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Cost-Effectiveness Analysis of Outsource Estimating

outsource estimating

When it comes to outsource estimating, there are many advantages to using this type of service. Some of these include time savings, cost-effectiveness, and the ability to explore new markets. You can also expect to avoid liability.


A cost-effectiveness analysis of outsourcing estimating services can help you determine the benefits and potential savings that you can expect from this type of service. By understanding the benefits and costs of estimating, you can identify what processes you can automate and which you should keep in-house.

The cost of outsourcing estimating services is generally lower than hiring a full-time employee. Also, by using an estimation provider, you will reduce the stress of changing prices and material rates. This can allow you to concentrate on your core competencies while still ensuring timely delivery of estimates.

You should first outline your strategy, which will allow you to clearly communicate your objectives and goals with the vendor. An accurate cost-benefit analysis will ensure that you achieve your goals and will help you calculate a return on investment.

Outsourcing estimating services can reduce the time and effort required to prepare and review bids. In addition, an estimating partner has the resources to maintain a database of suppliers and specialized service providers. These companies can also provide quick bills of material, which increases your chances of winning more projects.

Getting an estimate from an estimating company can be beneficial for contractors who need to manage a large number of projects. However, outsourcing is not always the most cost-effective solution. While you may benefit from outsourcing, you should also carefully consider the risks associated with this decision. Some companies find that outsourced work is not of high quality. It can also lead to delays or misunderstandings.

One method to determine the ROI of outsourcing is to take a threshold margin approach. For example, if you save 50% on data entry tasks, you can add another 20-30% to your marketing budget.

To determine the potential savings, you need to compare your in-house costs to your total outsourcing costs. For example, if your in-house costs are $1500 a month, subtract that from the cost of outsourcing.

After calculating your total savings, you should then calculate the difference. If you find that you save more money by outsourcing than you spend in-house, you can move forward with your decision.


Outsourcing estimating can save your company money. It can also change the way you do business. Some of the benefits of outsourcing include saving time, avoiding the cost of a full-time estimator, and lowering the risk of mistakes.

The best way to determine if you should outsource your estimating is to analyze your current process. This includes how much time you spend on non-revenue producing activities. Those activities include writing contracts, reviewing requests for proposals, and handling disputes. Keeping these costs in house can be costly. You should also calculate the savings. For example, if you spend $1 million per year on your estimating process, and you outsource it, you could save $400,000 each year.

Performing the more complicated task of calculating takeoffs will require an intense amount of focus. Estimating is a process that can be interrupted by phone calls, emails, and even fires at the job site. Taking 45 minutes to resume your work can mean losing out on a large amount of money.

In addition to saving time, you may be able to outsource the more mundane tasks, such as updating specifications. These changes will not put your project over budget. However, it is crucial to communicate the details of the changes to your estimator. Getting this right can mean the difference between winning the bid and getting the order.

The most important thing to remember is that time is money. If you aren’t using it wisely, you’re wasting it. Time is also the most valuable asset in any business. When you outsource estimating, you can devote more of your resources to growing your business.

Outsourcing estimation is not for everyone, but if you are looking to save money, time, and reduce the risk of making errors, it may be worth the investment. Fortunately, there are many companies that provide these services. Choose one that will fit your specific needs. Make sure to choose a reliable and user-friendly platform.

The cost of hiring a full-time estimator is not cheap. An external service will give you access to the same or better quality of work, but will save you the time, headaches, and stress of managing an in-house estimating team.