BIM ROI: Small Firms Can Save Money, Too

May 3, 2018

Sarah Lorek

If you’re running a small construction firm or detailing shop, BIM and all its related technology are certainly on your radar. If you haven’t already invested in the software and/or training required to begin using BIM in-house, there’s a better-than-average chance you’ve paid someone else to do it for you— at least to complete a job or two.

There’s no arguing that BIM dominates the future of construction. And, increasingly, it’s becoming a must for firms who want to remain competitive. But, it’s also understood that adopting BIM requires a costly investment in both tools and time. As a result, many small firms still hesitate to jump in because they worry that ROI from adopting BIM could be slow, or never come at all.

Reality belies that concern, though.

Let’s look at some down-to-earth stats and anecdotal evidence that supports the ROI value of adopting BIM for even the smallest construction firms.

First, though, a story...

June 12, 2009: The Day the Antenna Died

Do you remember, back in 2009, when the FCC set a date (June 12th) on which all television broadcasters were required to power off their analog transmissions and only transmit digitally from that point on?

Prior to the looming deadline, adoption of the highly superior digital technology had been slow and steady for years. This seemed like “business as usual” for consumers who could generally choose between analog or digital for nearly every channel they wanted to watch. But, behind the scenes, it created havoc and tremendous expense for the industry as two competing technologies had to be developed and maintained simultaneously. And, since TV channels are for-profit entities, the inevitable costs that come with that level of inefficiency were passed along to consumers in the long run.

Then, in the weeks leading up to the FCC’s deadline, the purchase of digital-ready televisions and converters skyrocketed (since no one wanted to miss an episode of “Lost”) until just 2.5 percent of American households lost the opportunity to tune into their favorite episodes on June 12th. Within the next three months, all the holdouts had adopted the new technology, and all the time, effort, and money that had gone into supporting the antiquated analog transmission system was reallocated to boosting signal strength, expanding reach, and improving programming quality and variety.

To summarize, killing the antenna made the world a better place. At least, from a TV fan’s perspective.

So, what does analog TV have to do with BIM?

We’re at a very similar stage in the construction industry as television was in 2009.

The bulk of the industry has already adopted BIM technology, which has proven itself superior to 2D CAD in nearly every respect. Today, 72 percent of American construction firms are believed to be using BIM technologies for significant cost savings on projects. As far back as 2003, the US General Services Administration (GSA) established the National 3D-4D-BIM Program, which mandated BIM adoption for all Public Buildings Service projects. Many state and local governments have followed suit across the nation, as have many other countries.

Still, to this day, the industry is supporting existing and emerging BIM technologies while being forced to maintain more antiquated 2D drawings throughout the construction workflow. The result — as it was with television before 2009 — is widespread inefficiency and cost overruns that impact nearly everyone.

While there’s no sign of widespread governmental regulation sweeping in to enforce complete BIM adoption, industry pressure is certainly leaning in that direction, with many contractors, fabricators, and customers choosing to only accept 3D BIM designs for their jobs. This necessitates every construction firm to either move toward BIM adoption, or miss out on future opportunities.

Why 3D beats 2D any day of the week

For those firms that are still on the fence, balking at the cost of adopting BIM, the following stats and comparisons should help illustrate the clear superiority of 3D modeling and, hence, the reason behind the situation described above:

BIM reduces errors...

Creating construction models digitally in 3D reduces the number of errors and omissions in construction documents. Since all aspects of design can be contained in one universal model, there is less room for human error in repeating the design from various angles over numerous drawings. And, powerful modern BIM software can often identify and highlight potential errors in design that may not be noticed when using less sophisticated drafting technology.

… and catches errors earlier in the process

Virtual design and construction (VDC) using 3D BIM models has proven more effective at identifying problems earlier in the building process. This translates to less rework in fabrication and on the job site, and fewer unexpected change orders or delays due to restocking issues.

47 percent of all users chose this as a significant benefit of having adopted BIM, particularly contractors. The more experience contractors have using BIM, the more they appreciate this particular benefit, with 77 percent of expert users choosing “reduction of rework” as the biggest benefit of BIM adoption.

BIM enhances project planning accuracy

The inherent universality of a 3D model makes it the ideal project planning tool for every phase of the construction workflow, from initial estimating and budgeting to post-project analysis. The model offers a more nuanced understanding of the work ahead, a better picture of the budget, and a deeper view of the necessary logistics.

After error reduction, this aspect of BIM’s benefits appealed to more of the experienced contractors surveyed — with 22 percent touting the technology’s greater cost predictability, 21 percent indicating it gave them a better overall understanding of the project, and 16 percent highlighting the improved scheduling capabilities the 3D model afforded.

With these core benefits of BIM in mind, how can investing in it produce real ROI, even for small firms?

How BIM fosters ROI

The same reports highlight a number of ways that even very small firms have been able to yield an impressive return on their investment in BIM technology and training in recent years.

Overall, a full 65 percent of contractors surveyed indicated a positive ROI from their adoption of BIM, with more than a quarter of that number claiming a return of 25 percent or more. Of the remaining 35 percent of respondents, many had to admit they were not effectively tracking ROI, so could not give a satisfactory answer to the question. About 15 percent indicated they have at least broken even, and less than 5 percent claim they’ve failed to recoup their investment in this powerful technology and process.

To recap, here’s a summary of the benefits of BIM that translate to positive ROI for most users:

More effective marketing - Being able to present prospects with a visually stunning 3D model in lieu of the same-old mockups can be an impressive differentiator — especially for smaller firms. If most of your competition is still using older technology, the “wow factor” alone could win you more jobs.
Closing more deals - 3D visualization not only impresses prospects, but it can more accurately and effectively convey your ideas in a plan. Humans naturally interpret 3D images more readily than their 2D counterparts, especially those with no special training in traditional 2D building design.
Level the playing field - By adopting BIM, smaller firms can more effectively compete with much larger firms for bigger clients and projects. Without BIM capabilities, many larger jobs and clients are not even an option. According to some sources, as many as 80 percent of high-engagement general contractors (those who use BIM tools for more than half their projects) require their MEP subs to supply BIM models as well.
Build client trust - Working with 3D models provides your client with the most accurate mental image of the finished product. This accuracy extends to materials purchasing, fabrication, scheduling, and more. This improves the client’s level of trust in your estimates and recommendations, which, in turn, leads to more returning customers and positive referrals.
Work more efficiently - The Connecting Teams study highlights that most project teams using BIM processes experience reduced project error (61 percent), reduced time required for communication (55 percent), greater project visibility and client input (52 percent), and higher quality projects (52 percent). 3D modeling shortens the feedback loop across the board and eliminates the potential for errors inherent in every copy of drawings made by a human detailer. All of this translates to faster, higher quality projects that cost less and are worth more.
Avoid outsourcing - Many smaller firms bridge the gap by outsourcing their BIM needs as they come up. This is certainly a better option than trying to ignore its need in today’s construction world, but outsourcing brings some negative aspects with it as well. For example, outsourcing can be expensive, managing an outside BIM professional or freelancer can prove challenging, and it’s far easier for miscommunication to result in errors.

So, if you’re currently running a small construction firm, have you already started moving toward BIM adoption? If so, we’d love to hear how it’s going in the comments below. If not, why not? Do you plan to do so in the near future?