“In today’s difficult market, where almost everything is being bid, a decent amount of competition is prevalent. As an estimator, you’re tasked with three goals: Cover all costs (don’t miss anything), make a good profit, and win the project…. If you’re good, you typically win only one in every four jobs. In today’s market it may be more like one in six or 10.”—David Lahey, CTS, director of estimating, Conference Technologies
Recently, a veteran AV integration company, with offices throughout North America, conducted a little experiment. The company’s management wanted to learn more about how its cost estimators priced AV jobs. These days, being a cost estimator for any AV firm is among the most challenging jobs in the industry, in light of heightened competition and increasingly complex projects. It’s not easy to compare apples to apples.
So this veteran AV integration company hired a secret shopper to take the same AV project specifications to several of its own sales offices and get quotes. To management’s surprise, the cost estimates varied by as much as $20,000, with labor costs making up the bulk of the difference. Same company, same equipment, same specs, very different quotes.
This experiment brings into focus two sides of the same coin. For AV professionals bidding on jobs, there is sometimes little information to go on when differentiating between a low-ball bid and a carefully prepared estimate. And for AV customers, it can be hard to figure out what a project really should cost. What if there were a tool to make project estimation easier and, if not more uniform, at least more consistent and transparent? The new AV-iQ from InfoComm International helps take some of the guesswork out of project estimation.
“There was a time this industry was served by maybe 400 seasoned AV integrators who would submit fairly comparable bids for AV projects,” explains John Fuchs, senior vice president of InfoComm iQ. “Now there are 8,000 to 10,000 integrators, many still coming into the market without much experience bidding on projects. Coming in 30 percent too low on a cost estimate means they lose money and the industry takes a hit. What the industry has needed for while — and what we’ve got now — is a sophisticated AV product listing and project cost-estimating tool, created to emulate real life.”
InfoComm’s new AV-iQ cloud-based product database now features the Project Cost Estimator, a sophisticated software program for automatically generating an estimate based not only on the products specified, but also on the labor required to deploy them as part of an integrated AV system. Labor data is determined by a workgroup of industry professionals. (View an online presentation of the new AV-iQ.)
“Other trades have a good understanding of the labor required for their crafts,” says Fuchs. “Plumbing, heating, auto repair — they all have industry-standard labor guidelines. The AV-iQ Project Cost Estimator brings that type of insight to the AV industry.”
Because every AV market and every AV integrator/designer is different, the AV-iQ Project Cost Estimator is completely customizable to reflect a company’s own product pricing and labor rates. So although estimates may still differ, based on such differentiators as system features, build quality and local market dynamics, they are easily repeatable and clearly documented for maximum accountability.
The Project Cost Estimator also benefits AV consulting firms. “I use it as a backup to my internal cost estimator, as a reality check,” says Randy Tritz, CTS-D, partner at Shen Milsom & Wilke.
Here’s how it works:
For starters, AV companies — designers, integrators, distributors, customer enterprises — that want full access to AV-iQ’s features, including the new Project Cost Estimator, can request their own free, secure, cloud-based AV-iQ resource. The resource is then populated with information specific to that AV firm — preferred brands, distributors, manufacturers’ reps, pricing, etc. Individuals within those companies, from estimators and designers to technology managers, request access to the company’s custom AV-iQ resource, which is accessible through a web browser.
Now, say an AV integrator is bidding on a project. Using his or her custom login, the integrator, designer or project estimator begins comparing products that might go into the required AV system. The recently upgraded and re-launched AV-iQ database includes information from more than 1,000 manufacturers, distributors and manufacturer reps. It holds 400,000 SKUs across 1,200 AV brands and 500-plus product categories. Manufacturers and other product sources can populate the system with special offers and targeted information that are designed to help AV-iQ users zero in on the right products for a project.
“That part is a game-changer,” say Fuchs. “We know that no one wants to be evaluated solely on the cost of their products, so the ability for manufacturers and distributors to provide value-added information will raise the bar on all projects designed within AV-iQ.”
As the integrator begins picking products, he or she adds them to a project list, which can be saved securely in the cloud and re-used for future projects. Registered AV-iQ users can save an unlimited number of project lists with unique identifiers, such as “Boardroom,” or more specific labels, such as “Company XYZ’s Boardroom.”
