Sooooooo, Which System Pays More?

SoooooooAfter teaching computer-assisted estimating systems for almost 20 years, managing countless estimate studies, and following up on all sorts of accusations throughout the years, I can confidently answer that question. “It depends.”Years ago, when computer-assisted estimates were first finding their way into this industry, they were replacing collision repair estimates written manually, using information from printed books. This hand-written method i invites inconsistency, as well as human error. Inconsistencies include varying interpretations of both “procedure page (P-page)” and “text note” information. Errors could be as simple as look-up mistakes, failure to “add as required,” or calculation errors. These are all human errors resulting from locating, interpreting, and managing large amounts of detailed information. Errors could be as simple as look-up mistakes, failure to “add as required,” or calculation errors. These are all human errors resulting from locating, interpreting, and managing large amounts of detailed information.Enter computers.Enter computers. Being that they are designed for locating, interpreting and managing large amount of detailed information, it would seem natural that a computer system would be an ideal tool for aiding in the estimating process. However, buyers of these systems needed to know what they were getting and raised questions such as, “Will this be a good investment?” and, “Will use of this system justify its cost?”Studies were designed to measure this. Manually written estimates were converted to one or more computer systems. The new computer-assisted estimate was written to reflect all the judgments and intent of the original hand-written estimate. Over large numbers of converted estimates, several patterns emerged:1. Automation forced the consistency of procedural items. 2. The automation reduced parts selection errors and eliminated math errors. These, of course, showed advantages for automating the estimating process by applying consistent procedures and advantages for the bottom line by removing redundancies and errors.But the solution to a better estimate didn’t come without its own set of problems.An important assumption is made. These advantages are realized IF the computer-assisted estimate is written without errors.Errors can occur with any of the computer-assisted estimating systems. For example, errors in automated systems could include poor or missing selections for options, parts and additional operations.An imperfect manual estimate would logically be improved with a perfect computer estimate from any of the systems. Conversely, a perfect manual estimate should exactly match a perfect estimate written with a computer (Mitchell to UltraMate, or Motor to Pathways).The critical issue is how well the estimate is written—manually or automated—regardless of which system you use.Comparing one system to another also raises some concerns. First, a valid test would require several hundred examples to be statistically significant. Second, there are inherent differences between the systems for procedures, including operations and automation. Third, exactly what constitutes a “perfect” estimate on any one system may be subject to argument.

Comparing just a few estimates between systems could yield results that show wide variances. Because labor amounts are developed separately and under different procedures by the individual information providers, any single vehicle’s data could show extreme differences. If System A shows 2.0 hours to refinish a certain fender, while System B shows 2.2 for the same part, System B appears to provide 10 percent more labor time. I have reviewed many of these “mini-studies” accusing one vendor or another of being too high (or too low) and might find wide variances such as this on a single estimate comparison. However, labor on the next part or next estimate may just as easily show System A higher.

For example, the chart below shows labor amounts for a common part on a common vehicle estimated on each system. Additional operations were not added, even though procedures indicated they were needed.As shown, we can see a variance in labor amounts. The ADP system appears to provide 20 percent less labor, which could lead to an erroneous conclusion.

However, labor procedures are different with each system. For replacement hood labor, the hood insulator pad R&I is treated differently. ADP does not include labor, MOTOR includes labor when it is standard equipment, and Mitchell includes labor if it is clip-on, but not the adhesive type. If we add the needed labor amount for hood insulator pad Remove and Install (R&I) (0.3 on the ADP system), ADP’s labor amount becomes greater.

Again, it depends on how well the estimate is written.

Now let’s look at some additional parts for the same car, both separately and combined.Sometimes the flat rate amounts are simply different, some higher, some lower.

Many times the flat rate amounts are varied from not having comparable operations selected, not having proper procedures applied, or not following text notes. After adding operations according to each system’s P-pages and Labor Notes, I came up with the following totals. My totals do not include labor for exterior trim, suspension alignments or refinish. My totals are still debatable, serving here only as an example.

By adding operations according the written rules, labor totals can change significantly. However, perfectly applying a system's procedures may be arguable. Would the writer have likely thought to add this item or make a proper judgment allowance for an operation “not included” on only one of the systems being compared? For example, when replacing a fender, MOTORS includes labor for replacing the fender liner, while Mitchell does not. Neither is wrong, just different. Would the Mitchell user have remembered to add a labor allowance for that liner?

Still, there will be differences on any one single claim. After several hundred different estimate comparisons, results start to show consistency. Even though some estimates are higher on one system, other estimates will be lower. Results tend to even out with a large numbers of cases, depending on the way P-page information is interpreted and applied. This, of course, assumes there is agreement in each case as to what is the perfect way to write a comparable estimate.

It seems highly unlikely that even two people would agree completely on enough estimates for a sample size large enough to have meaningful results.

Finally, the best argument for the initial question concerns market share. Sales figures for the three information providers vary dramatically within different regions of the country and comparisons of overall market share are subjective at best. More importantly, providers successfully sell their products to both insurers and repairers. If, in the long run, any system was consistently lower or higher for bottom line results, it would tend to be bought by only one of those markets.

With all three information providers selling to both sides of the market, we can conclude that their bottom-line results are fairly equivalent in the long run. Even though each has a different way of developing, automating and displaying the information, they are fulfilling their mission as neutral, independent vendors of collision repair cost data.

Sooooooo, which system pays more?

It depends.

It depends on how well the estimate is written according to the system being used. How well is your system being used?2000 Chevrolet CavalierAdjusted LaborReplacement PartsADPMOTORS MitchellHood 0.81.0 1.0

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