An estimate is founded based on two important features, revision and version handling. The revision handles everything related to the work scope, all changes done in the composition of the tree structure is handled by the Revision. The version handles the business side of the estimate; quantities, costs and markups. This means that there can be several versions connected to the same revision in order to handle quantity breaks and differentiated offering to different customers.
The estimate header is the umbrella object that holds the estimate together in
terms of revision, version and status handling. The top items to be managed
within an estimate are managed via a revision handling. This allows to change
the work scope for an estimate containing the same or different top items. The tree structures for
different revisions will most likely diverge in the composition of terms of sub-items, components to be used and operations to be executed. The
work scope changes/updates affects the result, meaning that the outcome of the calculations will be different between revisions.
An estimate header revision can have the Created, InProgress, Partially
Calculated, Calculated, Partially Confirmed, Confirmed, Cancelled and Closed
status. The first estimate header revision is created by the system in status
Created when a new record is saved in the Estimate window. It is
also possible to copy an existing revision, retrieving all top items with the
present setup, getting the next available revision number in the sequence.
The ability to change; add new items depend upon the status of the version in combination with the status of the estimate header. Possible statuses for the estimate header are:
| Status | Description |
| Created | An Estimate header is created in Created status. This status indicates that a tree structure has not yet been established. Item records are possible to create. |
| InProgress | One or several top items are added to the estimate tree structure. The estimate work is in progress in terms of framing the tree structure. Different types of items and costs can be added as well as markups. |
| PartlyCalculated | The status of the estimate indicates that the costs have been calculated for some of the versions. There are still versions to be calculated. |
| Calculated | All versions are calculated. |
| PartlyConfirmed | The status of the estimate indicates that some of the versions are now confirmed and can be connected to business objects. There are still versions which are in InProgress or Calculated status. The composition of the tree structure cannot be updated. |
| Confirmed | All versions are Confirmed and can be transferred to business objects. The composition of the tree structure cannot be updated. |
| PartlyCompleted | Deliverable lines have been connected to business object lines for some of the versions. There are still versions to be connected. |
| Completed | Deliverable lines for all versions are connected to business object lines. |
| Closed | The work with an Estimate header promoted to Closed is considered as complete. No further actions are allowed to be taken for the items within the tree structure or the header itself. Closing an Estimate header is a manual step that can be executed if all versions are either Confirmed or Cancelled . |
| Canceled | The work with the Estimate revision has been aborted. It is possible to change to this status at any time; however, once in this status, no further actions are allowed to be taken. |
It is possible to revise a calculation if changes are required related to the work scope and/or the version cost build-up. If a revise is executed then is the status set back to InProgress. It is possible to revise the version calculation for a selected item and its sub-items or for the complete version, i.e. all top items and sub-items are set back to InProgress for the version.
Revise can be executed also for a version in status Completed. The connection to the business object then remains and the update functionality can be used to transfer the Confirmed calculation after completed changes of the work scope and/or version cost build-up.
The version handles the business side of the estimate; quantities, costs and
markups. A default version is always created when the estimate header is
created. It is however possible to create several versions to handle quantity breaks and differentiated offering to different customers.
When a new version is created it is always based on the previous version in the sequence, i.e. previous version is copied. It is only possible to work with one version at the time. The field Selected Version No in the estimate header indicate the version in progress. It is possible to change the version via a right-click option from the Estimate/Version tab.
There is a currency handling within the estimate both for cost and sales price. Details for how currency codes and rates are handled in the estimate process is given below.
The currency code set in the estimate header is always considered when calculating the cost for estimate structure, the accounting currency of the estimate company is defaulted but can be changed to a different one if necessary. It is always the accounting currency for the estimate company that is the reference currency, independent of currency code selected for the estimate.
All costs within the estimate are always recalculated, if necessary, via the reference currency code to the currency code defined for the estimate.
The estimate considers the following hierarchy form where to fetch the rates when calculating cost for components and outside operations;
When saving an estimate header, a record appears automatically in the Version/Currency Rate tab for the accounting currency of the estimate company. This is the foundation for a possible estimate specific currency rate type, i.e. the currency rates are only used by a single estimate id, revision and version.
There are two options;
The currency code in the Deliverables tab for a customer is possible to edit until the deliverable lines linked to an included version are connected to a business object. When a connection exists then this field is locked and the only option to update is to unpeg.
A recalculation of the Calc Sales Price/Curr is done upon saving based on the defined currency code, both for the version in the upper table and the deliverable lines in the lower table.
The rate for a customer currency code is fetched before calculation according to the following hierarchy;
The status of the version indicates weather the costs for the estimate can be considered to be accurate or not. It also determines whether it is allowed to do work scope changes and if costs and/or markups can be updated, added or removed. It is allowed to do work scope changes until one version is set to Confirmed and the composition of the costs can be updated until the status of the selected version is set to Complete. Possible statuses for the estimate version are:
| Status | Description |
| InProgress | An estimate version is created in status InProgress. It indicates that the build-up of cost for the tree structure is in progress. Different types of costs and/or markups can be updated as well as added. |
| PartlyCalculated | Costs have been calculated for some of the top items. There are still top items to be calculated. |
| Calculated | This status indicates that a cost calculation has been performed for all top items. |
| PartlyConfirmed | Some of the top items are now confirmed for the version. There are still top items which are in InProgress or Calculated status. |
| Confirmed | All top items are confirmed and corresponding deliverables can now be transferred to a business object. When a version is Confirmed; costs, markups and the composition of the tree structure cannot be updated at all, i.e. the work scope for all top items are locked. |
| Completed | All deliverable lines for all versions are connected to business object lines. |
| Canceled | The work with the Estimate version has been aborted. Can change to this status as long as the version is not set to Confirmed; however, once in this status, no further actions are allowed to be taken for the version. If the work needs to be resumed then have to create a new version based on the Cancelled one. |
The tree structure is a graphical outline of several items, representing different item types such as manufactured parts. The estimate tree structure provides the possibility to work with more than one top item. Viewed in the tree structure is the top item itself and all sub-items which compose the top item.
