Project pricing and estimating are an essential part of any project-based business. It helps to ensure the accuracy of bidding projects to be completed on time and within budget. But with the ever-changing nature of the business world, it can be challenging to predict a project's cost accurately. This is where intelligent project pricing and estimating comes in.
Intelligent project pricing and estimating (iPE) is a method of predicting the cost of a project based on data gathered from past projects, current market conditions, and other factors. And then pricing the project effectively, recognizing that 80% of a project’s margin is determined as it is estimated and priced. By analyzing this data, organizations can make more informed project decisions and better manage their budgets. This type of estimating, and pricing for commercial projects, can help businesses save time and money by avoiding costly mistakes or delays in completing projects.
The Benefits of Intelligent Project Pricing & Estimating
There are many benefits to using intelligent project pricing and estimating. First, it allows businesses to make more accurate predictions about the cost of a project. By gathering data from past projects, current market conditions, and subject matter experts in a structured way, companies can better understand what their costs will be for a given project. This helps them budget more effectively for future projects and avoid cost overruns in completing them.
Second, intelligent project pricing and estimating help businesses save time by reducing the amount of manual work required for each estimate or proposal. By automating the process, companies can quickly generate accurate estimates tailored to their specific needs without spending hours manually entering data into spreadsheets or project plans.
Additionally, intelligent project pricing and estimating (iPE) enables collaboration across the company to leverage the expertise and inputs from every department, including product, program management, sales, engineering, finance, and more. Large proposals are complex and require information from different people, sometimes across the globe. With an iPE strategy and system in place, companies can automate the collection of inputs, reducing errors and inaccuracies.
With iPE, managing risk, issues, and opportunities is much easier. Companies can anticipate what could happen, determine the weighted cost impact or risk-adjusted cost, and plan for steps to reduce the likelihood of that outcome. The problem is that the person who sees the risk coming and who knows what to do about it is often different. So leveraging an iPE strategy enables companies to consider risks early in the proposal process, automatically calculate their risk-adjusted cost, and factor in these risks when negotiating terms.
Finally, intelligent project pricing and estimating allow businesses to stay competitive in today's market by providing up-to-date information about their competitors' prices and services. This information can help them adjust their prices accordingly, so they remain competitive while making a profit on each project they complete.
How Does Intelligent Project Pricing & Estimating Work?
Intelligent project pricing and estimating works by gathering data from past projects and current market conditions, such as similar previous estimates, historical time records for past projects, supply/demand trends, commodity price indexes, competitor prices, etc., then using this data to create an accurate estimate for the new tasks. The process typically involves collecting data from multiple sources, such as customer surveys, rate tables, questionnaires, financial statements, and of course resource plans, then analyzing this data using specialized software programs designed specifically for this purpose.
Once all the necessary data has been collected and analyzed, the software will generate an estimated cost and recommended price based on this information, which businesses can use when creating proposals or bids for new projects or contracts. This process helps ensure that companies have an accurate understanding of their costs before committing to any new venture so they can make informed decisions about how much they should charge for each job or contract they take on.
How Can You Automate the Process of Generating Estimates & Proposals?
Intelligent project pricing & estimating is an invaluable tool for any business looking to accurately predict a project's cost while staying competitive in today's market. By gathering data from past projects and current market conditions, such as supply/demand trends, competitor prices, etc., businesses can make more informed decisions about their budgets while also saving time by automating the process of generating estimates or proposals for new jobs or contracts.
Twenty5's Intelligent Platform for Proposal Pricing & Estimating (iPE) for project-centric businesses running SAP® combines the latest enterprise-grade web user interface with end-to-end integration to SAP ERP, PLM, Primavera, Salesforce, MS-Dynamics, Excel, and other apps for costing and pricing - backed by the power of SAP HANA's® predictive analytics. Reach out for a demo or to learn more about how our iPE solution can help you automate the entire proposal management process so that you can take advantage of all benefits of having intelligent project pricing and estimating and bid with confidence every time.