The most advanced building planning and development technologies are, therefore, required to successfully navigate the decision-making process and to avoid costly and potentially harmful choices. To meet this need, the AEC industry is turning to digitisation, of which Building Information Modelling (BIM) has been at the centre for several years, writes Dave Peacock, Technical Director of TÜV SÜD Building Advisory Service.
BIM creates a virtual model of a building over its entire lifecycle, and the associated methods, processes and organisational frameworks are structured. Information and designs are linked and integrated into a structured model used by all parties involved, from the planning and design phase through to construction, operation and demolition.
However, despite its potential to improve results through increased efficiency and cost reductions, many in our industry are still hesitant to embrace BIM. Much of this comes down to uncertainty about using the methodology in a first project, as BIM implementation requires a fundamental rethink of the way of working. This is because information relevant to a building must be integrated into BIM from the beginning and then successively enriched. The initial labour and material investment; the uncertainty of the contractor’s ability to deliver on the client side; a non-uniform system landscape; a lack of standardisation among the various parties involve with a project – and the cultural change that is required – continue to keep many from fully integrating BIM into their construction projects. The slow progress of BIM dissemination is also related to the low demand for BIM projects on the client side.
Analysing BIM’s ROI
BIM’s implementation ultimately depends on the economic feasibility of investing in it in the first place. Recent research undertaken by our colleagues in Germany, of one of its state-of-the-art construction projects, analysed the return on investment (ROI) for BIM. Completed in 2018, the planning phase for the building took about two years, while the construction phase required another two.
Typically, when distributing the lifecycle costs of a building, it is widely assumed that the operating costs account for about 80% of total building costs. TÜV SÜD’s example revealed this not always to be the case, as the majority of the costs (about 65%) were attributable to the design/construction phase and the smaller share (about 35%) to the operating phase. With the use of BIM, this effect is intensified, and the costs of operating the building only accounted for a share of about 31% of the total costs. This shift is because higher initial investments, such as more energy-efficient technical building or construction concepts, mean that costs are higher at the beginning. Even though the savings in the planning phase are relatively small, an investment in BIM will pay for itself in the short term due to the high savings in construction costs.
However, a considerable cost reduction is achieved in the operating phase, and analysis of this sample project showed that a 67-fold ROI can be achieved with an investment in BIM. This consists of increased revenue through BIM, in terms of an increase in the value of the building, as well as cost savings in the planning, construction and operating phases. Around 47% of the improvement in project EBIT of TÜV SÜD’s construction project was attributable to savings in the planning and construction phase, and 40% from the operating phase.
When examining the question of where the use of BIM has the greatest impact in terms of costs reduction, the following six key drivers were identified during this analysis:
1. Space optimisation
2. Reduction of maintenance work preparation
3. Reduction of operational running costs
4. BIM-based thermal building simulation
5. Avoidance of profit loss due to timely completion
6. BIM-based system simulation.
Other drivers that play a role in improving revenues or reducing costs were also identified. These included the reduction of the volume of additional work through clash detection and control; optimal construction process planning and budget monitoring with real-time control; the optimisation of construction site logistics; BIM-based cost management and the reduction of material waste through need-based purchasing.
Apart from the drivers that have a direct financial impact, BIM has various effects that cannot be measured quantitatively. Examples include the positive effects on the environment, health and safety and the reputation of the parties involved. For example, BIM supports sustainability goals as they can be taken into account from the very beginning of planning.
However, it is important to note that these key benefits can only be achieved when the BIM methodology is implemented correctly, as the quality of BIM throughout a project’s entire lifecycle plays an essential role in maximising these benefits. In projects where BIM has not been implemented correctly, we have seen costs increasing by approximately 10 to 30% over the initial design budget.
It is clear that BIM has the potential to increase efficiency and reduce construction costs during the planning, design and execution process while also improving overall project quality and utility. Building owners, investors and asset holders should, therefore, effectively adopt BIM as an essential standard to design, plan and operate assets over their entire lifecycle. However, BIM is far more than a technology and requires a holistic transformation process.