The use of outsourcing has been on the rise for the past few decades as a way of conducting business. With the advancement in technology and expansion of globalization, more and more business organizations are seeking ways to outsource some of their business activities to outside suppliers and independent workers instead of internal control.
An industry that is increasingly being outsourced is electrical estimating services. Electrical Estimating Outsourcing refers to the process of determining the time, material, and human resources needed for electrical works. This is very important for electrical contractors to accurately price potential projects. However, generating detailed electrical estimates may prove to be difficult, a long process, and might need specialized skills. This makes electrical estimating a good candidate for outsourcing.
In this blog post, we will discuss the advantages and disadvantages of outsourcing electrical estimating so that you can make the right decision about your electrical contracting company.
The Advantages That Can Be Derived From Outsourcing Electrical Estimating
There are several key reasons why can be beneficial:
Cost Savings
The first and foremost benefit of outsourcing electrical estimating is the opportunity to acquire outside skills at a relatively lower cost. Maintaining these skills in-house would require the employment of full-time estimators with relatively high salaries and other incentives. It means that you can outsource at a cheaper price per estimate and only when the estimates are to be made.
Increased Estimating Capacity
As a rule of thumb, if you do not operate an electrical company that generates a massive amount of work, you probably do not have enough full-time estimating work. Outsourcing helps in reaching the goal of having estimates done within a shorter period especially when the company is busy. This increased bandwidth capability can enable you to accept more jobs.
Expertise and Accuracy
Well-established electrical estimating firms employ sophisticated software, have reliable data at their disposal, and deal with a large number of material suppliers. This can translate to more accurate bid prices compared to estimates that may be developed by less experienced administrative personnel. Accurate bidding leads to improved profit margins on the projects that are awarded to the contractor.
The Negative Impact Of Outsourcing Electrical Estimating
While outsourced electrical estimating has some clear advantages, there are also some potential downsides to consider:
Loss of Control
A major disadvantage of outsourcing electrical estimating is that it results in a reduction in the level of monitoring and supervision of the activity. It could be the case of lesser controls in terms of visibility of specific details or the possibility of being able to identify errors. However, a good outsourcing provider will try and build confidence in the service being outsourced hence being highly transparent and receptive.
Communication Challenges
Sharing project descriptions and requirements may be especially challenging when dealing with a third-party estimator. To avoid such misunderstandings, your expectations must first of all be spelled out clearly.
Hidden Costs
Of course, hiring third-party Concrete Estimating Services can be beneficial, as it seems to be cheaper at the beginning. These are costs that go into transmitting documents, site visits for evaluations, costs accrued to technology, and costs that come with errors or revisions.
Security Concerns
Every time data is shared across the business with third parties, some risks accompany hacking, leakage, and theft of information. You must always have confidence in any firm that you hire for outsourcing your electrical estimating.
When Does Outsourcing Electrical Estimating Make Sense?
Having looked at the benefits and drawbacks, when can you consider outsourcing some or all of electrical estimating? Here are some of the best scenarios:
- Increased Estimating Workload – Outsourcing can enable an organization to manage a constantly increasing workload of estimating without reaching the point of hiring more employees. This can range from fluctuations in consumption due to seasonal variations.
- Expertise Required in Particular Projects – In some cases or specific projects, outsourcing is reasonable especially if the job or project is complicated or if it involves new technologies. This makes the bids more accurate because they possess greater experience.
- Current Staff Lacks Skills – In the case where the current staff at your business does not possess the necessary electrical estimating skills, outsourcing is a quick and convenient short-term fix while the staff is being trained.
- Wish to Release Internal Capacity – With outsourcing estimating, your key personnel do not have to waste time on estimating as they can concentrate on important value-adding activities such as bidding, project delivery, and client management.
In summary, when managed effectively, outsourcing electrical estimating offers advantages in terms of time, cost, and quality when compared with standard in-house estimating.
Selecting the Appropriate Outsourcing Vendor
To successfully outsource one or all of the electrical estimating for your contracting business, it is imperative to do the following: When it comes to Requirements, it should be clear and precise on how to proceed with the engagement to prevent future misunderstandings.
Here are some tips on choosing the right outsourcing partner:
- Get professionals in your area of specialization – Look for firms that specialize in electric estimating services other than general contractors.
- Request for samples of previous work – It is proper to ask your potential electrical estimator for 2-3 samples of the previous electrical estimates they did to check their work, structure, and precision.
- Get references and read reviews – Ask the business for references from former clients and read reviews online to ensure customer satisfaction.
- Technology security – Find out how their estimating software is superior, how they protect data, use of non-disclosure agreements, and backup procedures.
- Outsourcing firms – Identify 3-4 outsourcing companies and request quotes for their services, including their rates and payment structure.
- Contact the key personnel – Speak to the person you are most likely to deal with in the firm to build some level of familiarity.
By following such tips, you will be able to find a good, accurate, and affordable partner for outsourcing your electrical estimating needs.
Conclusion
The trend of outsourcing particular business activities that belong to the non-core competence area is gradually expanding across various industries, electrical contracting inclusive. Thus, electrical estimating is one of those areas in which external expertise could be effective, although it contains certain intrinsic dangers.
