The Business Value of BIM in North America 2007 – 2012

The Emperor is still naked!

Is the trend analysis of the Business Value of BIM in North America from 2007 through 2012  reality, or are many of us walking around with rose colored glasses?

I ask you, do you really believe the following statement ” Now in 2012, 71% of architects, engineers, contractors, and owners report they have become engaged with BIM on their projects …”.    If you define BIM as the life-cycle management of the built environment supported by digital technology, I can tell you that either the survey is flawed… a lot of people don’t know what BIM is… or we have a lot of folks inflating the truth.   There is NO WAY 71% of ANY of the groups are “engaged with BIM on their projects”…period, end of story.

Playing with Statistics?   The 71% average appears to have been calculated by taking a simple average of the “adoption rate” from architects, engineers, and contractors” from three size classes of firms “small, medium, and large”.   If I am correct, this is just plan WRONG.   Most firms in the U.S. are small business, thus a weighted average must be applied.   The “adoption rate” for small firms 50%… a number I also believe to be inaccurate.

I just came back from the NIBS Conference.   This is without question, the most valuable, authoritative meeting relative to BIM in the United States.  How many people were there you might ask?   A few hundred at most.

So, what does any of this matter?   Simple really.   Until our industry stops the hype and focus on important issues relative to BIM, we will continue to be mired in inaction.   The AECOO is the most unproductive business sector and also has the lowest rate of technology adoption.  These are facts….   if one wishes to be interested in facts that is.

Here some thoughts as to where emphasis must be placed:

  1. Greater adoption and use of collaborative construction delivery methods:  IPD – Integrated Project Delivery, and JOC – Job Order Contracting.  The later is a form of IPD specifically targeting renovation, repair, sustainability, and minor new construction projects.   Let’s face it, 80% or more of all funding for the built environment will be going in renovation, repair, and sustainability.
  2. Emphasis on business process, strategy, and standardized terms, metrics, and data architecture vs. technology.   Technology is NOT the problem, is the lack of clear, robust business strategy and processes, and domain knowledge… largely on the part of Owners that is the primary obstacle to progressive change.   Owners write the checks, they are “where the buck stops”.
  3. Focus upon life-cycle costs / total cost of ownership, vs. first costs.
  4. A bit more on data standards….   OMNICLASS, UNIFORMAT, MASTERFORMAT, COie, IFC, et al… all have there roll.  Some will survive, some may not.   The point is that unless we have standardized terms, definitions, detailed reference and actual cost information (localized materials, equipment, and labors), physical and functional condition metrics, etc. etc. etc.    …  we can’t collaborate or improve productivity!
  5. Participation by all stakeholders – Owners, AE’s, Contractors, SubContractors, Building Users, Oversight Groups, Regulatory Bodies, Building Product Manufacturers, Communities, ….






2013-WSP Group
2013-WSP Group

Why BIM should be renamed BIMM – The Value of BIM

BIM should should have been can BIMM – Building Information Modeling and Management. The emphasis upon 3D is silly, and the focus upon 3D replacing 2D is equally misdirected.

Products like Revit and Archicad are only relatively small components of a BIM solution.  BIM is a process embedded within and support by digital technology that enables more efficient cradle-to-grave management of the built environment.

Owners, contractors, A/E’s, oversight groups, and communities will all benefit from BIM relative to the management and usage of the built environment.

As many say, the “I” in BIM is the critical aspect.  Defensible, accessible, transparent, accurate and re-usable information is the true value of BIM.

Why BIM , IPD , and JOC Must be Accelerated

 Unfortunately, the construction industry has not yet used information technologies as effectively to integrate its  design, construction, and operational processes.  – NIST REPORT

ROI – US Capital Facilities Industry – NIST – While many of us are aware of how inefficient the AEC industry is  in the US, reading this report may provide some valuable insights.

As an industry we remain process and technology adverse.  This simple can not continue if we are to meet sustainability initiatives and compete effectively on a global basis.

BIM can serve as a central repository of INFORMATION, and in concert with other software programs support efficient construction delivery methods such as IPD / Integrated Project Delivery (for new construction) and JOC / Job Order Contracting ( for repair, renovation, sustainability projects), capital planning: CPMS / Capital Planning and Management Systems, space planning: CAFM / Computer-aided space planning, and “movable”  equipment maintenance and repair:  CMMS / Computerized Maintenance Management Systems.

BIM can serve as the centralized repository of standardized, reusable information including demographics, utilization, conditions, costs, projects, programs, contracts, codes, security, safety, …..

