Return-On-Investment On Building Information Modelling (BIM)

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Return-on-investment

on Building Information
Modelling (BIM)
From a cost factor to sustainable
profit growth

White paper

Abstract
Despite BIM’s potential to improve revenues and efficiency in the construction industry, many still hesitate to use
it. However, it requires a fundamental rethink of the way of working and should be demanded as a standard by all
stakeholders. This white paper uses a state-of-the-art construction project case study to show the positive impact BIM
can have on both construction and operating costs.

TÜV SÜD
Contents
Introduction 4

Project introduction and analysis of the profitability of BIM over time 6

Drivers for result improvement through BIM 8

The potentials from the perspective of the stakeholders 10

Summary and outlook 11

What are the implications of these challenges for your company? 11

About TÜV SÜD Advimo 12

About Horváth 13

About TÜV SÜD experts


Alexandra Massuthe
COO, Real Estate and Infrastructure, TÜV SÜD Advimo
As the Head of Operations at TÜV SÜD Advimo, Alexandra is responsible for the
implementation of operation excellence in the company as well as business models of the
future, including BIM and sustainability consulting and management. With over 10 years
of experience, Alexandra specialises in the development and successful implementation
of new, especially digital, business models. In her eight years management role in the Real
Estate & Infrastructure division, she had successfully built up TÜV SÜD Real Estate testing
segment in Austria.

Matthias Mosig
Head of Digital Transition, Real Estate & Infrastructure, TÜV SÜD Advimo
As the Head of Digital Transition at TÜV SÜD Advimo, Matthias focuses on process
consulting as well as IT/CAFM consulting for Real Estate and Facility Management. A
key aspect of his work in recent years is expanding the range of BIM Consulting and BIM
Management services. As a member of working groups such as Real FM, GEFMA and
ZIA focusing on BIM, digitalisation and CAFM, he takes an active part in interlinking and
implementation of standardisation in planning/building and operation.

2 Return-on-investment on Building Information Modelling (BIM) | TÜV SÜD


About Horváth experts
Jana Bienert
Managing Consultant, Construction Industry Team Member
As a member of the Construction Industry Team in the Competence Center of Industrial
Goods and High Tech at Horváth, Jana focusses on performance management and
reporting, making the digital transformation visible and measurable. With a Master’s
Degree in Global Management, she brings profound knowledge in cost and profit
accounting, a global perspective and disruptive approaches proven in multiple
international projects in different industries.

Leonie Dowling
Senior Project Manager, Head of Construction Industry
In her role as the Head of the Construction Industry at Horváth, Leonie is an expert for
business transformation. She applies her deep experience from the construction and
building materials industry in areas such as process optimisation, strategy development,
sales and pricing to steering concepts. She has a Master’s Degree in International Business
and is a certified SCRUM master with a broad professional background in the industry.

Dr. Stefan Zeibig


Partner of Competence Center Industrial Goods and High Tech, Construction Industry
As a Partner responsible for Industrial Goods and High Tech and the Construction Industry
at Horváth, Stefan has more than six years of industry experience and more then ten
years of consulting expertise. His profession focuses on the integration of management
control, controlling processes and systems and has been proven in various projects such
as business transformations with SAP S/4HANA, production controlling and the global
manufacturing footprint optimisation. This makes Stefan an absolute expert in the area of
performance management.

Dr. Ralf Sauter


Partner of Competence Center Industrial Goods and High Tech
As Horváth‘s Partner for the Competence Center Industrial Goods and High Tech, Ralf
drives the development of strategic, organisational and corporate steering topics across
the different industries and branches. Ralf has a PhD with a focus in manufacturing and
materials as well as controlling and finance. He has extensive knowledge accumulated
in his 25 years at Horváth in the areas of consumer goods, machinery and plant
manufacturing, the construction industry and the automotive sector. Throughout this time,
he has accompanied the transformation and redesign of multiple players in the building
material, construction and building technology sectors.

