Posts Tagged ROI
“We now have the time and inclination to do things right,” this phrase was uttered by a client of ours, a construction manager, after the 2008 economic implosion of the real estate sector. The time portion was meant ‘unfortunately’ as few of us were as busy as we wanted, but what he was referring to was his firms move to Revit/BIM. It just did not make sense from a coordination or phasing point of view to work in CAD anymore because he saw the savings and potential advantages for his firm to move to Revit.
Now according the latest Smart Market Report from McGraw Hill BIM Adoption in North America has reached 71%; that’s up roughly 300% from 2007 when it was 28%. Give or take a few percentage points.
“I think there’s going to be a huge shakeout. Those who practice the old way are soon going to find themselves without work. Either change, get with this program or go out of business.” -Patrick MacLeamy, CEO HOK
Strong words, and I can’t say that the legacy tail of 2D is not a long one but the benefits of BIM are real, and if the reasoning for a firm not to make the move is simply, well we’ve always done it this way. It may be time to initiate a new planning regimen. Also in this report is information provided by JC Cannistraro, a MEP Constractor in Watertown, MA wqhich saw change orders drop from 18.42% when working with 2D CAD, to 2.68% with collaborative BIM, that’s as a percentage of total cost, and very real money.
Within the last week I have been called, e-mailed and gone out to discuss sustainable retrofits. The logic for it seems unassailable and I included some quick stats at the bottom of the posting. However, as with the rise of virtual construction this is starting to make more sense to most that this is a real economic opportunity. What’s the cause, not sure if it’s the natural progression as companies look for opportunities in this environment, a truck load of AARA and TARP funds have hit, the Clinton Climate Initiative is creating traction, or a lot of hemp wearing hippies have hit the boardroom, however I believe the first penguins have slid down the ice and the rest of the waddle / rookery / herd is starting to follow.
Additionally, more hard data points are becoming available to assist. The Empire State Building has started a massive $500 million renovation and hopes to reduce its energy cost up to 38% annually or $4.4 Million. ‘Wait, you say’ Even I know what looks like to be a 100 year payback seems insane, why spend the money.’ If you look more closely and as they point out at the website that additional improvements on already planned upgrades cost $13.2 million, so $13.2 million yields the saving and payback in less than 4 years. The Chicago Mercantile Mart and its 4.2 million SF of showrooms, offices and and tradeshow space earned LEED -EB (Existing Building) Silver. While a video of Kong climbing the Empire State could be more compelling I included the promotional video as possibly more informing.
Inside the video at about 2:05 they talk about energy modeling. I wish they included what they used to model it, but if we start talking about scenario analysis and ROI we start talking about BIM again, and various companion products like EcoTect and IES. One of the bigger points made is that the time to do these things is by piggybacking on top of already planned improvements. But from low flush toilets, to new digital controls, reglazing windows, to chiller retrofits new ROI models are inviting and this strategy/offering has to be, absolutely, be in your quiver.
Some data points I found while researching this post.
Excerpted comments from President Obama speaking at the Brookings Institute are as follows:
Speaking about AARA funds the President said “is put Americans back to work doing the work America needs done, doubling our capacity in renewable energy’
‘Clean energy projects will all be ramping up in the months ahead’
‘I’m calling on Congress to consider a new program to provide incentives for consumers who retrofit their homes to become more energy efficient, which we know creates jobs, saves money for families, and reduces the pollution that threatens our environment. And I’m proposing that we expand select Recovery Act initiatives to promote energy efficiency and clean energy jobs which have proven particularly popular and effective.’ Full Transcript Available Here
Buildings and Climate Change – Quick Stats:
- Buildings Account for 38% of CO2 emissions in the United States —more than either the transportation or industrial sectors
- Over the next 25 years, CO2 emissions from buildings are projected to grow faster than any other sector, with emissions from commercial buildings projected to grow the fastest—1.8% a year through 2030
- Buildings consume 70% of the electricity load in the U.S.
- Buildings have a lifespan of 50-100 years during which they continually consume energy and produce CO2 emissions. If half of new commercial buildings were built to use 50% less energy, it would save over 6 million metric tons of CO2 annually for the life of the buildings—the equivalent of taking more than 1 million cars off the road every year
- The U.S. population and economy are projected to grow significantly over the coming decades, increasing the need for new buildings – to meet this demand, approximately 15 million new buildings are projected to be constructed by 2015
- Building green is one of the best strategies for meeting the challenge of climate change because the technology to make substantial reductions in energy and CO2 emissions already exists. The average LEED® certified building uses 32% less electricity and saves 350 metric tons of CO2 emissions annually
- Modest investments in energy-saving and other climate-friendly technologies can yield buildings and communities that are environmentally responsible, profitable and healthier places to live and work, and that contribute to reducing CO2 emissions
Source: USGBC (US Green Building Council) and ASHRAE ( American Society of Heating, Refrigerating and Air Conditioning Engineers), the AIA, IESNA (Illuminating Engineering Society of North America) and the DOE.
