BUILDING INDUSTRY 4.0

THE NEXT LEVEL OF BUILDING DEVELOPMENT

In November, I attended the world’s largest building digitalization exhibition in Munich, where a staff member from a German market research institute declared that in 2019, 17% of construction projects have operated with BIM approaches and it is predicted to increase by 20% a year in the following five years.

This is pretty insane because it indicates that BIM-based design will replace traditional design methods from large and complex projects within the following five years, and then gradually from smaller ones.

WHY IS BIM AS EXCITING FOR SOME LEADERS AS DISCOUNTED MINERAL WATER IN A DESERT?

Let’s ignore marketing for now and look at a simple arithmetical example. Imagine an ordinary factory or office building that costs 28.5 million EUR for the sake of easy calculation. The order of magnitude looks like this in life:

US projects where a BuildEXT performs digital QA

The pictures show the buildings of two projects running in the US whose digital QA we otherwise do. For the sake of scale, I will now show them here.

LET’S START FROM THE BEGINNING: IS THE COST OF BIM PLANNING THAT IMPORTANT?

Along with the fist numbers, expenses for a 28.5 million EUR project with traditional methods (concept plan: 0.2%; authorisation plan: 1%; construction plan: 4%) is around 1.5 million EUR.

In contrast, BIM-based design and digital services combined with the lifetime cost of the project take up approximately 3% of the total cost, which is at least 2.9 million EUR, therefore twice as much as it would be with traditional planning.

Of course, each project is different, it also reveals itself within time, but based on the 2025 collection rate of international engineering firms, analytical institutes and national standards, broadly, the following figure manifests how the expenses come together:

With a classic architectural design methodology, design fees are lower, so we might think that the same facility will cost more at the end of its life cycle. Not at all.

Based on the diagrams, it is not difficult to judge the competition and we can immediately draw two conclusions from this:

  1. Unmistakably, classic design approaches are much more affordable, therefore the attractiveness of BIM projects is not based on low design fees.
  2. At this point, a dedicated customer – whose discernment is not obscured by the knowledge of BIM – may close a BIM project generated by a quick and unsupported decision.

Yet he would be better off with leaving with the petty cash.

In order to avoid such unpleasant fiascoes, it is worth getting acquainted with the digital life cycle, the basic definitions of the BIM, and it is very reasonable to involve an expert in the preparation of the tender.

You can benefit a lot by being able to differentiate Hollywood BIM from a real BIM project and avoid embarrassing ourselves with a “disco accident-like” building model in our marketing content. I’ll write a lot more about this topic later, so let’s get back to the point.

Consequently, we can declare that:

THE BIM-BASED DESIGN IS TWICE AS EXPENSIVE AS THE TRADITIONAL APPROACHES

It is understandable, as it requires much more software and tools, as well as more working hours, which are also carried out by highly qualified professionals.

THEN WHY IS IT SPREADING SO FAST?

Well, because paradoxically it is very cheap. More specifically, it does pay off very quickly.

Now, I can imagine you looking at the monitor just like me when I learned from one of the best financial professionals in Hungary at his Smart Business Masterclass that “it’s good now because money is cheap”.

BUT DO NOT GIVE UP, EVERYTHING WILL BE CLEAR SOON

The pattern is similar to or better than that of electric cars. The new technology is available, and, while noticeably more expensive, is not unaffordable. However, it is significantly cheaper to manufacture, service and operate; nevertheless, it is super chic.

To perceive the proportions, we are required to acknowledge that these buildings will consume approximately 85-100 million EUR in materials, energy and services over their entire life cycle of 40-50 years, in the following order of magnitude:

For the entire life of the building, the design costs are the lowest, the most important factors being the largest in terms of the total cost of the building.
  • The cost of design and digital services will be approximately 3%, around 2.1 million EUR (planning, BIM information upload, CDE service, FM system implementation).
  • The construction itself amounts to about 30%, which equals 25.7 million EUR.
  • During the lifespan of the building, energy and operation account for about two-thirds of the total cost, which is estimated at around 67%; therefore, about 90 million EUR will be required to allocate to maintenance.