Because integration companies and design firms may have relationships with several manufacturers and distributors, the AV-iQ user may obtain products from one of several sources available within the AV-iQ tool. He or she can also customize pricing using “Mark Up From Cost” or “Mark Down From MSRP” fields. Once the integrator chooses the products and their sources, and adjusts pricing, he or she exports the project list to the Project Cost Estimator.
At this point, AV-iQ already offers companies a good idea of what the nuts and bolts of a project may cost, but it’s only part of the estimate. The Project Cost Estimator automatically assigns labor values for the design, in-house fabrication, installation and commissioning of the project’s systems. The labor values were determined by InfoComm’s Labor Units Task Force, a working group of the InfoComm Standards and Industry Innovations department. Task Force members from throughout the industry spent years comparing best practices to determine average and reasonable labor requirements for designing and installing roughly 400 of the 500 product types contained in the AV-iQ database.
“The tool helps define 80 percent of the labor cost of a project but leaves the most challenging, most complex elements to the qualified professional to address,” says Fuchs.
Although the Project Cost Estimator assigns labor values automatically, based on the work of the Labor Units Task Force, it is completely customizable. For example, if by default the Project Cost Estimator predicts it should take two hours to install a certain piece of equipment, but in the AV integrator’s experience it takes three hours, the AV integrator can enter his own labor units.
Once all the labor values are assigned, the AV integrator enters the company’s labor rates to arrive at a final estimate.
“There is also a section for special considerations,” explains Fuchs. “These are all the other elements that are critical to the evaluation of any project when submitting a price — cable costs, project management costs, perhaps union issues, who’s doing the programming.”
Project lists and estimates can be exported from AV-iQ in several ways, from a comma-separated value (CSV) file that the integrator/designer/customer can pull into a spreadsheet, to Extensible Markup Language (XML), which AV professionals can integrate into other applications and web platforms.
“The new Project Cost Estimator allows users to assemble a materials list from chosen products that are appropriate for the job,” says Bill Mullin, CTS-D, president of AV distributor Starin. “The labor units help go the next step of getting a well-rounded project to quote. The tool can be used as a budgetary framework, then brought into an existing estimation system. Or some shops may find it comprehensive and ready for primetime proposing.”
“This functionality,” Fuchs says, “as well as all the other functionality of the new AV-iQ, stands to save our industry millions of dollars.”
The Project Cost Estimator is just one element of the new AV-iQ database. It is available to registered employees of firms that request a free, company-specific AV-iQ catalog resource.
“This project resource addresses a significant challenge in our day-to-day workflow,” say Mike Landrum, CEO of Technical Innovation. “Much as the creation of the CTS program did years ago, this standardization and commitment to best practices by our industry’s organization lends credibility to integrators at all levels and benefits not only our businesses, but our clients and the industry as a whole.”
Even professionals who don’t request a dedicated online resource with the Project Cost Estimator can benefit from the new AV-iQ. Anyone can research AV products and services for free at AV-iQ.com without registering. But by registering for their own free MY-iQ portal, users can research pricing and other information.
“The search engine keeps getting better,” says Tritz. “Especially now with the ability to compare products among multiple manufacturers.”
Registered MY-iQ users can create product-comparison lists but can’t access labor unit data or the Project Cost Estimator. In summary:
- Unregistered users can access the AV-iQ database with standard product filters and no pricing information.
- Registered users enjoy the MY-iQ portal, advanced product filters, comparison tools and unlimited project lists.
- Registered companies and their staff enjoy all the benefits of AV-iQ and MY-iQ, plus access to tailored pricing, value-added information, labor-unit data and the Project Cost Estimator.
The new AV-iQ is also a global tool, enabling AV professionals to research equipment worldwide. The database is growing at a rate of 25,000 products a month, making AV-iQ an indispensable online tool.
“I stress to my consulting team that the ability to obtain information about multiple products at one time, rather than opening and searching multiple web sites and boiling the information down, is of great time savings,” says Tritz. “Additionally, having REVIT and CAD files in the same location saves time as well.”
“The integration and design community need this type of knowledge,” say Fuchs. “And making it available to technology managers and AV customers will go a long way toward creating an educated consumer.”
This column was reprinted with permission from InfoComm International and originally appeared here.