In my last post, I talked about how firms should be analyzing their technology investment – specifically in BIM. I made a statement that set out a few assumptions:
“For a yearly expense equivalent to one person’s salary in a 20-30 person firm many could see such returns. In any other walk of life that would be considered a phenomenal Return on Investment and yet to improve all of their staffs’ work environment, to improve the buildings they deliver, and, as a result, take more of their fee home with them, the design professions are not willing to take this “risk”. As someone who has worked in this industry, I SHOULD understand this! Even more puzzling is why do savvy building owners, smart risk-takers who are willing to invest in expensive projects, not want to save hundreds of thousands, if not millions due to this technology and process change?”
Let me break down these assumptions.
1. Spend the Equivalent of One Person’s Salary
We work with a lot of firms of this size (20-20 staff). In almost every case a similar scenario has evolved. A fee is quoted on a project and by the time the project goes to construction almost all, if not all of this fee is spent. All of the contract administration becomes overhead to the project. Then the changes start to arise and the final product is compromised (value engineered) in order to be delivered. Every change made costs the owner and the designer in time, money, or quality, often all 3.
In every case, the investment we recommend amounts to between $50,000 and $100,000; less after the 1st year of success. Most employee’s cost falls within that range. So, if there are 20 employees, this amounts to 5% of their cost. So, a return of anything over that would be a good investment, and this is without all of the other inherent benefits.
2. Improve Staff Work Satisfaction
In almost every situation where staff is given an opportunity to utilize BIM effectively, they will balk at returning to the way they worked before. Yet, there are many examples of situations where the staff is not given this opportunity and the new process is measured with old metrics – how long did it take to produce each drawing? How do the drawings look? Do the drawings look coordinated? How many drawings are required for the project?
Notice the questions we ask – they are not about the building, but about the drawings. In a true Model-based approach, these questions become irrelevant because the model speaks for itself and those who participate enjoy what they are able to do with that model.
3. Produce Better Building (What is a better Building?)
How can one determine whether this new process produces a better building? Well, if there is less time spent in Contract Admin, less time doing tasks that a computer is far better at, there is more time for design. If there is more time for design, it stands to reason that the result will be better. Because errors are picked up digitally, they cost less, so not only does it cost the design team less time, it costs the owner much less. In addition, that error-decreased project is also closer to what the client wanted because it was tested first and understood far better in advance of ever wasting expensive on-site time.
That is what creates a “Better” building.
4. Make More Money Doing It
Here is the key – everyone benefits from this process. The design team does a better job and keeps more of their fee; the contractor can streamline the building process and provide a better product at a lower cost; the owner doesn’t have to spend on costly Changes - hard to quantify because they are expenses never incurred!
All of this is hard to quantify, but if one tries, there are some very obvious places to assess value.
Depicting Design Decisions
Firstly, pure and simply, how many places does each design decision show up on a set of drawings? 3, 4, 5? Let’s use 4 as an average; really it is every drawing, because every decision has a ripple effect. In a Model-Based process each decision is depicted in one place.
Changing Those Decisions
Changes happen. Regardless of how well the client understands the building or much time is spent. So, why have to make the change in more than one place. That takes time!
Let the Computer Compute
How much of the work done daily in your office is pure drudgery? Hatching walls, dimensioning, counting, resizing annotation; not only could people doing this work be spending time getting a design right, the computer does a much better job at it; once again leaving designers to what they do best.
How much time is spent analysing your design? Again, a computer is infinitely better at performing such tasks. And a model is the perfect environment in which to do it, if it is set up p[roperly with this end in mind!
So, take your firm or project through a very simple Return on Investment Potential analysis. If you are not comfortable creating one yourself, they are available. If you cannot find something that works for you we would be happy to get together and walk you through one.
Don’t forget to uncover every possible expenditure. Look at the time it takes to create traditional drawings. Then look at the time it takes to correct them at every milestone along the way. Look at the time and money it takes to correct problems that are only discovered once construction begins. Look at the time it take to make late design changes that could have been understood and picked up earlier. Look at the time it takes to do lighting, energy, structural, material and many other types of performance analyses.
Then, look at the benefits of doing all of these things correctly – having a better handle on costs, communicating with owners, avoiding RFI’s and minimizing Changes, improving building performance, responding to programme requirements.
Take all of this into account in performing a proper Return on your BIM Investment. If the result is more than 10% (which I know it should be), this is a return that you should take very seriously.
I believe that most returns will be significantly higher if BIM is implemented properly. If your ROI potential is less than 10%, I would suggest that you have really mastered the traditional, and you should probably not change. But if you want to see returns of 20%, 30%, 50%, you should seriously either have a look at how a BIM process can help your project team or have a second look at how you implemented BIM in the first place.
Our experience is that most involved – designers, builders and owners are not looking at the numbers, are not using technology to improve the projects they deliver, but are measuring effectiveness with old methods. Do yourself a favour; perform a proper ROI analysis, spend the money to invest wisely in a proper BIM implementation based on your goals and expectations, and reap the rewards that are rightfully yours.