If we compare the total life cycle cost of the two (classic vs BIM) methods, we will have a perception of what the purchasing colleague did not have a chance to observe:

Classic planning vs BIM by building lifecycle

As we examine the bottom bar of the graph above, it clearly (does not) shows, that BIM-based design costs twice as much as traditional design. From the diagram, we can now summarize why it has no importance how much the extra cost of BIM is.

COMPARED TO ALL POSSIBLE SAVINGS DURING THE BUILDING’S LIFECYCLE, THIS AMOUNT IS ESSENTIALLY A ROUND-OFF ERROR.

If the facts mentioned above wouldn’t be sufficient, it might be reassuring that the additional investment accompanied to the BIM methodology, which is about 5% of the total investment, usually within a year it returns double of the value during already construction.

It is because algorythms optimize the systems, which results in a better-operated building, that can save material and energy; therefore, it is enough to purchase smaller machines to maintain it as well. Plans will be much better coordinated, the contractor will understand them more quickly, so there will be much less extra-work and there is a good chance the construction will not be delayed from continuous problem solving.

Consequently, there will not be any bad news to the owner, the director, there won’t be a penalty, and it becomes a story which everyone benefits from.

CONSTRUCTION IS FASTER, CHEAPER AND AS A RESULT OF WAY LESS FIRE-FIGHTING, IT IS SAFER.

But the most insane fact is that a building that is designed and operated in a digital workflow will cost at least 20-30% less over its entire lifecycle. It equals nearly the total construction cost which is 22-28.5 million EUR.

At first, I did not believe in it either; but the more I dealt with it, the more it became realistic. When I experienced on our first three significant investments where the facilities were built with much less problem and conflict, it ultimately convinced me.

That’s why I write this blog, and that’s why all leading companies are captivated by this technology. Moreover, it is not a coincidence that it is already a national standard in the UK and Australia.

I KNOW THIS WAS A LOT, LET ME SUMMARIZE SO EVEN MY MOM WOULD UNDERSTAND IT.

If you add +5-8% to the design fee to fund a proper BIM model, plans and digital services:

  • double of this extra cost will be returned within a year
  • over its lifetime, it pays off about 16-20 times, which brings back the cost of the entire construction.

Should not this convince you yet, the cherry on the pie is that during construction, you can get rid of:

  • a lot of headaches
  • conflict
  • additional work
  • delayed deadlines
  • additionally, when the house is completed, it will be amazingly enjoyable and straightforward to operate.

This will result in significantly cheaper overhead expenses compared to competitors’ houses; therefore, the cost of the product produced in it will be more affordable – or the profit on the rent will be higher.

As you prefer.

HAVING TROUBLES BELIEVING IT?

Of course you are. But we live in an age where development has created a new digital toolkit and language that has opened up previously unimaginable possibilities in construction – just as speech did with communication or the invention of numbers stimulated science and commerce.

If you have a project where it really matters whether you manage to build a stadium or an office well at first, it is a massive self-goal if you are not looking for a good integrator company. One who designs well, has references and insights into the entire BIM lifecycle and digital ecosystem.

If you cannot find it or you are not sure about your designer, I would be delighted to help. Feel free to email me!

We only want to do a few pilot projects in the Hungarian market, it’s not a goal of ours to eliminate competition.

If you want to learn more about this technology or about how it works, where we had major problems in it, check out our blog, subscribe to our newsletter, follow my LinkedIn profile or our social media channels!

We will soon be back with plenty of detailed case studies to create more and more good BIM designers, contractors and projects in the Hungarian construction industry.


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Livják Csaba

Founder and Leader of a 100+ general designer & PM company. Experienced designer, business developer, BIM evangelist.