The following generic icons and overlays exists for the tree structure;
| Icons | Description |
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Generic item |
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Inactive item |
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Modified item |
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The selected version of the item is Confirmed |
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A different version of the item is Confirmed |
When working with an estimate, it is possible to create items which together compose a tree structure. The item header is the container of the item types which determines the direction of the item and the composition of the tree structure.
The item types are customer defined but must be connected to a reference item type. The reference item type determines how a sub-item influences the work scope of the top item and the actions possible to execute.
There are two reference item types;
The status of the items determine the authenticity of the cost build-up for an item and a selected version. The ability to change; add new items depend upon the item status. Possible statuses for an item are:
| Status | Description |
| InProgress | An estimate item is created in status InProgress. It indicates that the build-up of cost for the item is in progress. Different types of costs can be updated as well as added |
| Calculated | This status indicates that a cost calculation has been performed for the item |
| Confirmed | The item is Confirmed. The cost build-up cannot be updated and the characteristic of the item and its sub-items are locked from changes |
| Canceled | The work with the Estimate revision has been aborted. This is not a status that can be set by the user from the item. All items within the tree structure receives this status when the revision is cancelled |
It is possible to exclude a branch in the tree structure from the calculation by setting them as Inactive:
| Status | Description |
| Inactive |
The work with the item has been aborted. It is possible to set an item to inactive at
any time via right-click option as long as it is not in Confirmed
status for any version. All inactive nodes are excluded from the cost
calculation. Though there are no obstacles that prevent from performing
updates of the item, all updates/changes done are not taken into
consideration until the item is set to Active again.
An Inactive item is possible to set back to Active as long as its parent item isn’t Confirmed. |
| Active | An item header is created as Active. It indicates that item record, are included in the work scope and hence in the cost calculation. |
Note: All item headers are default set to Active but it is possible to manually set an item to Inactive as long as the the item it self or a sub-item is Confirmed for a diffrent version. If an item is set to Inactive then all the sub-items below also are set to Inactive. An item can be set back to Active at any time, by promoting the parent to Active or from the item itself.
It is possible to connect customers who are to receive a quotation price for the top items in the estimate tree structure to the estimate, all customer categories can be used without restrictions. If there is more than one stakeholder than is it supported to connect than more than one customer to the estimate. In the Deliverables tab can versions be included for all customers connected to the estimate revision as the base for the succeeding quote process.
An additional cost is a cost that the company must pay for independent of
sales or not. It is reoccurring cost which can be considered as stable in its
nature. Additional costs are defined as a value per cost element. It can be done
in two ways, either for the whole estimate or per estimate item.
When it is a requirement to define additional costs for the entire estimate then it can be done as a part of the version handling. Additional costs defined for a version are applied on the top items. If it is necessary to differentiate the additional cost for the estimate items, then the option exists to define such costs per item in the estimate structure.
Additional costs (in literature studies more known as ‘Fixed costs’) are
costs not connected to the products. It is not possible to add markup to these
costs. Product overhead costs and product cost contingency are part of the
product cost. When adding additional costs for a product due to insecurity etc.
the product cost contingency function shall be used.
Markup is the difference between the cost of a product or service and its selling price. A markup is added onto the total cost incurred by the producer to cover expenses and profit in fixing the selling price. If it is necessary to differentiate the markups for the estimate items then the option to define them per item in the estimate structure exists. Markups can be defined as a value or a percentage add-on of the accumulated cost. It is either possible to define the markup for a whole item or for just a specific cost element. If markups are defined for an item then is the value distributed on each element based on its percentage share of the total accumulated cost. This means that the accumulated markup per cost element for a possible parent item is equal to the distribution of the item markup done for the sub-item.
It is not possible to add on any markups to additional costs. An additional cost is a cost that the company must pay for independent of sales or not. Since they are stable reoccurring costs is the need of markup insignificant.
When performing the calculation then is also the markup value accumulated upstream in the structure to get a final price. To be noticed is that markups and costs are handled separately up to compilation of the estimate summary.
Product overhead costs and product cost contingency are part of the product cost so when adding markup for a product with overheads or cost contingency these costs are considered. It is only the additional cost you can’t add markup for.
It is the estimate deliverable lines that can be used to establish a bid price for quotation or contract. It is possible to include one or several version for each customer defined for the estimate. If a version is included for a customer then it is possible to transfer the result of the estimate calculation performed for the top items to other business objects. A condition to be able to transfer is that all top items must be, either in status Confirmed for the included version or else inactivated in the tree structure. If the calculated bid price for a top item is not so satisfactory, then it is possible to enter an override sales price to be used when executing a transfer of the deliverables for an included version.
In order to transfer a generic top item a site must be defined for the deliverable line. If other top items are included for the estimate revision then it is only possible to select among sites connected to the same company as the other top items are connected. Top items can be connected to different sites but all sites used by the top items must be connected to the same company.