Importance of Project Estimation

Though Project Estimation is now has become very important part for the Architecture, Engineering and Construction or AEC industry, many of us really don’t understand the importance of Project Estimation. Many think that project estimation is a waste of budget. But the fact is that it is a very important part of any construction project. If we view the project result, we find out that around 30% of projects are cancelled befire completion just because of it run out of money.

Effective project estimation is one of the most challenging and important activities in the AEC industry. Proper project planning and control is not possible without a sound and reliable estimate. The AEC industry suffers for the wrong estimation of any project badly. Under-estimating a project leads to under- staffing it, under scoping the quality assurance effort and setting too short schedule which resulting the loss of credibility as deadlines are missed. For those who figure on avoiding this situation by generously padding the estimate, over estimating a project can be just about as bad for the organization. If you give a project more resources than it really needs without sufficient scope controls it will use them. The project is then likely to cost more than it should, take longer to deliver than necessary and delay the use of your resources on the next project.

Project estimation is one of the aspects of business that requires some degree of consideration, because the succeeding phases of the project are dependent on the accuracy and the efficiency of this process. Project estimation provides details that would go beyond the capabilities of manual processing even with an army of accountants. Construction businesses require a specialized accounting software system with streamlined estimating facilities.

According to the statistic over 66% of projects are not delivered on time, on budget or to expected quality. This negatively impacts staff productivity, product quality, customer relationships and overall credibility. Good project estimation and planning goes beyond tools, techniques and processes. It’s also about the right attitude, understanding and mutual expectation – not just from the Architect, Engineers and Contractors but also from senior management. When we understand together what can be done, what has been done, and what is being put before us, we can successfully plan projects to make them more predictable.

In this way we find out that why project estimation is important for the AEC industry. Not only to win the bid, accurate project estimation is helpful to finish the project within budget and time frame that increase credibility as well as profit of them.