Information technologies have transformed many aspects of our daily lives and revolutionized industries in both the manufacturing and service  sectors.  Within the construction industry, the changes have so far been less radical.  However, the use of information technologies offers the potential for revolutionary change in the effectiveness with which  construction-related activities are executed and the value they add to  construction industry stakeholders.  Recent exponential growth in  computer, network, and wireless capabilities, coupled with more powerful  software applications, has made it possible to apply information
technologies in all phases of the building/facility life cycle, creating the  potential for streamlining historically fragmented operations. – NIST Report


Facility Life Cycle:  design and engineering, construction, O&M,
and decommissioning;.

Stakeholder Groups:  architects and engineers,  general contractors, sub-constrators/specialty fabricators and suppliers, and owners and operators, building occupants, oversight groups, community.

The Value of BIM – Building Information Modeling – IPD – Integrated Project Delivery and JOC (Job Order Contracting)

The true value of BIM in NOT in 3D modeling, clash detection, or providing architects and AEC firms a with a better way to “sell” new projects/buildings.

The value of BIM is in INFORMATION and the associated aspects of collaboration and life-cycle building management / total cost of ownership.

BIM is NOT technology alone, but a business process that is embedded within and support by technology. Autodesk, Bentley, Archicad, et al can not and do not supply BIM. They supply basic components of BIM, the 3D visualization engine and an associated database architecture … (both hopefully based upon open standards or they will be of little value). While all three would argue the point, facts are facts. There is too much domain knowledge required for life-cycle management for a single technology vendor to cover “all the bases”.

It up to Owners, Contractors, AE’s, and the wide range of Consultants and Complementary Technology/Software Providers to deliver true value to BIM – space planning, capital planning, operations and maintenance, costing/cost engineering, standardized taxonomies, metrics, benchmarks, decision support, collaborative project delivery processes, etc. …. components that enable a complete BIM system.

Transparent standardized information, collaboration and technology may someday enable BIM to deliver integrated construction / renovation / repair / maintenance / sustainability project delivery on a life-cycle basis.

In the interim, both JOC (job order contracting) and IPD (integrated project delivery) deliver today relative to exponentially more efficient and transparent construction project delivery methods and processes. Both are superior to design-bid-build, design-build, etc. etc.

Both JOC and IPD demand collaboration and both are performance based. JOC drives the project from concept/scoping through bidding, construction, warranty, and close-out.

IPD currently focuses upon collaboration from project conception through start-up, however, can be easily extended.

The limited view of IPD. The contractual IPD based upon various standardized IPD contracts ( IFoA – integrated form of agreement, etc). While the more important view of IPD is extension of the collaborative processes throughout the project and associated use of technology.

JOC already provides IPD and associated technology for renovation, repair, maintenance, and sustainability projects. It is a proven process, developed by the U.S. military years ago, however, currently, vastly improved through the use of technology such as that provided by e4Clicks ( and associated reference cost information (RSMeans) or other price “guides”.

JOC ( also known as SABER in the Air Force ) is available today for renovation, repair, and sustainability projects and is proven to improve collaboration and quality as well as reduce costs. Paperwork costs, which average 2-3% of total project costs are mitigated using JOC cost estimating and project management software (such as e4Clicks Project Estimator), while project timelines can be reduced dramatically, providing exponential value.

While the importance of BIM can not be overlooked as it will hopefully reshape the AEC industry, BIM is currently limited to 3D CAD and modest functionality, requiring the integration of third party software for CAFM, CMMS, CPMS, and JOC to reach it’s potential.

ROI – Return of Investment , Sustainability & High Performance Buildings / BIM

While strong progress has been made, the real estate industry is struggling to quantify and articulate the value of sustainable property investment.  The vast majority of investment decisions, even by sophisticated investors, are being made based on simple payback or simple return on investment (ROI) calculations.
Most investors, and many tenants, today understand that sustainable properties can generate health and productivity benefits, recruiting and retention advantages, and reduce risks, but struggle to integrate benefits beyond cost savings into their valuations and underwriting.
The failure by property investors to appropriately incorporate revenue and risk considerations into sustainable investment decisions has led to underinvestment in sustainability.
Today, with increasing government regulations and incentives and rapidly growing tenant and investor interest in sustainability, failure to properly incorporate value considerations beyond cost savings will increasingly result in sub-optimal financial results for investors. As a consequence, society will not be able to achieve its carbon reduction goals.
In accordance with its mission and the needs of the industry, the Green Building Finance Consortium (GBFC) presents Value Beyond Cost Savings: How to Underwrite Sustainable Properties, a book designed to assist private investors in making better financially based sustainable property investment decisions.

While strong progress has been made, the real estate industry is struggling to quantify andarticulate the value of sustainable property investment. The vast majority of investmentdecisions, even by sophisticated investors, are being made based on simple payback orsimple return on investment (ROI) calculations.