TÜV SÜD | Return-on-investment on Building Information Modelling (BIM) 3


Introduction

Increased complexity and a continuing construction boom with comparably


low productivity development in the construction industry
such as the manufacturing industry, construction industry, which has
productivity increases have been prevailed for several years, has so far
Productivity in the achieved through standardisation of been only slightly dampened by the
construction industry production processes, continuous Corona pandemic. The construction
improvement programs, automation boom, combined with the increasing
has barely changed in of production, integration of the value complexity of buildings, constant cost
recent decades. chain and knowledge management pressure, the general shortage of
among skilled workers. Meanwhile, skilled workers and the associated
digitalisation and process efficiency quality problems are creating a
Productivity in the construction in the construction industry are constant demand for efficiency in the
industry has barely changed in recent progressing at a slow pace. The successful completion of orders from
decades. In other economic sectors, good economic situation in the all parties involved.

Building Information Modelling - The heart of digitalisation and the basis


for improving sales and earnings in the construction industry
Building Information Modelling the associated methods, processes construction phase to operation
(BIM) has been at the centre of and organisational frameworks are and demolition. When BIM is used,
digitalisation in the construction structured. Information and designs numerous levers are available for
industry for several years. With BIM, are linked and integrated into a improving results through increased
a virtual model of the building is structured model used by all parties sales and efficiency, as well as cost
created over its entire life cycle and involved, from planning through the reductions.

Many parties in the construction industry still hesitate to use BIM


While more and more construction successively enriched. The initial engineering offices in particular are
players are using BIM, there are investment in BIM due to labour and reluctant to do so, while larger general
still many concerns about applying material costs, the uncertainty of the planners, general contractors and
and testing the methodology in a contractor’s ability to deliver on the general subcontractors are already
first project. The implementation client side, a non-uniform system relatively advanced in this respect.
of BIM requires a rethinking of the landscape and lack of standardisation However, the slow progress of BIM
fundamental way of working, and among the participants, as well as the dissemination is also related to the
leads to an integral planning in which cultural change that in some cases low demand for BIM projects on the
effort is shifted into early phases of has not yet taken place, continue client side. This, therefore, leads to
the project. This is the case because to keep many players from fully a vicious circle that can possibly
information relevant for planning, integrating BIM into their upcoming be broken by company-internal and
realisation and operation of the construction projects. TÜV SÜD’s public funding projects.
building has to be integrated into experience shows that smaller
BIM from the beginning and is then and medium-sized planning and

4 Return-on-investment on Building Information Modelling (BIM) | TÜV SÜD


FIGURE 1: LEVERS FOR IMPROVED RESULTS IN THE CONSTRUCTION INDUSTRY

INCREASE IN REVENUE INCREASE IN EFFICIENCY REDUCTION IN COSTS

New business models Material savings


Time savings
Establishment of data-based business Less waste due to more precise planning,
In planning and executing projects
models correct materials

New Services Fixed cost savings


Improved workload
Establishment of range of data-based Efficient work flow, fewer defects, less
Optimised resource planning and control
business models rework

Improved customers interaction Efficient cooperation Improved safety


Increased quality of advice Through collaboration on model Better coordination, more transparency

Contract capacity
Higher customer satisfaction Reduced risk
More capacity due to faster defect-free
Securing existing customer business Lower time, budget and quality risk
execution

The public sector intends to increasingly establish BIM in the DACH region
Currently more and more pilot projects projects in the infrastructure sector construction projects in Germany
with BIM are being executed and have started with a first BIM step-by- will be implemented using BIM. In
standardisations are systematically step plan from the Federal Ministry of Switzerland, the digitalisation of the
being established, both nationally and Transport and Digital Infrastructure. construction industry is a fundamental
internationally, e.g. ISO 19650. Due The projects have focused mainly part of the government’s digitalisation
to cost pressure and the investment on Deutsche Bahn. Since 2020, strategy. The Swiss Railway (SBB)
backlog in the modernisation of the Federal Ministry of the Interior plans to consistently use BIM
construction in recent years, the together with the Federal Defence methodology for all its real estate and
public sector is now using the Ministry have been developing a BIM infrastructure projects. In Austria,
chances of digitalisation in planning, implementation strategy, including on the other hand, the legislator has
building and running a building. BIM BIM project templates for the entire so far refrained from making BIM
development began in December federal construction program. From mandatory.
2015, and since then various pilot 2022 onwards, about 6,000 federal

