Once you’ve got your measurements and calculated various ratios (see the two articles on how to measure the quality of your estimates), you must get down to the business of analyzing and interpreting the information at your disposal. This must be followed by decision making based on your analysis.

Rest assured that most of the analysis is intuitive. If you’ve got a high bid to win ratio then in most cases that will be a good thing. For projects that you do win, you can check the quality of your estimates (ratio of estimated to actual costs). If this is close to 1 (or 100%) then obviously you’re in good shape.

You can also get valuable insights from calculating the ratios based on the various categories that I mentioned in the two previous articles. If you’re performing well on small jobs but not on big ones, then probably you need to look at how you distribute work in a big project. Are your estimators overworked in this period or is your checking reduced due to work pressure. Better organization and team work may be a solution or during periods of high work pressure, it may be possible to outsource small or big projects to a specialized estimating firm and maintain the quality of your in house estimating team.

You may also need to look at the kind or type of jobs for which you have a bid to win ratio for and analyze whether these are the most profitable for you. If you’re happy with these kind of jobs maybe you should consider bidding more for them and less of those in which you have a terrible bid to win ratio and thus efficiently utilizing your resources, cutting down costs and improving quality. Is training for specific kinds of estimating an option if you’re missing out on your most profitable opportunities.

At the same time you can analyze the quality of estimating you get by outsourcing to a particular firm (if applicable) and compare it with yours. You can also compare the costs of both. This would enable you to come to a decision on what is the ideal amount of outsourcing you need to do, whether you shouldn’t do it at all or do all your estimating work through another firm.

Remember, to be useful these measurements shouldn’t be over a very small period of time and must contain enough jobs to be statistically significant. Measurement is a continuous process and after every decision made fresh measurements must be made and analysis conducted to find if the situation has improved or worsened. Otherwise you’re simply shooting in the dark and hoping you’re lucky.

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