It’s fairly easy to calculate an up to 60% return on investment for a BIM (Building Information Modeling) system using a standard formula. However, and especially during the recession, the gains of adopting BIM can be estimated even better by counting in longer-term benefits, such as increased business through improved process, project quality, safety and communication. According to industry gurus, the biggest growth in construction productivity will come from automated off-site activities that BIM enables.
The standard way to calculate return on a software investment is to compare its cost and effect on productivity against first year’s labor and training costs. Productivity is the most critical long-term result of the investment and thus its loss and gain are the most sensible variables in the equation. Results for BIM systems can vary from 20 up to 60% depending on the size of a company and the type of projects they do. Cost and labor savings are easy to calculate but most companies are not willing to publish figures for their BIM-generated revenue as it is much more difficult to establish accurate metrics for that.
Because of the above and because utilizing advanced 3D technology is still relatively new and rare in the construction industry outside steel fabrication, the biggest benefits of applying BIM as a process of leaner design and construction remain to be studied and documented. Dr. Rafael Sacks of the Faculty of Civil and Environmental Engineering at Technion, Israel Institute of Technology, is a recognized guru in BIM research. His studies from 2005 showed that parametric 3D BIM is clearly economically justifiable in structural engineering (ref. 1). A more recent award-winning economic analysis of construction productivity, by BIM pioneer Charles M. Eastman of Georgia Institute of Technology and Dr. Sacks, revealed that construction industry productivity growth has been better than what had previously been reported due to industrialized off-site manufacturing, which often is based on structural modeling (ref. 2).
“AEC productivity will be affected by certain trends,” said Rafael Sacks, interviewed at the Tekla Corporation headquarters in June 2009. “First of all, the level of IT adoption is changing: 3D modeling is pretty much a norm for architects already. Secondly, the complex supply and delivery chain of the industry will be optimized and integrated as a whole and its bottlenecks will change: construction models will be used to manage workflow as was done in the exemplary Meadowlands stadium project.”
“The added benefits of BIM are becoming a reality, but how do we measure the ROI of less waste in supply chains and eliminating errors later in the process? Much of construction is being moved off site and the results of this prefabrication are being calculated in a separate process. However, the prefabricated parts are brought on site with fewer errors. My assumption is that structural modeling affects construction productivity more than is being reported.”
“The traditional method of evaluation is inappropriate. In the current economic downturn it is not critical for companies to calculate their immediate software ROI but to join the BIM workflow in order to become competitive and stay in business for the future. Counting all benefits that lie ahead, they should end up with a value greater than just 60% improvement in drawing productivity. The projects that are implemented utilizing BIM and IPD (Integrated Project Delivery) make more money, which is a good enough reason for big companies like Skanska to demand their use in all of their projects.”
“The KanBIM research, which is the latest development that I am involved in with Tekla, looks a few years ahead and aims at improving on-site communication by using models as the background for the workers and team leaders to report the status of their tasks. This will definitely have an impact on construction productivity. In addition to improved communication on site, it will make project processes leaner, with less wasted time, effort and materials. There are already spearhead projects that have achieved significant savings by using lean processes based on building information modeling."
Referred research articles are available at:
1) http://bim.technion.ac.il
2) http://dx.doi.org/10.1061/(ASCE)0733-9364(2008)134:7(517)
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