Cost estimation software is developed for a wide variety of industries including construction, manufacturing, product development and software development. Cost modeling professionals are referred to as cost engineers, cost estimators or parametric analysts. The software is designed to help make business decisions by evaluating and predicting the costs associated with a given project. This can be as simple as a spreadsheet. Larger, more complex enterprises usually use software programs to do this. There are a wide variety of software programs on the market and if you are interested in evaluating the various features and benefits you might need to become familiar with some of the terms that you will find out there.

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Cost estimation models

Cost estimation models are mathematical algorithms used to estimate the costs of a project or product. These models are built in to cost estimation software. They can be either proprietary (must be purchased commercially) or standardized (available in texts). They are factored into business budgets and plans.

I recommend: For best practices, resources, programs, case studies and much more on cost estimation models go to DACS.

Parametric modeling

Parametric modeling is when a computer is used to design a replica of an object. More specifically it is a set of probability measures that are built into a cost estimation software program.

I recommend: PCMAG has a more detailed definition of this term.

Benchmark

This is a commonly used term that refers to the assessment of the relative performance of one thing when compared to another. In computing, benchmarks provide a method for comparing the performance of various systems across architectures. Software developers use benchmarks when building or upgrading cost estimation software.

I recommend: For another definition you can find one at BusinessDictionary.com.

Open Architecture Computing Environment

The aim of an open architecture computing environment or OACE is to have a standards based environment that is separate from software applications. More specifically it is a set of standards that allows software to be reused. Cost estimation software is often proprietary and so would not usually be part of an open architecture computing environment.

I recommend: For the answer to "What is OACE?" Go to internet.com.

Application programming interface

An application programming interface (API) is a set of protocols that is provided by operating system services and libraries to support and provide guidance in the building of computer applications. Software developers of cost estimation programs are familiar with API.

I recommend: For a quick definition see TechTarget.

Enterprise resource planning

Enterprise resource planning (ERP) is a software system that is company-wide and used to coordinate and manage information from shared databases. Cost estimation software is often built into an ERP.

I recommend: Need more information on ERP? You can find even more at Intuitive.

Most roundtable cost estimating is done in the construction contracting and management business, and if you want to simulate the collaborative experience of cost estimation without hiring a cost estimator, roundtable cost estimating software can be a cost-effective and simple solution.

When looking for cost estimation software, you will need to decide what type of project you need your cost estimation application to help you with, since different software programs are required for estimating different types of projects. Web-based programs can even eliminate the need for software if you prefer.

When shopping for cost estimation software, consider the following options:

1. Get cost estimation software for a range of industries or services;

2. Use a specialized cost estimation program for different types of construction projects;

3. Try a web-based cost estimation application for a quick and simple solution.

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Find a cost estimation program for your industry

While most cost estimation software is designed for use in the construction industry, some programs are also available for IT and general management purposes. If you work as a contractor for a variety of types of construction, look for a program that contains multi-purpose functions and services.

I recommend: SEER software is made for management, IT, hardware or electronics cost estimation projects and uses parametric modeling to estimate costs. U.S. Cost produces the Success cost estimation program line, with multiple functions, including estimations and the incorporation of estimations into scheduling.

Use a cost estimation program for specific types of construction

Different types of cost estimation software are produced for use in different branches of the construction industry. Commercial and residential construction are the two main types, but specialized programs also exist for public works projects and specialty design projects.

I recommend: Most cost estimation software providers offer several different programs. WinEstimator, for example, offers commercial, public works, residential or specialty project software. HCSS HeavyBid software, on the other hand, is broken up by stage rather than type of project.

Use a web-based cost estimation application for additional speed and convenience

If you don't want to worry about downloading or installing software programs, you can also use a cost estimation application that performs the same functions online. Web-based applications are helpful because they can be accessed from any computer and don't take up space in your computer's storage.

I recommend: Use BuilderHelper if you want to try a web-based cost estimation software-- it offers a free trial of services before you buy. ProCore also offers different web-based applications for commercial or residential estimation purposes.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you try roundtable cost estimating software and find that you need additional help coordinating interests in estimating, contact a cost estimator or estimating service to schedule a consultation. Some software providers also offer additional consultation services.

If you're in the construction business, there's a wealth of expert ratings, advice and reviews that can lead you to the right cost estimation software. Most packaged programs on the market are geared to contractors, and so is most of the information. Manufacturers, engineers and software developers also have plenty of resources they can turn to. Cost estimation software almost always specific to the industry; otherwise, it's features wouldn't be too helpful.

There are however, some cost estimation techniques that are applied broadly; roundtable cost estimating, for instance. Roundtable cost estimating software gathers input from every department involved in a project, from HR to IT, to get a complete cost outlook. As you read cost estimation software advice and ratings, look for:

1. What methods a program uses to make cost projections, and how accurate the developer claims to be.

2. How the program allows you to enter and retrieve data; if it's not user friendly, you won't have staff buy-in.

3. A program's data reporting methods; does the program display results in a spreadsheet, graph, list, statistics or all of the above?

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Get advice on choosing a cost estimation program for the construction industry

Before you start looking at specific programs, it helps to survey the job costing methods used in construction and read some tips to help you choose from the right software vendors and features.

I recommend: Construction Software Review has a great articles on what cost estimating software is capable of, and advice on choosing a vendor. How To Do Things has a list of questions to ask when choosing the a program. Industrial Cost Engineering outlines different estimation methods, their benefits and drawbacks, and accuracy.

Read reviews and ratings of cost estimation software for the construction industry

Many of the cost estimating software packages on the market were developed for contractors and builders. These programs help those in the construction industry estimate the costs of materials and labor, tools, insurance and licensing.

I recommend: Software Advice has a database of over a hundred cost estimation programs, searchable by function and trade, and reviews of each. TopTenReviews provides reviews, in addition to price information and ratings, for each product on its list. 2020software.com has reviews and demos of leading construction cost estimating programs.

Find software that's specific to your cost estimation application

There are many cost estimation programs developed for contractors and builders, but other industries rely on cost estimation software and methods as well. Engineers, facilities managers, software developers, plumbers and many other professionals use a cost estimation program tailored to their needs.

I recommend: The Software Technology Support Center has advice on choosing a program that can effectively estimate costs for large software development projects. The Federal Remediation Technologies Roundtable was established to share information about the cost of technologies used to clean up hazardous sites. NASA has a list of resources that may be helpful when choosing a cost estimation software; though some are geared to aeronautics, many apply to engineering projects in general.