The perceived business value of BIM S.Vass & T. Karrbom Gustavsson Department of Real Estate and Construction Management, KTH Royal Institute of Technology, Stockholm, Sweden

ABSTRACT: The economic effects of BIM are increasingly gaining interest. Understanding how to create business value from BIM is becoming of strategic concern for BIM users. The business effects of BIM have been examined in research, yet little is known about the actual economic consequences of BIM. Previous research has focused on BIM from a practical approach where efforts have been made towards measuring the performance of BIM. The purpose of this paper is to explore how actors in the Swedish construction industry perceive the business effects of BIM, but also what organizational prerequisites need to be in place for value creation in BIM. The findings indicate that the industry mainly perceives desired effects of BIM for the future and that few measure the economic effects of BIM. Most importantly, there is a need to understand the organisational prerequisites for value creation through BIM.

1 INTRODUCTION Building Information Modelling (BIM) has become increasingly popular within the construction industry and there are currently many industry -, governmental and academic initiatives promoting development and implementation of BIM. There is also a great interest for BIM among researchers, especially from rational, process and technological perspectives. This bulk of research includes technical aspects of information handling, such as modelling, classification and standardisation (Hallberg & Tarandi, 2011, Grilo & Jardim-Goncalves, 2010, Ekholm & Häggström, 2011), optimizing planning and scheduling for more efficient processes (Gilligan & Kunz, 2007, Märki et al., 2007, Fischer & Kunz, 2004) and research on performance measurement and business value (Kam et al, 2013). A majority of what has been written about BIM aims at promoting desired benefits rather than being in-depth reflective discussions of perceived effects and the organizational prerequisites needed for desired benefits to actually be fulfilled. In other words, the earnings are often presented, but not the associated costs and limitations (compare with BecerikGerber & Rice, 2010, Gustavsson et al., 2012). One explanation to this is the lack of research from organizational and economical perspectives problematizing BIM in its organizational context (Adriaanse & Voordijk, 2005, Gustavsson, 2012, Wikforss &

Löfgren, 2007). In this paper we examine how experienced BIMrepresentatives from clients, contractors and consultants in Sweden perceive the consequences of BIM for business and what organizational factors they perceive as prerequisites for value creation. The research questions are: What are the perceived business effects of using BIM? And, what organizational prerequisites are needed for economic value creation? This research will complement and make a contrast to previous research and deepen the knowledge of BIM from a contextual perspective including both organization and economic factors and will guide further research and development of BIM. This paper is structured as follows: In the next section there is a background to previous research on economic perspectives of BIM. Then follows a presentation of the method used. After that follows a section of selected results from the interviews and finally the findings are presented and discussed. The paper ends with reflections on further research. 2 PREVIOUS RESEARCH The construction industry has a history characterized by poor quality, low productivity and many broken promises (Egan, 1998). These problems are partly a result of lack of collaboration, integration, information, communication and adversarial relationships

between actors (Bresnen & Marshall, 2000, Kadefors, 2004, Winch, 2010). All processes in construction, such as design, procurement, production, logistics, facility management etc. are dependent on rapid access to a great amount of updated information. Although BIM provides an effective IT-tool for information storage and transfer and for more efficient processes (Becerik-Gerber & Rice, 2010) there is still very little knowledge of the actual economic effects and outcomes of BIM. There are case-study research results showing improved project performance with BIM making the building process more efficient and effective (Becerik-Gerber & Rice, 2010). Based on these studies, BIM contribute to accurate and consistent drawing sets, early collaboration, synchronized design and construction planning, clash detection, model-driven fabrication and greater use of prefabricated components, support of lean construction techniques, and streamlined supply chain management (ibid). However, as Becerik-Gerber & Rice (2010) acknowledge, these case studies do not provide a complete and comprehensive list of benefits and associated costs. Previous research on the effects of using BIM in a business context is based on rational approaches focusing on performance measurement and process optimizing (Kam et al., 2013, Fischer & Kunz, 2004). In these studies, it is assumed that it is possible to maximize outcome from identifying and quantifying the effects of BIM, and that the information needed to identify and measure the values of BIM is available, complete and comprehendible. In this view, BIM is representing all the information needed for the building life cycle (Eastman et al., 2011). The research on quantifying and measuring the value of BIM for conducting business, has reported the following benefits: improved business performance, lower costs, increased profitability and increased safety (Barlish & Sullivan, 2012, Gilligan & Kunz, 2007). In another report, by McGraw-Hill Construction (2009), the business value of BIM is associated with increased profitability, repeated customers and opportunities for gaining new customers. According to Kam et al (2013) applying BIM in business also has positive effects on collaboration, coordination of multiple disciplines, sustainable design as well as competency and reputation. There is an apparent contradiction, known as the “productivity paradox”, between the remarkable advances in computer power and the slow growth of productivity (Brynjolfsson, 1993). This makes it difficult to evaluate the benefits of using IT-tools such as BIM in the construction industry (compare with Sulankivi, 2004). Previous research by Brynjolfsson (1993) and Brynjolfsson and Yang (1996) on the productivity paradox show there are four potential factors explaining why it has not been possible to show increase in productivity based on increased use

