Benefits and costs in a BIM business case

Paul Sancandi
March 18, 2013

This article follows on from The project manager’s business case for BIM.

The implementation of building information modelling (BIM) should be considered an investment into an organisation’s future. Just like any investment, a cost benefit analysis should be performed to ensure that it is a sound investment. A cost benefit analysis sets the financial and non-financial cost of implementing BIM along with the anticipated benefits. The cost-benefit analysis also shows the anticipated return of implementing BIM.

The analysis answers the following questions:

  • What are the benefits/income from BIM?
  • What are costs of implementing BIM? This includes both initial and long-term costs. It should also include a possible funding source for the investment.
  • What are the major risks associated with BIM implementation?
  • What are the major assumptions of this analysis?

A benefits analysis specifies the expected financial and non-financial returns from a given project. It compares ‘with’ and ‘without’ situations. The results of this analysis can be used to evaluate alternative options. It can strongly support a bid for management endorsement and resource allocation.

Some potential benefits that should be calculated based on the organisation’s planned implementation are:

  • Improved project outcomes such as lower cost and shorter duration for project execution
  • Streamlining of processes/reduced process time
  • Improved quality of information
  • Improved interoperability of data
  • Reduced human error
  • Reduced data entry time
  • Centralisation of information

The budget should include all identifiable costs to the organisation, including staffing, software, legal, media, travel, physical resources, etc. The source of the funds should also be considered; is it an existing available fund or are new and additional funds required?

Some items to consider include:

  • Cost for planning: BIM champion(s) (percentage of time allocated * salary for allocated timeframe); planning team costs (percentage of time allocated * number of personnel * salary for allocated timeframe)
  • Personnel: New/reallocated personnel ($/year including taxes and benefits); education and training cost ($/course necessary); miscellaneous expenses (travel budget, etc.)
  • Infrastructure: Software—software purchase($/license), software maintenance fees ($/license/year); hardware—workstations ($/workstation including accessories), hardware infrastructure ($/infrastructure item), infrastructure maintenance costs ($/year)
  • Process change costs: inefficiency expenses (if applicable); learning curve

Risk in a BIM business case

Performing a risk assessment is critical when developing a business case for BIM. Like other changes in work process, the integration of BIM within an organisation has risks. The steps of creating a BIM risk assessment include:

  1. Risk identification
  2. Risk evaluation including likelihood and impact
  3. Risk mitigation
  4. Risk summarisation and recommendation
  5. Risk assessment review and update

There are a number of risks that need to be considered when planning the implementation of BIM within an organisation. Some of risks of Implementing BIM include:

  • Lack of stakeholder participation
  • Legal concerns
  • Security of BIM data
  • Model management is too demanding
  • Lack of standards
  • Lack of interoperability
  • Data ownership
  • Data accuracy
  • Learning curve
  • Cost overruns
  • Schedule overruns

This list is just a starting point for the risks associated with BIM implementation. Risks should also include the risks associated with not implementing BIM. Organisations should identify risks that are particular to their organisation and circumstances.

Currently, there is little data on the cost and benefit of implementing BIM within an owner organisation. Therefore assumptions of the cost and benefit analysis must be documented. Each item is listed in this section.

The implementation timeline is an overview of the transition plan to building information modelling. It should include milestones and major objectives if the organisation moves forward with BIM implementations.

The final recommendations include the conclusions that can be drawn about the business case for the implementation of BIM within the organisation. The recommendations should include the key factors that need to be considered when determining the validity of the business case. It can also include highlights from the other sections of the document to support the business case for BIM.

Appendices include information that supports the business case for BIM with the organisation. This information is often too detailed for the body of the business case, but is necessary for the analysis. It also helps to show the level of effort that went into creating the business case. The appendices could include items such as the strategic plan, the organisational execution plan, a project execution plan, procurement documents, detailed financial analysis, definitions of terms, and other documents to support the business case.

Throughout the planning process, the elements of the execution plan need to be documented in a central location to which the entire organisation has access. There are several purposes for this. They include providing openness about the transition process, providing resources for the organisation to use, and more importantly providing objectives for the organisation to work towards.

The plan could be documented in a static document. However, it may be better to have it on a website or organisation wiki site that can be modified and updated as the organisation modifies its Organisational Execution Plan. It is important to remember that the organisation execution plan set forth is a living document and may need to be adjusted as BIM technology and the organisation evolve.

Author avatar
Paul Sancandi
Paul Sancandi is a senior design manager with InfraSol Group. He has a technical background as a structural engineer, owned an architectural and engineering practice and has worked in Australia, Asia and the Middle East on a wide range of small to mega projects over the past 32 years.
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