Maximize Estimating Efficiency: Apply the 80/20 Rule with AI Tools

Every estimator knows what it’s like to have to bid a particularly complex or large project. A famous proverb comes to mind, “How do you eat an elephant? One bite at a time.” When presented with a bid package, estimators often need to work through project narratives, template subcontract agreements, bid forms, and multiple disciplines’ drawing sets. The first time a particular project type is approached is often the most difficult. There can be so much information that analysis paralysis can be a real threat to simply starting the estimate.

Many productivity gurus would say that it is best to do the hard things first, and save the easy things for the end of a task. But when it comes to estimating, this can make for last-minute takeoff scrambles over some of the simplest of systems. It’s the equivalent of throwing a beautiful Hail Mary just to be tackled at the 5 yard line–by your own team.

There is a simple principle (or rule) that many use in the business world to keep themselves productive in the face of information overload. 

Table of Сontents

1. The Pareto Principle (80/20 Rule)
2. Using AI: Get the Easy and Tedious Tasks Done Faster

The Pareto Principle (80/20 Rule)

In 1906, Vilfredo Pareto, an Italian sociologist and economist, noted that approximately 80% of the land in Italy was owned by 20% of the population. In 1941, Joseph M. Juran, a management consultant, came across Pareto’s work and applied the concept to matters of quality issues in production, equating 80% of quality problems to have occurred by 20% of the causes. A common business adage emerged from these ideas, stating that 80% of a business’ revenue comes from 20% of its clients. In this modern context, the work of Pareto and Juran is commonly referred to as the “Pareto Principle” or “80/20 Rule.” 

While the Pareto Principle is most typically used to describe revenue or sales, the underlying 80/20 ratio has also been applied to all sorts of correlating relationships.

Applying the 80/20 Rule

Great, but how does this help with estimating? Productivity gurus have taken the 80/20 Rule and applied it to matters of efficiency and time management. Rather than spending 80% of your time on something that will only yield 20% of your desired results, why not inverse that relationship? In other words, spend 20% of your time on what will yield 80% of the results. Similarly, expend 20% of your productive energy and effort to produce 80% of your results.

When applied to productivity in electrical estimating, the application of the 80/20 rule often results in an estimator doing the easy stuff first–that which will only require 20% of their mental energy and time. 

The Challenge

To many estimators, especially those who have field, project management, or engineering backgrounds, the idea of doing the “easy” stuff first is counter-intuitive. After all, the easy 20% feels too easy–but that’s exactly what makes this method so productive. 

The pushback from the field electrician is often, “but how will it actually be built?” From an engineer, “how does it make sense?” And from a project manager, “does this actually cover all of the costs (and mistakes, and schedule impacts, and so on, etc.)?” All of these are valid and important questions, but these questions will require 80% of the estimator’s effort, time, and research. Especially at the onset of an estimate, it is difficult to determine how much time will be required to finish the bid, and time management is vital. The 80/20 Rule doesn’t ignore these questions, but instead delays them to a more appropriate time when the estimate has a bit of maturity, and the estimator can better determine the value of pursuing one of these 80% questions. Hypothetically, would it be worth 80% of an estimator’s time to research 5% of their final bid? Of course these 80% questions are not always so trivial to the final number, but the point remains. Instead of focusing on the challenging elements that often slow down an estimate, focus on those items that will give the estimate a fighting chance to get across the finish line.

The Benefits

The most immediate risk on any estimate is often, “will we be able to provide a responsible bid with our current workload in the time allotted to us?” As such, estimators are often against the clock. With the bid date right around the corner, it feels as though there is never enough information. Instead of worrying about all the information that an estimator doesn’t have (and likely will never have), the estimator can get to 80% of their output in just 20% of the time. For a Chief Estimator, or anyone who is reviewing that estimator’s bid, it is much easier to understand how a bid is developing if the estimate’s easy things can be quickly assessed. This allows for greater flexibility, more thoughtful responses, and more productive decisions earlier in the bidding process. 

Using AI: Get the Easy and Tedious Tasks Done Faster

For most established estimators, counting devices and running branch is not a challenge, but it can be quite time-consuming and tedious. AI-based takeoff software like Drawer AI can perform these easy and tedious tasks quickly, efficiently, and accurately. An estimator can designate “no-fly” zones for conduit and have Drawer AI run the branch in a matter of minutes. The software will follow panel and circuit callouts and combine (or isolate) circuits according to an estimator’s preferences. Accidentally forget about a “no-fly” zone? Simply draw it in and have Drawer AI re-run the whole thing again not in hours, but in minutes.

Get started today with Drawer AI by scheduling a consultation here.