This article is for engineers who are intentional in navigating through the complex of commercial construction, and the way forward on how to squeeze every bit of value from tight budgets and aggressive timelines is a daily challenge. The pressure to deliver projects on time, within budget, and with flawless execution can feel overwhelming, especially when unexpected costs and delays threaten profitability. That’s where Building Information Modeling (BIM) steps in, not just as a tech tool, but as a game-changer that transforms how decisions are made and resources are managed. By maximizing ROI through improved accuracy, collaboration, and efficiency, BIM helps engineers and project teams cut waste, anticipate problems early, and drive smarter, faster project delivery. Understanding the key financial benefits of BIM adoption isn’t just important, it’s essential for staying competitive and profitable in today’s demanding commercial construction landscape.
This will be a full series of articles on the ROI of BIM for construction, which I encourage you to read and follow closely. After finishing this first article, be sure to scroll down and continue with the rest of the five-part series. Let’s get started with Series One!
So let’s get started. We’re going to go over the fundamentals, a little bit about my experience and how I got interested in this whole decision to support the financial analysis business. We’ll talk about the science of return on investment. We’ve actually got 19 benefits, and we’re going to focus on nine of them today. We’ll have a perspective on fee and profit for the contractor but also on savings for the owner. We’ve got some metrics on overall savings, but we’re going to dive right into how those metrics are generated, what’s in it, what’s not.
Unquantified Benefits of B
There are some benefits of B that really should be considered. They won’t be considered today. You may use B to save lives. We don’t try to put a dollar value on that. You may use B to win work. Today, we won’t put a value on that.
Importance of Design and Engagement
We’re going to talk about how key the design is and how it triggers these dominoes, either success or failure. It is so much of the building block on everything else that turns into success on your project. In terms of engagement, we’ll take a little while to say, if you have now justified the cost of B and you’re targeting Bim in the right way, how do you deal with the people that are going to have to change the way they’ve been working? Introducing tension and challenge into a culture, how do you do that to make it fun and achieve your targets?
Relationship Development and Understanding Context
We’re going to be focusing on this middle section of this relationship development, the phases that I like. With Andy, I understand this particular customer, the kind of projects he’s doing, the budgets. If I’m going to help Andy in a workshop and his people, I like to really make sure that I understand: have they had good performance? Have they had any problems in the past with this particular customer, this particular geography, or the teams they’re working with? Is there some urgency to the projects? I like to have the workshop.
Gaining Executive Support and Setting Performance Targets
The third phase would be talking about the initiative and the personnel that you have, getting executive support for this. Maybe proving not only doing Bim but setting performance targets for Bim and measuring against that performance, how to make it feel like it’s coming in phases, you’re achieving things, and making it fun.
Personal Journey into 3D and Project Engineering
I’ll briefly go over my experience, what got me so interested in this, starting way back in the 70s when I started my field engineering career. I was building in 3D, doing layout and control. When I moved into some of my larger projects, like in hydroelectric power, it became really evident that I could be a better project engineer or field engineer if I could just get this three-dimensional stuff down. I did a bunch of stuff for a bridge. I kept my XYZ coordinates on an old calculator. For our projects in Houston, our water and wastewater plants, we did hand-drawn three-dimensional images.
First 3D Models and Expanded Use Cases
I finally got to do my first three-dimensional C model on a hydroelectric project in New Hampshire. I began to see that the field enjoyed this. Our specialty contractors enjoyed this. The drilling and blasting enjoyed having it in 3D. The concrete and prefabricated forms enjoyed the 3D. It became an explosion of potential value. We used it in Euro Disney, the roller coaster near Paris. This is the project where I met Andy for the first time in Massachusetts. We did our first crew four-dimensional modelling in Boston, the New England Aquarium. We found clashes back in 1997. We used it to plan safety and security for the Museum of Fine Arts here.
Global Exposure and Momentum in the Industry
The workshop has gone around the world. It’s been a fun ride to travel and meet elite construction professionals around the world. There’s no question, what we see out there is a real transformation. It’s driven by the financial impact, but there’s a lot of momentum out there. It’s also spotty. It takes off in a certain geography. A lot of people ask me to help explain return on investment either to their owner or to their executive. They want it simple.
