The two words ‘SWAG’ and ‘PIDOOMA’ is often used as slang in the construction industry, especially for estimation, high level bench marking or projections. It is alike to the lingo word ‘hybrid of a guess’, ‘guesstimate’ or ‘ballpark figure.’ These estimates aren’t reliable as termed pulled-it directly- out-of- mid-air. Such estimates are generally developed in short of time, client needed answers in a fraction of time or someone may have to present roughly figure in their presentation and needed first-hand client approval.
For an example an order of magnitude of estimate, client ask that, how long it would take you to build eighty meters reinforced concrete wall or how much it will cost? Told, stop asking any detail, specifications or drawings, etc. now, and come up with your estimate, don’t do any research just take a moment and give me your best (SWAG) or (PIDOOMA) estimate right now. He might say I’ll break in proceedings for a minute, take a moment and come up with how many days and money it would take?
It is very difficult to give an estimate in such short notice, because its cost money, but nothing is impossible in the professional world, only you must be the confidant, experienced and can-do-it attitude. Ultimately, the estimate imitative from a combination of factors including historical knowledge, general thumbs-rules, and empirical/approximate calculations rather than a comprehensive search, proof or detailed calculation. SWAG or PIDOOMA both methods is an educated guess but is not stared as the best or most precise method of the estimate.
Some important factors shall consider while calculating high-level-estimate and you can’t really do proper research, under similar circumstances, the few points that may help you and have better self-confidence at the client face.
Check your Assumptions and Factors:
Factors and assumptions taken into considerations are played a vital role and provide clearer pictures and would have given better results. If you are projecting and producing something for longer period, what assumptions you are creating for the forecast, either the economy going to boom or predicted as continue to decline, trends in demands and supply of man, material etc. Always beneficial and give good results by using commonly practiced assumptions in the industry like Kg/m3 reinforcement, number of bricks per meter square etc. Look at how that’s going to affect your clients, keep an eye out for factors that are impacting your clients in a way that might influence your company too. Continue do research and update about the prohibitions, slowdowns, and natural calamities could have an enormous effect on what your assumptions. Keep re-checking them as more information comes in and bear-in mind that, it is okay to amend your prior assortment and guess.
“Assumption should have something that is believed to be true. It’s an instance that you can guess to happen during the physical and detail work.”
Communicate and administer the anticipations:
Communication is the key to monitor expectations, proper reporting the scenario, issues and matrices will ease to validate your assumptions. It also allows you to give more info about impacts on your estimate and financials predictions as well, help you to think through all the possibilities to give a range and factors under certain assumptions. More think about the expected scope, future high-level requirements and assume the processes used such as change order, variations, communication, project reporting, quality, issues, risk factors, etc. It establishes and defines a basis for understanding that can be used to communicate and administer expectations.
Proposition a Range with all possible assumptions:
People tend to understand that when a range is given, it is the best guess. There are so many factors that play into any estimate, including impressions, experience, and rough calculations among other things, most important the information at a given point in time. As an estimator if we know 1 m reinforced concrete wall for the height 3.5 m with 0.3 m thick or 1.05 cubic meter may have completed in approximate 1.5 days with nominal manpower, so that roughly 80 m wall shall may have complete in 12-15 days’ time with adequate manpower’s and if the thickness and height increases then proportionally the number of days or manpower’s slightly could be increase and the approximate cost for the same would be range between $800-$850 per running meter. (item rate includes concrete, re-bar and form work). In other ways, we may produce that it will take 14 days with $900 per running meter because that’s a good estimate based on some details or It will take 16 days with $950 per running meter because construction industry on the boom and materials, labor cost is in high demands. (Disclaimer- all figures used are hypothetical (pulled it directly out of mid-air). By offering a range, you now have some wriggle room if things don’t go as planned. Figure out the low and high end and provide an explanation with your answer. Explain some assumptions as they could affect the different points in the range.
“The range played variable which give difference in the low and high, the advantage of this ration of dispersion is that it is easy to something accommodated.”
1- Clearly highlight what are your assumptions that could cause it to change the estimate at later stage such as materials and labor factors, boom or decline in the market, etc.
2- Explain how and when you will be able to validate your assumptions and firm up your estimate like based on more detail received or exercise on unit build-up rate, etc.
3- Such estimates are anticipating more risk, the appropriate level of requirements to communicate risks.
4- Closely monitor day-to-day market trends and keep an eye for the factors that are impacting on your estimates.