. Purchase: Review the costs of implementation, training, software, licensing, and maintenance.
  7. Implementation: Create an implementation strategy to keep your team organized and at budget. Include specific responsibilities, along with timelines and milestone goals.
  8. Roll Out: Take the necessary time to train your employees on the new solution.

With the time and cost of implementing the right technology investment, it is crucial to take the extra time and ensure you are making the best decision for your organization. The right technology system will provide immense value and longevity, while one mistake can add increased costs and headaches for years.

SBS Group has over 1600 Dynamics ERP clients and can provide construction consultants to help get your organization started in the selection process. For more information, you can contact us and see what the Dynamics products can do in our Media Center.

 

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