Global Variation and Executive Hesitancy
When I go around the world, I see a broad spectrum of maturity. It takes a while to get up to speed. I also see this internal conflict in organizations. Executives are often standing back, not really wanting to put the pedal down on this. More than anything else, I feel like I have a library of research that’s very powerful. But when I present the research, it seems like nobody has read about this stuff.
Lack of Sophistication and Data Use
That may be overstating it. Again, there’s a wide spectrum around the world, how many people have really looked into what happens to your performance when you invest in B. In terms of goals for the company, I see that they’re very simplistic. I do not see a lot of sophistication around the world in setting real performance targets backed up by predictive indicators. I also see just the beginning of harvesting the performance possible from big data.
Explaining ROI and Project Complexity
We won’t spend too much time talking about what people really want when they ask me, I’ve got an executive, an owner, and we need to invest in B to get the financial benefits. But they see the investment; they don’t see the return. The complexity comes from the fact that every project is different. Every contract is different. Every group of stakeholders has its own personality and level of expertise. On some projects, prefab is a great opportunity; on some, it’s not. Sometimes the owner is very much in the game and understands that there’s real potential financial savings downstream, in the operations and maintenance phase. But some aren’t even ready to leverage Bim to harvest that.
Purpose of the Workshop
The workshop is really designed to uncover all this and then look for where the real money is on each individual project. Today will be a simulation of a workshop. Andy and I have already gone through all the calculations.
ROI Workshop Emphasis
The ordinary workshop has a set of rules. In general, when I talk about return on investment, I emphasize these three highlighted things: this is not about products. We spend four hours together, and we just talk about the financial benefits, how much, what the research tells us, and who is going to enjoy that benefit. We emphasize research because this is not about my opinion; it’s about your opinion. In the workshop, participants are looking at the research and saying, this is what we did or this is what I think we will be able to do.
Discipline and Hard Work in Workshops Based on Global Research Backing and Origin of ROI Insights
I also emphasize discipline. Going through the workshop is very hard work. You’ll see today, it will be difficult for you to hang in there as we talk about all these different numbers and research figures. If you’re ready to work, a workshop is a good way to go the total library that I have is 80 studies I’ve got a few listed here they’re from around the world Stanford University is definitely one of the strongest in the world and the center for integrated facilities engineering but from Texas to the UK University of Southford Israel Maryland Southern California Canada University British Columbia and the Netherlands there’s evidence coming in from all over the world that you can use that helps you with this with your analysis and it will help us today.
The UK Mandate and the ROI Formula
So let’s look at one of the most powerful single metrics that’s out there in my mind right now it comes from the UK the UK is just really starting to mandate as a government B on all projects over 50 million soon to be 5 million pounds and they’re under pressure to explain what’s going on here you’ve been implementing B what they’re expecting is a 1% cost so if we have 100 million pounds of work or 1 million dollars worth of work you’re going to have to invest a million dollar to get Allin bam benefits but the net savings is 5% so you invest 1 million and you get six million back in terms of financial benefits now if that’s true and I think it is and we’ll see today if Andy’s evaluation is going to come in that range if that 5 million dollar is actually going to come back to us that tells us we should really understand what’s going on.
Doubling On-Time and On-Budget Delivery in the UK
The next thing that is really amazing about the UK’s experience is that they have doubled the percentage of projects that finish on time and on budget they’ve got 400 billion pounds now being delivered on time and on budget it used to be 33% now it’s 66% and so this news is probably one of the fastest Global messages in my mind.
Industrial Case Study with 10% Cost Savings
Let’s go to an industrial project this one is a 100 million project they took the time to model after the design was done and they found 500 serious problems in the design not just becomes of clashes but walking through with the operation staff and after the project was completed they calculated 10 million dollar cost savings so this is 10% so we’ve got 10% here also 99.8% coming in from a project in the UK.
99.8% Cost Savings and Stanford Research Insights
At the Endeavor house so this is an office building it’s on a airport property independently audited showing a 99.8% cost savings so and from Stanford the university this is a study of 32 different projects a savings of up to 10% of the contract value through Clash detections so we’re going to come back to this but let’s just ask the a good question the savings that we’re talking about here is designning construction costs and so what we’re going to do today is also ask the question how much savings can happen if we set the stage when we do the design and construction and deliver an intelligent model set up for Downstream use during operations and maintenance.
