ROI on BIM: Where is the Evidence and Will it be Kept Secret?

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Monday, September 7th, 2015
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BIM and associated technologies have been touted as the savings saviours of the modern construction era and the expectations for a direct and quantifiable return are mounting, particularly from traditionalists – but at what cost to technological advancement, innovation, competitiveness and industry best practice?

Quantifying BIM

For projects, the missing piece to this puzzle has always been that you cannot build the same project twice in order to quantify what the savings would be in direct comparison to having it built traditionally.

Technology enables improved production of a project through a return to best practice project management. These tools allow companies to create efficiencies within their workflows and business operations. They allow project teams to economise and leverage their resources through upskilling and have more immediate access to information in a way that has never been possible before on a project.

By way of example, Dutch company Vabi has just released the Vabi Financial Simulator which is a plugin for Autodesk Revit. It has been specifically designed to bring together and display financial performance data across BIM design teams, including ROI impacts of design decisions. We are likely to see more take up in these types of technology as we focus on how to determine savings during early design and seek greater assurance on the longer term viability of a project.

The Stanford University Centre for Integrated Facility Engineering is well-referenced in relation to its 2007 report on a study of 32 projects across the US, Europe and Asia. The study reports the use of BIM on a project could eliminate up to 40 per cent of unbudgeted changes, increase cost estimation accuracy to within three per cent and reduce the time taken to generate a cost estimate by 80 per cent.

In 2010, Allen Consulting Group published the results of its industry-sponsored study into the impacts of BIM on productivity. The study’s findings reported that the accelerated and widespread adoption of BIM on the Australian economy was likely to increase GDP by 0.2 basis points in 2011. Whilst this may not seem much, the study noted the likelihood of a cumulative effect by 2025 would mean an increase of five basis points in comparison to what they describe as a “business as usual” scenario.

Real ROI – Is the secret already out?

There are a number of stories from owners and stakeholders who have accepted the early evidence and are forging ahead with BIM adoption to realise project savings and returns for the life of an asset.

The UK Government has published cost data since 2012 in relation to achieving its overarching target of 15 to 20 per cent reduction in construction costs by 2016. Their July 2014 report, UK Departmental Cost Benchmarks Cost Reduction Trajectories and Cost Reductions demonstrates a continued decline in costs and further evidences that the target “remains practicable.”

The UK’s Crossrail aims to be the first major infrastructure project in Europe to fully realise the BIM lifecycle concept. The company is focused on achieving long-term savings through the application of BIM to handover to the rail operators, an opportunity to realise the longer term benefits of the asset. Crossrail #2 is now the focus of realising the savings from the Crossrail project and industry commentators are suggesting achievable savings of 10 to 15 per cent.

US General Services Administration’s (GSA) commitment for more than a decade to a National 3D-4D-BIM Program is realising consistent and measurable sustainability savings across a public sector building portfolio of more than 9,000 assets. Its initial 10 pilot projects reported cost savings that covered the cost of the first year’s pilot program. It’s now reporting regular savings in early detection of errors and omissions, reduced construction times, fast and accurate space measurements with less than five per cent variance and better transparency and reliability of energy performance measures.

The University of Colorado, Health Sciences Centre is one of the few projects able to measure the success of BIM against a similar project using conventional processes. R1 ($216 million) was successfully completed on time and within budget using a traditional delivery approach. R2 ($201 million) was built a few years later using an integrated virtual design and construction process (VDC) and resulted in “outstanding” results with improved productivity, increased pre-fabrication, less rework, reduced RFIs and change orders, and was completed two months ahead of schedule and under budget.

The award-winning Collaborative Life Sciences Building (CLSB) in Portland, Oregon opened in 2014 with LEED Platinum certification. The $295 million project involved the collaboration of 28 different design teams and directly attributes BIM technologies to a $10 million saving on construction costs.

Over the last 10 years, Sutter Health Care has invested more than $4.7 billion in the improvement of its facilities for less than the conventional health construction costs. Its $320 million Eden Medical Centre, completed in 2012, was delivered on time and within budget and was a landmark in BIM collaboration bringing together an 11-party Integrated Project Delivery Contract.

In 2008, UNITEC, New Zealand’s largest institute of technology, undertook a four-year whole of campus BIM integrated information system to dramatically change the management of its facilities for the whole of their life cycle. This is now being used to accurately plan and manage the facilities and operations of teams and contractors. The institution is reporting an annual ROI from the project of 23 per cent.

So what’s in BIM for me?

For many projects, the longer term ROI is yet to be realised for building owners as the buildings themselves are still in their infancy and many projects are not yet out of the ground.

However, we are now seeing strong evidence of progressive governments, health care and educational institutions who have embraced BIM to garner the efficiencies needed to better manage these large asset portfolios within tight budgets. This success is being attributed to the commitment to BIM upfront, which is considered the determining factor on whether the ROI of the whole project in relation to budget, time and the building’s expected useful life is achieved.

As an industry we now need to move discussions on from “what are the expected BIM returns” and back to best practice for construction projects. The longer term ROI will become evident as the industry best practice establishes itself over the coming years and the discussions around whether to BIM or not to BIM will become obsolete.

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