While BIM is increasingly becoming a necessity in architecture, it is still difficult to quantify the benefits it is bringing to the industry. Currently, there is no industry-standard method for calculating BIM’s Return on Investment (ROI) and, due to the complexities of the calculation, many firms have not adopted any consistent measurement practices to determine the monetary benefit that the technology has brought to their practice. The difficulty centers upon the fact that traditional analysis of ROI is unable to represent intangible factors that are important to a construction project such as avoided costs or improved safety.
Therefore, as the leading providers of BIM technology, Autodesk was interested in researching the subject. Their study, “Achieving Strategic ROI: Measuring the Value of BIM,” reveals that the role of ROI in technology decision making is shifting in that leading firms are seeking a more nuanced view of ROI to inform their strategy of investment and innovation.
Transcending the traditional “profit versus cost” calculation, companies are looking into different dimensions of the company to develop well-informed quantifications of their ROI for BIM.
How much is BIM really costing my company?
Autodesk’s study reveals that firms do indeed understand the costs associated with BIM adoption. However, there is significant variation among firms in the practice of measuring or tracking BIM investment as a separate cost, distinct from business operations as a whole. The costs of BIM often extend far beyond hardware upgrades, so in calculating the cost to your firm you should consider the following are three areas:
- Direct labor costs in relation to BIM startup are necessary to ensure that the implementation of technology is successful. These costs include the obvious need for initial staff training and continuing instruction, but it’s also important to consider the financial consequences of a less efficient team during the transition period to BIM.
- Many firms also find that they’ve had to hire an additional BIM manager or more IT support to enable their new BIM capabilities. The level of expertise - and therefore the cost of that expertise - should be proportional to the advances being made in the technology.
- There are also long-term costs involved with BIM related to how the workflow for BIM changes your firm’s internal processes. These come from BIM best practices such as integrating data and information in the model earlier in the design development process, or incorporating modelling during preconstruction. These costs are difficult to quantify but they are otherwise necessary in building a complete investment calculation.
Understanding the benefits of BIM
The long-term benefits of BIM to firms come thanks to the changes in internal processes that result from BIM’s unique workflow. These changes occur in various ways in the firm and generally create intangible factors that are difficult to quantify in ROI calculations, including:
- A reduction in errors.
- Improved project delivery through efficient use of resources, improved safety and accurate timelines which results in a higher overall net fee revenue.
- Increased staffing competency, as talented designers are more likely to want to work with a firm that is working with the latest technology, and increased staff retention.
While these changes do not necessarily result in instantly larger profits, quantifying these benefits in their ROI assessment allows firms to be better at understanding how measurement and technology innovation can be combined strategically to inform progress toward future levels of BIM maturity. Autodesk’s study found that the maturity of a firm’s level of BIM adoption was correlated with their reports of high ROI: a majority of high-maturity BIM users reported high ROI, while only 20% of low-maturity BIM users could claim the same, showing that BIM is an investment which requires patience and commitment.
Interestingly however, Autodesk reports that firms with a mature level of BIM adoption actually found their ROI more difficult to measure. In some of the most experienced firms, rigorous approaches to ROI had transformed the workflow of the companies so completely that they no longer found the measurement of BIM to be critical to decision making. One construction BIM manager writes:
“We realized that we were achieving three to five times payback on the number of dollars we put into a project. Eventually we got to the point where... we have an inherent knowledge that there is value to BIM.”
At this point, ROI is used to inform decisions on specific strategies in which BIM is an assumed component, rather than being used to validate their initial investment in BIM.
Quantifying the benefits of BIM
To apply the concept of ROI towards making smart decisions regarding your firm’s technology adoption, it’s important to target expected BIM benefits such as “increased design productivity from parametrically coordinated documents” or “fewer design change orders.” In order to assess these benefits, companies can apply tangible measures that are associated with these benefit targets, with the most obvious of these metrics being cost savings through a decreased amount of hours spent on a project, or an overall project timeline reduction. Here are a few examples on how that might be determined:
- For a quantitative benefit such as “efficient use of resources” due to improved team size and focus during the construction phase, the firm might increase the specialization of the BIM team. The firm can then track the time invested in specific tasks by phase and compare the metrics to the firm’s pre-existing benchmarks for comparable projects. This can provide feedback on the effectiveness of the strategy.
- For more qualitative factors such as “project design scope understanding” or “owner comfort level,” metrics can be applied by tracking a score that is determined through a questionnaire administered to staff at key points in the project’s timeline.
While it is not a straight-forward process, measuring the return on your BIM investment is an important practice that goes beyond determining whether the initial costs of your transition to BIM was worth it. Calculating your firm’s ROI by targeting benefits, tracking investments, and measuring returns helps you strategize over how to implement the best BIM technologies and practices for your firm’s specific place in the market.
This article was sponsored by Autodesk.