Estimating is not Accounting.
The problem: players, coaches and journalists...
At any professional sports event there are players, coaches and sports reporters. The player is focused on production. The coach works with the player to improve performance; the journalists record and report what happened. All impact the game in different ways, and without any one of them, attendance and ticket sales may drop.
Business software is specialized in the same way. Some programs do production work, like CNC systems that run milling machines. Quality control and accounting systems record activity. Other software tools should help sales teams generating estimates and orders at their peak of performance. Without any one of these key components the business can't function as well, efficiency goes down and costs go up.
The lack of specialized estimating systems has led to the use of other programs, such as home-made spreadsheets and converted accounting systems, to do estimates. This is exactly like hiring reporters to coach the players during a game. Even a good journalist doesn't make a very good coach. The same is true with accounting software and estimating. To make these systems work, users have supply the decisions and judgement calls that should be handled by expert systems, the same way a coach knows exactly how to support a player's best performance.
Obsolete processes...
The bidding process can make or break any business, yet estimating software is still hard to find and under-used, leaving most shops with obsolete methods. Sales process costs are higher than they should be, and the old pricing methods are no longer competitive. There is a serious need for automation and integration at the point of sale.
At Visual Pricing we saw this need in the early 1990's. Our original idea was to create software that would bring precision and speed to the bidding process, cutting turnaround time. This would also allow owners to delegate estimating tasks with less risk. We have accomplished this in shop after shop since releasing our first application in 1992.
Repetition doesn't help...
Estimators should not have to do things over and over again that could be done by the computer. For example, they should not ever have to:
- calculate area when they already have entered measurements;
- calculate the length of edges applied to a top;
- calculate upcharges for substrate upgrades;
- remember to add seams as specified by the manufacturer;
- apply across-the-board percentage multipliers as if one size fits all.
- look up substitute items like seam-mounted sinks.
There are dozens of other operations that should be done in the background, by the computer. And estimators should never have to do all these operations over again when the customer wants a bid in an alternate material, or just a different set of options; yet, with most estimating systems, this is exactly what they must do, time after time, wasting time, risking mistakes and losing profitability. But it doesn't stop here; the situation is often even worse.
Paving the cow paths...
Pricing methods that worked a decade ago are no longer competitive. Compromises that were once necessary for speed at the cost of precision should never be allowed into the modern pricing structure, but we have seen many a spreadsheet that simply duplicates the familiar operations that had been handed down from years past. Accounting systems used for estimtating may have the same drawbacks, if owners transfer their pricing directly into the accounting system's chart of accounts. Every day fabrication shops give away materials and even pay customers to accept premium work, unaware that their estimating system is draining profits and obscuring unnecessary costs.
Streamlining the bidding process...
The biggest problem has been that estimating itself must be re-designed, now that we have computers. It isn't just that these machines make the process faster; that speed is an opportunity to trade back all those old compromises, and perform all the operations that were too time-consuming in the past. It is time to take the guesswork out of the process.
Many of the steps required by most estimating systems aren't necessary in Visual Pricing, because a drawing already contains all the information needed to do the job. In effect, the drawing replaces the traditional manual data-entry system, elimintating the need for the dozens of user-entry fields normally required. In this way the drawing system provides very significant leverage.
In addition, the database management component applies techniques not available in data-entry systems to create unique assemblies on the fly. This radically reduces time, errors and inconsistencies. In this system, instead of cutting corners to save time, we do things right, faster.
Visual Pricing, the software...
The work of over a decade, Visual Pricing provides a drawing interface combined with a comprehensive estimating system that pulls all the labor-intensive calculations into the computer, leaving the user free to pay attention to the sales conversation. Both seller and buyer can see the product represented in a scale drawing, with pricing integrated into the same document. This is the promise of graphical computers known as WYSIWYG, "What You See Is What You Get."
Visual Pricing is capable of handling remote pricing in such a way that estimates arrive electronically from the point of sale. This eliminates much of the other repetitive motion traditionally involved in the sales process, motion that was not dealt with by fax machines and calculators, and still was not removed by better, faster accounting systems. Speeding up that process shortens purchase decisions, ramping up throughput.
Integration with other office software deals effectively with accounting issues. There are a great many very good accounting and inventory systems in use, and it is better to integrate with them as a front end data source than to reinvent the wheel. Visual Pricing contains gateways to accounting programs that may be activated (charged separately) to automate the flow of data through the business process. These use standard protocols now shipped with nearly all accounting packages based on what is called the Document Object Model, or DOM. When properly implemented as a background process, there should be no need for operators even to know that posted jobs are sent to an accounting system.
Since we now provide self-upgrading functions, the Visual Pricing suite of estimating tools is licensed on a scale-based distribution model, reducing individual costs. Our product and service fees have been adjusted to reflect these technological advances. We believe deploying the Visual Pricing estimating system in the retail network can reduce costs and errors, and increase sales dramatically, making it an attractive addition to the Fabricator's toolbox.
Visual Pricing™ 2.0 is now available. Call (802) 368 2809 for Evaluation copy
Email us!
Copyright 2004
Peter Barus all rights reserved