The question remains: How positive is the impact of BIM on projects, and
who can benefit from the investment?
It is apparent that the construction there are potentials for both building transformation of organisations,
industry is moving in the direction of a owners and construction companies. combined with the core competence
widespread use of BIM. Nevertheless, of business management and
its implementation and usage ultimately In the cooperation of TÜV SÜD and performance optimisation, to present
depend on the economic feasibility Horváth, we can draw on relevant a picture that is based on practical
of an investment in BIM. Particularly project experience in consulting and experience regarding the key drivers
in the phase of digital transformation realisation of BIM projects, industry- of return on investment (ROI) for BIM.
in which we currently find ourselves, specific know-how, expertise in the

TÜV SÜD | Return-on-investment on Building Information Modelling (BIM) 5


Project introduction and analysis of the
profitability of BIM over time
A state-of-the-art new construction The example project is a new TÜV In addition to the exemplary project
project of TÜV SÜD is the centrepiece SÜD building, which was completed in that has already been completed
of an analysis of the profitability of an 2018 with approximately 37,250 m² of without BIM, TÜV SÜD will have
investment in BIM based on a driver gross floor space above ground. The the opportunity to carry out this
tree. planning phase for the building took comparison with another building with
about 2 years, while the construction similar underlying conditions and the
To answer the question of how phase needed another 2 years. The use of BIM methodology right from the
positively BIM affects projects, lifespan of the building in the analysis start.
and for whom an investment in is assumed to be 35 years; demolition
BIM is beneficial, we have applied costs are not included in the analysis. Since the second new building is only
established empirical values of in phase three, the actual figures for
the potentials of a use of BIM to a Testing the economic feasibility planning, construction and the first
selected project. The effect of BIM with and without the use of the BIM operating phase of the example project
on revenue and cost in the individual methodology on one and the same were used for this profitability analysis
phases of the building’s life cycle was project is impossible, as this would and compared to the theoretical
examined in detail, using a driver tree require constructing and comparing savings potential of using BIM.
of cost and revenue drivers. a building both with and without BIM.

BIM leads to a shift of efforts to earlier stages of the object’s life cycle
In order to evaluate the positive FIGURE 2: LIFE CYCLE COSTS OF A CONSTRUCTION PROJECT
effects shown in the analysis, it is
first necessary to consider the cost Construction costs (EUR thous) Utilisation costs (EUR thous)
structure of the building. Typically,
when distributing the life cycle costs Literature 20% 80%
of a building, it is assumed that the
operating costs account for about 80 Without BIM 65% (124,400) 35% (68,376)
percent of the total costs of a building.
The presented object shows that this
is not always the case, as the majority With BIM 69% (91,485) 31% (40,603)
of the costs (about 65 percent) are
attributable to the design/construction
phase and the smaller share (about the potentials that can be realised costs is achieved in the much longer
35 percent) to the operating phase. with BIM. This shift is due to the fact operating phase. In the case of using
With the use of BIM, this effect is that higher initial investments, such BIM in the example project, the costs
intensified and the costs of operating as more energy-efficient technical would have shifted proportionally even
the building only account for a share building or construction concepts, more to the construction phase, due to
of about 31 percent of the total costs mean that costs are higher at the further savings in the operating phase
in the example project when applying beginning. A considerable reduction in generated by BIM.

6 Return-on-investment on Building Information Modelling (BIM) | TÜV SÜD


An investment in BIM amortises in the short term, but the relevant effects
appear in the medium and long term
The analysis of the sample project planning phase are relatively small, an the short term due to the high savings
shows a 67-fold ROI that can be investment in BIM will pay for itself in in construction costs.
achieved with an investment in BIM.
This investment takes into account the FIGURE 3: CUMULATIVE AMORTISATION OF BIM USE OVER TIME
costs incurred for the implementation
EURthous. Savings/Profit Investment
of the individual project with the
75,000
BIM methodology during initial
70,000
application on the side of the client
and the planner. The effect consists of
25,000
increased revenue through BIM, e.g.
20,000
through an increase in the value of 15,000
the building in the event of a sale, as 10,000
well as cost savings in the planning, 5,000
construction and operating phases. 0
-5,000
Even though the savings in the 1 2 3 4 5 6 7 ... 38 38 Year