Real Cost Savings and Long-Term Benefits of BIM in Design and Construction
San Diego Lifecycle ROI and the 15% Potential
This analysis done for the San Diego Community College indicates that they expect to save a total of 14.7% of when they include the life cycle savings so these are extraordinary numbers so this would indicate that we might be able to save 5 to 10 million on aund million project but we may save when we add up the net present value of those savings over the next 10 or 20 years we may be able to get to 14 or 15% so great big numbers great big exciting potential value that we might be able to harvest how can we go after that is there more are we just getting started are we getting 5% now.
Workshop Focus and Selection of Key Metrics
So the workshop has 19 benefits they’re listed here if you we want to be expedient about today we’re just we’re going to pick a segment of those and that we’re going to focus first on design so just some quick metrics from the research if you take a look at if you pick one word to Define what’s the most important thing for B that’s where the where the money we’re going to harvest it’ll be for the owner it will be operations and maintenance but for the whole design and construction team it will be about rework.
Root Causes of Rework from Design Failures
So a great piece of research comes from fak identifying the this is a causal diagram of root cause what are the root causes of rework and I picked some out that I call the The Dominoes of failure they one causes the other and they create an avalan of rework and they all stem a lot of them stem from design so this study going back to the 1990s I think is still true today 79% of the problems originate in the design phase and cost as much as 12% of the contract amount so this would be a very powerful Source or Target if your Bim implementation can go after that 12% of rework.
Contractor Losses from Rework and Profit Drain
Another study comes from Chelson rework costing 4 to 14% of the direct cost of work and the contractors spend up to 30% of their profits on reworking errors a newer study I’m going to skip this one with we’ve made our point so The Dominoes of failure if we take a look at design and we’re going to take a these are basically design it could be in our data collection we have problems when we use 2D in thinking 2D in communicating.
How Coordination Failures Lead to Chain Reactions
Now we have incomplete coordination we have erors missions in the that go out to bid to the subcontractors they generate requests for information some of those just cost 1,000 or 500 to get all the answers back but some of them turn into change orders of course some of those are preventable change orders those cause rework if they especially if they arrive late in the field that causes delay the delay causes acceleration and second shift second shift and acceleration is where we get a lot of our injuries and our claims and our blaming.
BIM Expectations in Contracts and Regional Implementation
maybe curtain wall it is a it is a very Bim Centric approach everybody’s expected to perform using those tools including things like collocation so that’s the the general format is and it’s subcontractors that are we’ve worked with many times before we know what to expect they know us we all know how each other works so we they expect to have to do bam Bim submissions absolutely intelligent and so it’s right in your contracts it is all that’s in the contracts and in the Boston area
you’re is been basically understood it do you ever do a project without B I couldn’t I not in the Boston Cambridge area now I couldn’t imagine it no you just the whole geography has basically mov through so right around the world around the country Boston is is a kind of a unique place I think it’s Northern California the Bay Area is also very very Advanced Denver’s Advanced
but they’re they’re a parts of the country country where in parts of the world that that Bim has not moved as far along so what I’ve asked Andy to do is to compare the two-dimensional way to the modern to this all-in Bim way harvesting as much as possible even though his projects have really become very very mature and they may be harvesting 40 60 80% of them but but the Bim c potential but we’re we’re now going to analyze the ultimate potential in these areas
okay and this is a 500,000 sqt facility approximately more or less right okay so we would as part of the analysis we would fill out these these U budget categories focusing particularly on General conditions labor and and contingency and and we acknowledge that if the owner can come in help us understand how they might their their current cost of operations and maintenance and then we use the research to to generate that it’s a great thing to have an owner in in the workshop and have the owner’s input
so everybody would would brainstorm a little bit looking at where the numbers are okay you put your $250 million project together let’s take a look at where the money’s bent going and take a look at where the waste might traditional traditionally reside in a two-dimensional environment so design it’s huge this is a research piece that comes from University of Southern California.
In the next article, we’ll continue exploring this topic in depth series don’t miss the next article in this series. We’ve only scratched the surface, don’t miss the next part where we dive even deeper into full Benefits of Using BIM Over 2D in Construction and Design Projects: Solving Common Field Challenges to Improve Project Accuracy, Coordination, and Delivery(Series 2)