What is parametric estimating?
In the Parametric Estimating Handbook, the International Cost Estimating and Analysis Association (ICEAA) describe the term ‘Parametric estimating’ as
“A technique that develops cost estimates based upon the examination and validation of the relationships which exist between a project’s technical, programmatic, and cost characteristics as well as the resources consumed during its development, manufacture, maintenance and/or modification.” (Source: International Cost Estimating and Analysis Association (ICEAA) – ‘Parametric Estimating Handbook’: www.iceaaonline.org)
In very simple terms, you can set up “models” or “template projects” that take historical information as the input. Based on assumptions made, you can duplicate that information for each new estimate.
Our software can help you extrapolate the information to compute the overall cost estimates. By simply adjusting variables/parameters, you can instantly see the impact on the price.
If you produce estimates at the early or concept stages of the project life-cycle, then you may wish to consider producing a parametric model.
Why user parametric costing tools?
Parametric estimates are brilliant at the early and concept stages of the project. In fact, the Parametric Estimating Handbook* says that “Early costing cannot be done effectively any other way”. Parametric costing tools enable you to produce an estimate for a project in a matter of minutes rather than weeks.
It’s not only the speed you can dramatically increase, but parametric costing tools/models also have the potential to increase consistency and accuracy of estimates at the early and concept stage of a project’s lifecycle.
Use Case
National Highways (formerly Highways England), decided to put a system in place that was designed to deliver more capacity improvements for less money, improve sustainability, and enable them to pro-actively manage and operate the road network.
We enthusiastically accepted their challenge and constructed a sophisticated parametric cost model for the Managed Motorways proposals using the “off-the-shelf” functionality within Benchmark Estimating. Data collection sheets for each road link were imported into Benchmark Estimating's Managed Motorway cost model with a single click.
The model output a detailed schedule of items for each link with resource build-ups using the latest rate data stored within the Benchmark Professional cost data libraries.
The result? Here are just some of the benefits that the UK’s road authority experienced:
· Substantial time savings in producing cost estimates
· Quick re-estimation of entire schemes due to late design changes
· Easy building-up of rates using up-to-date libraries
· Clear and well-documented basis of each cost estimate
· Quick ruling out of unviable options, saving design development time and cost
· Comprehensive and consistent cost estimates
· Capturing of expert estimating knowledge
Thanks to the parametric cost model in Benchmark Estimating, National Highways was able to produce sixty-four estimates in a six-week period, an impossible task using conventional estimating methods.