47 percent of the improvement in project EBIT of around €70 million is


attributable to the planning and construction phase
Around 47 percent of the improvements In addition, the application of BIM has or lost rental income). The savings
in project EBIT for TÜV SÜD’s new a positive effect on sales. Potentials potential in the planning phase is
construction project would have in this respect exist in roughly equal negligible, which can be explained by
resulted from savings in the planning amounts in value enhancement the fact that planning only accounts
and construction phase and 40 percent (e.g. increase of the sales price for a small share of total costs. In
from the operating phase. This aspect through transparent inventory and addition, the effect is primarily based
explains why the effects can already be operational documentation) and in on a shortening of the process cycle
exploited in the short term. the avoidance of lost revenues that times as well as an increased training
might occur without an application effort with the first BIM projects. In
In the construction phase, it is of BIM (e.g. delay in overall project the construction phase, on the other
primarily the costs according to the progress resulting in delayed start hand, the costs can be reduced by a
contract (i.e. the costs of construction) of production of the core business, much larger proportion.
that offer potential for high efficiency
benefits and cost reductions because, FIGURE 4: TOTAL EFFECT BY SALES AND COST PER PHASE
for example, overdimensioning of the
Revenue
technical building equipment (TBE) is 7% value increase/project turnover
13
avoided. The reduction of subsequent 2
6% loss of revenue
costs accounts for a relatively small 40 Planning
BIM 2% planning/development costs
share. During the use of the building, CONTRIBUTION
the majority of the savings result from TO TOTAL EFFECT Construction work
lower operational running costs, to a IN % 42% operational costs
3% ongoing assoicated costs
lesser extent from reduced ongoing 45
Operation
ancillary costs. 32% operational costs
8% ongoing associated costs

TÜV SÜD | Return-on-investment on Building Information Modelling (BIM) 7


Drivers for result improvement through BIM

FIGURE 5: REVENUE AND COST POTENTIAL THROUGH BIM USAGE PER


The greatest leverage PHASE
for improving returns Potential through using BIM (thous. EUR)
Value increase/project turnover 5,120 +4%
through BIM % Potential through using BIM (%)

would lie in space Loss of revenue 4,500 +100%

optimisation. Planning/development costs 1,337 -11%

Contractual costs 29,734 -29%


In absolute terms, the contractually
agreed construction costs show the Rework costs 1,843 -18%

greatest potential; in relative terms,


the operating costs offer the greatest Operational costs 22,474 -45%

potentials.
Ongoing associated costs 5,299 -28%

A closer look at the effects shows that


the absolute and relative potentials the planning phase, the savings effect €30 million, the savings potential of the
for revenue growth (in terms of the is both relatively and absolutely low, at operational cost, representing approx.
increase in market value) and cost 11 percent. While the costs according 45 percent cost reduction through
savings are very different for each to the contract make up the largest BIM, should be emphasised.
phase, due to the underlying drivers. In share in absolute terms at almost

Six drivers account for over 50 percent of BIM potentials


When examining the question of ■
Reduction of maintenance client and start-up costs for
where the use of BIM has the greatest work preparation: The second the operational business by the
impact, the following six drivers can largest driver is the reduction of facility management company
be identified. They account for over 50 maintenance efforts during building are avoided. Support for mobile
percent of the potential: operation. By using BIM, work devices makes reporting faster
preparation and on-site inspections and easier, while increasing the

Space optimisation through TBE for maintenance measures are quality of documentation. The
compaction and optimised layout reduced due to up-to-date and creation of reports and decision-
planning: The greatest leverage complete technical data that is making bases, as well as the
for improving returns through BIM available on the move. A saving of qualification and approval of
would lie in space optimisation approx. 2 hours per malfunction measures, is thus significantly
through TBE compaction and report can be assumed for 50 accelerated. Maintenance cycles
optimised layout planning in percent of the malfunction reports. can be steered on a demand basis.
relation to a comparable building ■
Reduction of operational running When damage actually occurs, the
such as the example project. costs: With up-to-date, structured point of damage can be identified
Compared to 2D planning, this and complete submitted data directly by means of efficient
could lead to savings in space not and corresponding as-built analysis. Overall, the time required
to be built amounting to approx. documentation, additional costs by facility management is massively
6 percent of the total project costs. for follow-up enquiries by the reduced. In the future, these