Most investors, and many tenants, todayunderstand that sustainable properties can generate health and productivity benefits,recruiting and retention advantages, and reduce risks, but struggle to integrate benefitsbeyond cost savings into their valuations and underwriting.3The failure by property investors to appropriately incorporate revenue and riskconsiderations into sustainable investment decisions has led to underinvestment insustainability. Today, with increasing government regulations and incentives and rapidlygrowing tenant and investor interest in sustainability, failure to properly incorporate valueconsiderations beyond cost savings will increasingly result in sub-optimal financial resultsfor investors. As a consequence, society will not be able to achieve its carbon reductiongoals.In accordance with its mission and the needs of the industry, the Green Building FinanceConsortium (GBFC) presents Value Beyond Cost Savings: How to Underwrite SustainablePropertiesValue Beyond Cost Savings – FOR EDUCATIONAL PURPOSES ONLY, a book designed to assist private investors in making better financially based sustainable property investment decisions.

What is a Sustainable Property?

1. Financial Perspective

Proper financial analysis of a property requires explicit consideration of the potential benefits that will accrue through meeting regulator, space user, and investor thresholds for sustainability.

The definitions that matter for a property are those used by regulators, space users and investors.

Regulators typically have a whole series of required thresholds in building codes and ordinances in order to meet their regulatory requirements and/or obtain incentives, while space user definitions of “sustainability might incorporate an environmental rating such as LEED, internal company energy efficiency guidelines, or broader measures such as the Global Reporting Initiative or Carbon Disclosure Project

The specific certifications/definitions required by regulators, users, and investors will vary dramatically by country, government level, property type, property size, tenant mix and other factors. Fortunately, while evaluating sustainable certifications from a financial perspective can be complicated, analyzing regulator, user, and investor requirements at the property level is a core expertise practiced for decades by real estate underwriters and valuation professionals.

2. General Perspective

While this chapter focuses on financial analysis, it is important to understand the various ways sustainable properties are described to provide background and perspective for interpreting how definitions/certifications influence value.

A general consensus has emerged on the fundamental attributes of a sustainable property. One of the earliest general definitions of sustainability was adopted in 1987 by the United Nations World Commission on Environment and Development (WCED), which defined “sustainable development” as “development that meets the needs of the present without compromising the ability of the future generation to meet their own needs”.

Another good succinct definition from the website is:

A sustainable commercial building can be defined as a building with planning, design, construction, operation and management practices that reduce the impact of development on the environment. A sustainable commercial building is also economically viable, and potentially enhances the social amenity of its occupants and community.

Mass transit orientation, community connectivity, and related land-use and planning issues are a critical component of developing sustainable communities and regions, as well as buildings. Sustainable building research and certification systems have historically not adequately addressed these types of sustainable concerns and issues, focusing more on property specific and/or technological issues. Recent changes in LEED have put more priority on site related considerations and organizations like the Urban Land Institute, a leader in the “Smart Growth” movement for years, continue to push these issues to the forefront.

Although there is a general consensus on the range of environmental outcomes that asustainable building should strive for, there is no consensus on how such outcomes should be achieved, measured, certified, or valued. Fortunately, traditional real estate underwriting and valuation methods and practices are well suited to deal with these complexities.

C. Sustainable Property Features

One way to “define” a sustainable property is by its combination of sustainable features and attributes, as illustrated in the outline of the key sustainable building features of a typical office property shown in Exhibits III-1. Sustainable certifications like LEED®, BREEAM (U.K., Europe), GreenStar (Australia), CASBEE (Japan), or Green Globes™ (US, Canada) can be achieved through adoption of a wide combination of differen sustainable features, processes and outcomes.

Select Sustainable Elements — New Office Construction

Sustainable Sites

• Optimal daylight exposure through building orientation

• Reflective roof surface to reduce heat island effect

• Brownfield or urban in-fill location

• Habitat restoration or open space preservation

• Bicycle and carpool parking

• Light pollution reduction

• Storm water management/treatment

Water Efficiency

1. Water-efficient landscaping

2. Low-flow lavatory toilets and faucets

3. Storm water retention systems for landscape irrigation

Energy and Atmosphere

• High efficiency HVAC system

• High efficiency interior lighting with daylight dimming and occupancy sensors

• High performance window glazing

• Photovoltaics or other on-site renewable energy

• Additional insulation

• Commissioning of HVAC and other systems

Materials and Resources

• Environmentally friendly construction materials (regional

renewable, certified, etc.)

• Waste management plan for diverting construction debris

Indoor Environmental Quality

• Low-emitting paints, flooring and carpet adhesives

• Daylighting and exterior window views

• Zoned heating and cooling

• Under-floor ventilation

• Operable windows

• Air intakes positioned away from pollution sources

• Enclosed, ventilated mechanical rooms

• CO2 sensors

Innovation and Design Process

• Integrated design and construction approach

• Expanded design team including energy modeler, solar

design expert, and commissioning agent