Jeremy Storey of Crest Software discusses the merits of integrated Project Planning and Estimating

Time is a scarce resource. One of the ways to manage time and other available resources is through an understanding of Project Planning as a management tool. The increasingly sophisticated methods of contractual claim preparation and analysis have placed even greater importance upon the project schedule. Comprehensive and accurate schedule information is therefore essential to the management of a project and the quantification of possible delays and disruption.

Critical to this premise is a growing awareness of the need to integrate the Estimating and Project Planning processes, so that the effect of the estimator's resource selection and production rates on the Contract Programme can be evaluated both at tender stage and during the contract.

Care in the preparation of the initial estimate and programme are essential to ensuring success. During this stage the contract budget is derived from the estimate. This forecasts the cost and value based on quantity, quality, time, location, sequence and resource availability.

A project is a "one-off" and is liable to change throughout its life with responsibility for the effective management of these changes resting with the site management team. Accurate project schedule information is therefore essential when comparing planned against actual performance. Without a forecast cost plan with which to compare performance, management control will be deficient.

Let's look at the two parts of the equation.

The Estimating function

Accurate estimating is vital to profit in construction. An important aspect of the estimator's work is the identification of areas of risk for consideration by management at final review. By using computer aided estimating and tendering, an estimator can price a bid swiftly, increasing the time available to identify the critical elements of a tender.

Computer aided estimating enables the accurate analysis of costs together with the ability to make changes instantly delivering:

accurate, consistent and well documented rate build-ups
evaluation of alternative quantities and materials
comprehensive subcontract and supplier comparisons
easy spread of margin across items, by type or cost group
standardized management information reports.

The Project Planning function

This is the organizing, controlling and monitoring of time, money and resources. A computer based planning system optimizes the use of time and resources by :

managing the workload
predicting cash flow & controlling spend
assessing progress and recording cause and effect
monitoring performance
communicating with the project team
reviewing progress and taking action.

Bringing the two together

Integration of both functions means that tender allowances from the estimate are incorporated into the contract programme.

A project schedule derived in this way provides continuity across both functions and therefore avoids duplication of effort as well as inconsistencies between estimate and programme.

Inadequate explanation of estimating and planning assumptions is a common problem. The resources used and the logic applied can therefore be difficult to identify and consequently resources required and the management of variations are subject to interpretation. This leaves the project vulnerable with regard to current and final contract valuation. Thus the benefits from integrated estimating and project planning include:

no part of the tender is inadvertently excluded
estimated resourced BQ rates become part of the programme
BQ Items can be "rolled up" into schedule activities
resource levelling by rescheduling over-allocated resources to resolve conflicts
risk analysis identifying the most likely delays and cost overruns.
earned value analysis providing "early warning" signals of cost problems
cash flow based on committed cost and revenue
production rate outputs required to achieve the programme
buying schedule based on cumulative or monthly material requirements
impact of variations on workload and their knock-on effect.

Putting the theory into practice

Here's some of the functions that a truly integrated project planning and estimating tool should be able to perform:

Continuous correlation between BQ and Project Schedule
The priced BQ items will be permanently retained in the scheduling software to provide an audit trail of the transition from estimate to programme.

Distinguishing between production and non-production resources
A production resource (normally labour or plant) has a rate of production associated with it when assigned to a Bill Item. When this is related to the quantity, durations can be calculated in time units which will be recognised when exported to the project planning tool, dictating the activity duration and hence the length of the bar.

Synchronised working calendar data
Certain works, typically rail or highway maintenance, are not likely to have common working calendars for all activities. A project planning tool should allow the creation of an unlimited number of such calendars, each with its own name. If the estimating tool has the same list of calendars it allows the estimator to associate any one of these to each BoQ item should they differ from the project schedule.

Common resource quantification
The estimating tool allows the user to specify the number of each production resource used. When exported to project planning, resource availability is derived from these values so that resource levelling can be carried out immediately.

Complementary BQ and Work Breakdown structures
The Bill of Quantities is managed for example by a tree structure which approximates to the Work Breakdown Structure, facilitating the automatic summarisation of BoQ items into planning activities. Similarly, the estimating resource file must employ the same hierarchy as the project planning tool, meaning resources are managed and summarised in a common and complementary way.

Instant revenue export
The revenue from each item in the estimate must be easily exported so that Cash Flow forecasts can be generated from project planning at any stage.

Ready project consolidation to facilitate rescheduling
A project planning tool should instantly consolidate separate projects using a common resource pool. This allows the impact of a new estimate on existing commitments to be assessed and rescheduling of either to be conveniently undertaken.

Crest Software provides an integrated estimating and planning solution based on their already well established and accepted Valesco estimating and CS Project planning tools. Here's what their customers say about the benefits of integrating the Estimating and Project Planning function...

Warren Glover, Business Development Manager, Lindum Construction

"The Crest system will make significant improvements in the quality of our tendering, programming and evaluation processes. We will have enhanced capabilities which will improve accuracy and therefore make us more competitive.

The comprehensive subcontractor comparison tool provides up-to-date pricing data automatically to estimating and QS sections post contract. This means the elimination of duplication of work carried out at estimating stage and the earliest adoption by estimating of any price advantage secured by buying.

The automated link between estimating and programme production improves the accuracy and reduces the preparation time significantly. The ability to see complete resource allocation increases the effectiveness of the programmes themselves with the consequent enhancement in site efficiency."

Justin Williams, Managing Director, Westwood Contractors Limited

"We were using estimating and project management software which promised to link together using MPX file format but full integration was never really there. When we made the initial decision to switch to Crest software's solution, we knew the integration would be better but we didn't realise the full potential of the software and its ability to integrate to such a detailed extent until we actually started using it. The detail is not confusing but informative.

Being a small company going through a period of intense growth, we currently do not have the need for full time planners and the software makes it easy for our Senior Contracts Manager to take on this role. In addition to its traditional job, the software assists us in our resourcing requirements. It literally tells us how many operatives we need on each day and what tasks they should be doing."

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