8 Return-on-investment on Building Information Modelling (BIM) | TÜV SÜD


effects will be further enhanced also leads to savings in operating
by the use of technologies such as costs for heating, cooling and
predictive maintenance and sensor ventilation, in addition to reduced Sustainability is
technology, which build on the data investment costs. becoming increasingly
from the BIM model. important in society,
BIM-based thermal building In addition to the explicitly explained
and also in the

simulation: Another driver that drivers, 52 further drivers were


reduces costs in construction identified that play a role in improving construction industry.
is BIM-based thermal building sales or reducing costs. These
simulation. Optimised data by include, for example, the reduction of
means of planning-integrated the volume of additional work through and also in the construction industry.
thermal simulation lead to cost collision control/clash detection, These challenges can be met with the
certainty, schedule compliance and optimal construction process planning support of BIM, since sustainability
reduction of CAPEX and OPEX for and budget monitoring with real- goals can be taken into account
roof and shed, with major effects time control, the optimisation of from the very beginning of planning,
on the facade. The proven impact construction site logistics, BIM-based and reduced resource and energy
of BIM-based thermal building cost management, and the reduction requirements have a direct impact on
simulation relates to the investment of material waste through need-based the carbon footprint of a construction
costs in the construction phase. purchasing. project. In addition, BIM enables
In addition, lower operating costs improved safety instructions on the
are incurred when the building is in Apart from the drivers that have a construction site, so that the number
use, which also has an impact as a direct financial impact, BIM has of accidents on the construction site
driver of profitability improvement various effects that cannot be can be reduced. Finally, the use of
through BIM. measured quantitatively. Examples BIM contributes to an overall increase

Avoidance of profit loss due to include the positive effects on the in customer satisfaction and visibility
timely completion: A further environment, on health and safety, from the contractor’s point of view,
driver should be emphasised that and on the reputation of the parties leading to increased reengagement
can lead to an increase in sales involved. Sustainability is becoming rates and new market opportunities.
compared to a scenario without increasingly important in society,
BIM. If one assumes a possible
delay of approx. 3 months for FIGURE 6: THESE SIX DRIVERS MAKE UP OVER 50% OF SAVINGS
construction projects of this USING BIM
magnitude, there will be lost profit
during this time if the project is to
Space optimisation through Reduction of maintenance work preparation
be used by the owner. Alternatively, TBE compaction and Savings: 7,560 thousand EUR
there may be lost rental income if optimised layout planning
% of total effect: 11%
the property is not intended for the Savings: 7,680 thousand EUR
% of total effect: 11%
owner’s own use, but for rent. This BIM-based system Avoidance of profit
can be avoided by using BIM, since simulation loss due to timely
completion on schedule as planned Savings: 4,480 thousand completion
EUR Additional profit: 4,500
is possible. thousand EUR
% of total effect: 6%

BIM-based system simulation: Reduction of operational % of total effect: 6%
By performing a project-specific running costs
simulation in advance, investments Savings: 6,896 thousand EUR
% of total effect: 10%
in heating, cooling and ventilation
systems can be carried out in a
targeted manner and thus reduced BIM-based thermal building simulation
Savings: 5,120 thousand EUR
overall. Like the thermal building
% of total effect: 7%
simulation, the system simulation

TÜV SÜD | Return-on-investment on Building Information Modelling (BIM) 9


The potentials from the perspective of the
stakeholders

Building owners are the main profiteers


While the potentials of BIM with an analysis of the example project shows management companies benefit to a
almost 70-fold ROI can hardly be that the building owner would have relatively large extent, since numerous
doubted in general, the question of been the main beneficiary. Although savings in the operating phase are
who benefits from these potentials he also has to bear a large share of related to an increase in the efficiency
becomes even more important. Taking the investment costs, he benefits of external service processes.
into account the investments to be in return from almost two thirds of
carried by the involved parties, the the effects achieved. Also, facility

Contractors are benefiting insufficiently at present


from many drivers that lead to a based on a risk and profit margin of 3
reduction in construction costs. percent in relation to the construction
The improved customer Drivers such as space optimisation costs, an increase in the margin of
interaction and higher or BIM-based thermal simulation the construction companies by a
customer satisfaction and plant simulation reduce the factor of three to over 9 percent can
total construction volume. The client be seen. The efficiency improvements
result in potentials for benefits from this, while the contract also optimise their capacity utilisation
sales increases. sum is reduced accordingly from the and create order capacities for
contractor’s point of view. In addition, additional projects. Furthermore, the
supplements are massively reduced improved customer interaction and
In the project example, the contractor due to accurate planning and collision higher customer satisfaction result in
was only able to benefit indirectly checks using BIM. Nevertheless, potentials for sales increases.