of IT. These factors are mismeasurement, redistribution, time lags and mismanagement. Here we apply a more critical approach to research on BIM based on bounded rationality (Simon, 1991) and acknowledge that there is a difference between desired effects (the ex-ante perspective) and perceived outcomes (ex-post perspective). 3 METHOD The research is exploratory and based on a literature review which was performed initially to get an overview of previous BIM research in general and to gain a deep understanding of previous research on economic consequences of BIM in particular. After that followed nine in-depth semi structured interviews. The respondents were selected by purposive sampling and they represent client/owner, contractor or consultant. The respondents were selected on the basis of high engagement in the Swedish construction BIM-community (for example BIM Alliance Sweden), their experience of working with BIM and their current position. The rationale behind purposive sampling is that the research aim of discovering the consequences of using BIM for doing business remains unclear and ambiguous, which makes early BIM-adopters and experienced BIM users of more interest to the survey (Bryman, 2012). All interviews were conducted at the respondent’s workplace and they lasted one and a half hour in average. All interviews were documented and analysed. The analysis was based on interpretation (Silverman, 2001, Silverman, 2010) until a meaningful and sense-making pattern was found. Representative extracts were selected to construct the narratives. Table 1. Respondents Respondent A B C

Industry actor Consultant Contractor Owner

D E F G

Consultant Contractor Consultant Owner

H

Owner

I

Contractor

Current position Senior expert Head of IT Development manager Head of IT Head of IT Project manager Engineering manager Business unit manager Development manager

Industry experience 15 years 10 years 5 years 20 years 10 years 10 years 15 years 10 years 10 years

There are limitations to this study. The respondents are only nine and they are a part of the same BIM-community and they operate in Swedish construction industry. Also, there are only nine respond-

ents, however representing several actors and thus enables triangulation (Denzin, 2006). The literature study aims to providing a broader perspective and contribute to putting the interviews in perspective. Still, the results of this study are difficult to use to generalize to the industry as a whole but give a current view on value creation from BIM. 4 RESULTS The interviews were focusing on economic effects of using BIM in the construction process. In the interviews, the respondents described desired and perceived economic effects of using BIM in their organizations and what organizational prerequisites they perceived as important in order to perceive positive value creation through BIM. 4.1 Desired economic effects The desired effects, i.e. expected business values of BIM in the future, were improved project work practices (for example “more visual communication and planning”, “to enable internal benchmarking between projects” and “fewer errors and reworks”), more efficient and optimized processes (for example “information management”, “knowledge management” and “facility management”) and improved project performance (for example “higher quality at lower cost”). 4.2 Perceived economic effects When the respondents were asked to describe the current situation, i.e. the perceived economic effects of using BIM in their organizations, several respondents began by focusing on BIM as an expensive and complex investment. BIM was for example seen as a costly software tool in need of frequent updates and additional education: “We are expected to buy expensive software updates that we can´t fully make use of.” (Respondent H) “Expensive software updates do not add any value, still we have to buy them.” (Respondent A) “Updates are very expensive as they also include costs for education.” (Respondent D) There are also respondents arguing that BIM is an extra cost not only initially but continuously, for example when developing and establishing new work procedures, new roles, education etc.: “The only way to gain value from using BIM is by investing heavily in the early stages.” (Respondent H)

“There is a knowledge barrier and a high initial cost for installing new software and additional education.” (Respondent B) “The added costs are not only in monetary terms but also in establishing new ways of working, new roles and education etc.” (Respondent F) Other barriers for value creation from implementing BIM were also higher complexity, uncertainty and too much information in the models: “BIM is difficult to understand and make sense of. There is too much information in the model, information that we cannot use.” (Respondent C) “Too many different standards and formats are used and we have to spend most of our time translating the models” (Respondent E) In addition, BIM is also seen as “an experiment” that adds additional risks and associated costs. BIM is still seen as something new to many in the industry and thus, it is also perceived as complex and difficult why new expert roles are needed, for example a BIM-coordinator: “Working with BIM is an experiment that implies extra costs” (Respondent H) “The future service we would like to offer our clients is the BIM coordinator” (Respondent D) Finally, there were respondents stating that they at the moment do not perceive any positive economic effects of BIM: “It is impossible to show any positive economic effects of BIM today.” (Respondent H) And there are also examples of extracts from the interviews that show that there is uncertainty and ambiguity among the respondents on from where /from what business value is created, i.e. what effects what? The business effects of BIM do not come from the model itself, but from the processes built around the model” (Respondent E) ”Currently we do not know if the effects of BIM stem from just using the model, or if is a result of us changing our work processes with BIM” (Respondent F) To summarize, most perceptions about the effects that create business value are dealing with what creates extra costs rather that what increases the value. BIM must be seen as a long-term investment rather than a short-term cost, which is not the case at the moment:

