Project Return

EPC Material Quantity and Cost Estimation – Importance in Sales and Execution cycle



June 11th , 2018

There are many challenges in an EPC industry. It can be broadly categorized into i) managing pre-sales  ii) project planning and execution. The most critical factors which affect both of them are - material BOQ management, make an accurate price based on costs and mark-up, proper cost estimation (this is extremely important where there is competitive bidding), ensuring proper cost control while doing the actual project planning and execution. Today, the material cost is 70% to 75%, whereas other costs (manpower and overhead) are in the range of 25% to 30%.

It is evident from above that accurate material costing is absolute must to win any new business and also to execute the projects in a profitable manner.

While proper material estimation (both item quantity and cost) is generally challenging, it is all the way more important for the organizations, where they have to respond to their customers RFQ or bids with profitability less than 15%. Today, most of the organizations estimate the material costs based on the following key parameters-

  • Standardized item master with accurate specifications
  • Standardized BOQ
  • Accurate historical costing
  • Ability to generate engineering BOM/BOQ right from sales/RFQ stage
  • Ability to capture all the costs – rate, taxes, import duties, CHA, etc. for each item
  • Ability to control purchase target rates

Therefore, To be successful and profitable it becomes even more necessary to accurately track project progress, manage project costs and budgets, manage the vendors & subcontractors for EPC industries. To ensure this you need a cutting-edge software which can control all parameters regarding the project cost and budget.

TouchBase® – a comprehensively designed Integrated Project Management Software helps you overcome all the above challenges and automates entire project execution life-cycle and avails you to avoid project cost overruns.

How is it beneficial for you?

  • Accurate cost estimates right at sales RFQ/Bidding stage
  • Automates the complete end to end Project Management life-cycle with cost control.
  • Procurement costs controlled by approved rates by the management
  • Track all changes between any engineering BOM/BOQ changes.
  • Track all changes in cost sheets
  • Defines the approval mechanism if the budget gets exceeded or the target price is given to the procurement team exceeds.
  • Overview of Budget cost vs. Actual expenses.
  • Cost control by measuring variances from cost baseline & taking effective actions to achieve minimum costs.



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