10 Return-on-investment on Building Information Modelling (BIM) | TÜV SÜD


Summary and outlook

BIM should be demanded as a standard by all stakeholders – new business


models have to be developed.
The profitability of BIM as a whole for planners and contractors, and it increasing revenue through new or
can hardly be questioned. Although is only a matter of time before BIM changed data-based business models
the positive effects are only slightly becomes established across the or an additional range of data-based
apparent in the planning phase, the board. services. Particularly in the period
effect is even greater during the of transformation, in which not all
construction and operating phase. For the other players, especially competitors have yet established
Since all players benefit sufficiently planners and contractors, the the use of BIM, there is the option of
in terms of their own optimisation increasing use of BIM means that pricing the use of BIM accordingly – a
potential, the use of BIM should be components of the business models cost position for the building owner,
demanded as standard. The maturity that are successful today may not be which is usually profitable due to the
of BIM should thus become a core sustainable in the long term. Instead, high potentials.
criterion in the selection process the use of BIM creates potential for

What are the implications of these challenges for


your company?
BIM is far more than a technology, discuss the relevance of these individual transformation process
and requires a holistic transformation challenges and your BIM strategy to ensure the long-term economic
process. We would be happy to with you, and support you in your success of your company.

TÜV SÜD | Return-on-investment on Building Information Modelling (BIM) 11


About TÜV SÜD Advimo
TÜV SÜD Advimo offers you optimum of environmental protection and and Switzerland. You benefit from
value creation for your real estate. We resource conservation, we also the short distances and flexibility of
perform all technical, economic and advise and support you in all matters a modern medium-sized company,
organisational planning, consulting, relating to the energy efficiency and combined with the comprehensive
and management tasks for you along sustainability of your buildings. technical expertise and stability of the
the life cycle of your property. With TÜV SÜD Group worldwide.
our experienced building certification We are represented by 250 employees
auditors and experts in the field at 14 locations in Germany, Austria

About Horváth
Horváth is an international, precise knowledge of, and take into success across whole companies,
independent management consultancy account, the local conditions thanks in individual business areas or in
firm with over 1,000 employees to the cooperation with our partners functions such as sales, operations,
in locations in Germany, Austria, in the consultancy alliance “Cordence procurement, controlling & finance,
Switzerland, Hungary, Romania, the Worldwide”. HR and IT. Horváth stands for project
USA, Saudi Arabia, and the United results which create sustainable
Arab Emirates. We represent in-depth Our specialists support companies benefits and value. That is why
knowledge across different industries and top executives with extensive our consultants accompany their
and top-level subject matter expertise competence in business models, customers from the business
in all company functions – with a focus organizational structures, processes management concept and anchoring
on performance management and and systems to successfully align in processes and systems through to
transformation. We carry out projects their organizations for the future. change management and training of
for our international customers around We combine passion and effective managers and employees.
the world. In this context, we provide implementation to turn change into

12 Return-on-investment on Building Information Modelling (BIM) | TÜV SÜD


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Deutsches Architektenblatt. (April 24, 2018). Wie Architekten BIM bewerten. Link: https:// Witschaftskammer Österreich Geschäftsstelle Bau. (June 2016). WKO. Link: https://www.
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Fraunhofer IAO. (2019). FUCON 4.0 – Nachhaltiges Bauen durch Digitale und Parametrische
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market conditions, it should not be interpreted to be a commitment on the part of TÜV SÜD, and TÜV SÜD cannot guarantee the accuracy of any information presented after the date of
publication. This White Paper is for informational purposes only. TÜV SÜD makes no warranties, express, implied or statutory, as to the information in this document. Complying with all
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