Moral of the story, Sam likes it. Trolling through the variety of posts and discussion boards I came across this one about Is BIM the Future. And if we take a step back we should ask is 3D drafting the answer, which I think everyone would answer with a qualified yes. Working in 3D just makes everything faster, for presentations, for communicating with the clients, renderings, etc. Hell I even heard the comment that architects who would not touch CAD, are using SketchUP, and since they are SketchUP is gaining traction in the marketplace. BIM it is not, but communicating in 3D, it’s a snap and who wants to be against google. So if we are going to work in 3D, why not implement all these great tools and data which is essentially what BIM is. However, everyone is trying to jump, well not everyone, but most are trying to jump from a 2D world to try and fully implement BIM, and without getting your bearings in 3D first it’s a bit harder. Trying to implement a fully realized BIM, 4D-5D, Google-D, much tougher.
But still I think you got to get started somewhere, because the expectation is you will have to deliver BIM, even if a lot might not be able to define it, but at least 3D. Recently someone asked us for a proposal on 120,000SF building to an existing conditions / as built survey to which I gave him a quote, he then asked what file type to which I replied that it was for 2D CAD / Floorplans. He then said I’d like in Revit. To which I replied, that would be more. His response, “Why?”
It will be the the coming expectations of everyone out there, and what’s tough, even with the all the ROI Case Studies of spending more money on the front end, very few want to do it. We are very early in the process of selling BIM / Revit to the masses so education is still going to be a big part of it. To get back on topic, is the future BIM? Yup, but were going to have to do a lot more selling and educating for it to pay for the firms creating them.
Texas has now joined Wisconsin in requiring a BIM for new construction. I’ve inquired if there are any requirements regarding major renovations, like Wisconsin, and will follow up.
I wondered ho much of the green movement would get sidelined due to the tanking economy, and how much acceleration LEED certified projects will continue to get. Regardless of LEED though going green is proving to be cost effective, so effect on the bottom line are always going to get noticed. BIM allows option analysis from an energy perspective. You can perform solar analysis, heat gain/loss, options to replace glass with low-e, double paned, or triple paned, and run your ROI on a project by project basis. What is the payback by re insulating or upgrading the power plant is much easier calculated with a BIM. A recent article by Karl Heitman in the REournal goes on to say that you need to take into account the “embodied energy” in a building and that it would take 75 years of LEED Platinum Certified Building to repay the loss of tearing it down. So need to refit and reuse, create great projects with your existing conditions.
How you can capture existing conditions in a BIM format? So far, not so easy.
I the May/June Addition of Constructor Magazine, there are some excellent examples of Contractors using BIM. One high light was that over 1/3 responded with over 100% ROI. And more and more your finding contractors creating whole departments, aptly and somewhat spookily called “Virtual Construction Departments”. I guess I find it spooky in the sense that so many in the disciplines thought if you were not pouring concrete or putting steel up you were not adding value, however, with BIM we are starting to see a tremendous effort on the front end.
Gilbane Building in Providence found over 1,445 clashes in a 96,000 SF data center saving the owner over $800,000 in resolved issues. All in they believed they saved the owner more than $1,000,000 while investing only $63,000 in BIM expenses. Half of which was creating a BIM from 2D documents, etc.
Great Stuff, Read the Article.
So I am reading this article on ‘GM Embraces BIM‘, and wondering if I should post it, becuase, well, GM has had better days, but the points they made such as “…GM estimates that they are able to construct a building 25% faster, saving 10-15% of construction cost. And they can do this much safer than in the past, setting industry records on safety.” Is worth mentioning.
I have been reading a variety of articles recently that mention laser scanning, including this one, matter of factly, on how to capture the built environment in BIM, when in fact it can be a time intensive and laborious practice. While we are looking forward to the day when anyone can walk into a room and wave a wand and have a BIM pop out you need to look at the technologies available today, they type of project and what your deliverable needs to be to make the most informed decisions. Many times using PPLT (Point to Point Laser Technology) can be the most cost effective option.