“The actual economic effects of BIM arise in the operation and maintenance phase” (Respondent I) “When you invest in BIM, you should expect to receive the payoff much later.” (Respondent H) 4.3 Perceived organizational prerequisites Why then is BIM not perceived as contributing to positive economic effects? What organizational conditions are perceived as important to establish to enforce positive value creation? Among the perceived economic effects of BIM, there were a couple of examples that clearly relate to organizational conditions, i.e. to support project performance. These were “improved coordination of work” and “clash detection to reduce errors”. However, the respondents argue that there are not enough incentives today to actually implement and use BIM to change work processes: “A lack of incentives for BIM makes it difficult to create economic effects.” (Respondent A) “There are no economic or career incentives to use BIM today.” (Respondent D) And there are no clear incentives for project managers, who are responsible for project time, cost and quality (i.e. project goal), to work with BIM and add risk and thereby jeopardize the project fulfilment: “What do project managers actually get out of using BIM?” (Respondent A) Another interpretation of lack of incentives is the fact that there are today not enough earnings from a BIM-project versus a project not using BIM. For a project manager to actually implement and use BIM in their project, there has, according to respondents, to be clear and reliable arguments for the positive benefits, including validation of results. Otherwise there is no reason for changing something that already works ‘good enough’. “It is a challenge to convince project managers to implement BIM when the traditional work ways are sufficient and when they already make money” (Respondent E) Also, then there is the challenge of motivating individuals to actually work with BIM. The individual worker´s attitude is often perceived as a barrier for change. Individuals are used to work in traditional ways and the incentives to change from traditional work procedures to use BIM are low. At the moment, BIM implementation and BIM use is dependent upon BIM-enthusiastic individuals. ”Implementing BIM depends on whether you have a BIM enthusiast onboard” (Respondent G)

“It is often through a BIM enthusiastic project manager that BIM has positive effects on business value” (Respondent H) Finally, one argument that all respondent has brought up in the interviews is the need for simplicity. BIM is often too complex, and too complicated to actually make use of in the daily work. For the respondents, who still don't use BIM in larger extent, argue as follows: “In order to start using BIM there has to be a simpler and more comprehensible framework to relate to.” (Respondent F). ”BIM has to be useful in my daily work.” (Respondent B) 5 DISCUSSION The questions were what the perceived economic effects were and what organizational conditions that were needed for further development of BIM and improved business value creation from BIM. Among the perceived economic effects, there are only a few that are currently perceived as positive. Most of the economic effects add additional costs, at least on a short-term basis. This affects the projects and the project managers, which are directly responsible and accountable for the project outcome, and not the industry´s long term development and competitiveness. Thus, there is a challenge to not only get acceptance for BIM on a strategic level but also to convince project managers, i.e. those responsible on operation level. The findings from this study suggest that in order to encourage further implementation of BIM and achieve acceptance for BIM on the operational level, enlightening project managers on the possible economic benefits of BIM for their everyday work is not enough. Though this paper recognizes that there is a need for educating organizations on what economic effects BIM enable, no useful or practical skills on how to actually use BIM for business value creation can be developed, unless the organizations are also aware of what organizational prerequisites they need to have in place in order to enable these positive effects. For example, previous research on performance measurements of BIM has taken into account various economic indicators in BIM projects (Kam et al 2013, Fischer & Kunz, 2004), yet not provided knowledge on what organizational conditions that are present when these positive economic indicators are being measured and perceivedpositively.

This paper argues that, firstly, the indicators used for measuring BIM performance need to be closely aligned with the project managers project goals in order to get acceptance for BIM. And secondly, that more attention needs to be directed towards understanding what organizational conditions enable value creation in BIM. In line with previous research on IT tools in an organizational context (Gustavsson et al, 2012, Wikforss & Löfgren, 2007), this paper argues that merely having the necessary information technology in place for creating business value is not sufficient. The methodologies and processes when working in BIM on organizational, strategic and operational level must be analyzed prior to attempting to assess the economic effects of working in BIM. This paper also acknowledges that research on the economic indicators of BIM performance, such as in for example Kam et al (2013) and Fischer & Kunz (2004), are useful for further developing the implementation of BIM, alongside research on organizational prerequisites for business value creation through BIM. As the results in this paper indicate, there are still only limited measurements of BIM in the Swedish construction industry and there is a need for simple, reliable and useful indicators for the economic effects of BIM. Suggestions for further research include more thorough research on both the economic indicators of BIM and the organizational prerequisites for value creation. Specifically, research on developing indicators for economic effects of BIM that are anchored on the operational level, are needed in order to be able to use project data for internal benchmarking of BIM projects and to more efficiently manage operations. REFERENCES Adriaanse A. & Voordijk H. 2005. Interorganizational communication and ICT in construction projects: a review using metatriangulation. Construction Innovation: Information, Process, Management, 5 (3). Barlish, K. & Sullivan, K. 2012. How to measure the benefits of BIM — A case study approach. Automation in Construction, 24, pp. 149-159. Becerik-Gerber B. & Rice, S. 2010. The Perceived Value of Building Information Modelling in the US Building Industry. ITcon, 15, pp. 185-201. Bresnen, M. & Marshall, N. (2000), “Partnering in construction: a critical review of issues, problems and dilemmas”, Construction Management and Economics, 18 (2), pp. 22937.

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