BIM: Do the Benefits Justify the Cost?

Do the benefits of BIM justify the costs to implement it for smaller design and construction firms? The knee-jerk reaction from most BIM-ADs (BIM Advocates) is, "Of course, it does! The longer you wait to implement BIM, the more business you're going to lose until you become irrelevant to the construction industry." (FYI, the opposite of a BIM-AD is a BIM-DET, BIM detractor.)

Well, maybe so, maybe no. We won't know until we examine the real cost of implementing BIM. Keep in mind, now, that we are talking smaller firms here, firms without a whole lot of disposable income. Sometimes, especially in troubled times like these (take a drink!) they are staying in business month-to-month. A $10k investment in one seat of software and hardware could make the difference between making payroll/rent and closing the doors.

To examine this we'll look at the cost of bringing one seat from Revit rank beginner to moderately competent Revit operator. I'm going to use a design firm as an example since that is where my experience lies. This is not pie-in-the-sky, back-of-the-envelope speculation. These numbers are based on what my firm spent in software, hardware and training. We've been using Revit, off and on, for a couple of years now, and I'm not even sure we've reached the moderately competent stage. Most of that is, I'm sure, due to the "off and on" way we used Revit. With Revit it is true with a capital "T" that if you don't use it, you lose it. But I digress.

Last I looked, one seat of Revit (MEP, at least) will cost approximately $4,500. If you find the right reseller you might get a bit of a discount, but let's stay with that figure for this discussion.

Now that you've got the software don't expect to load it up and start BIM-ing away. Especially if you've been using AutoCAD. Comparing the use of AutoCAD with the use of Revit is like comparing Microsoft Word with Adobe Photoshop. The conceptual differences between the two are night and day. Revit is NOT a drafting program. Let me say that again, Revit is NOT a drafting program. Write that on a Post-It note and stick it to your forehead. You don't work with lines, circles and polygons; you work with "objects" that belong to "families". So where do you get these "objects" and "families"? You either use the ones provided by Autodesk or a few manufacturers (slim pickins) or you develop your own (a whole 'nother kettle of fish!).

So you're going to need training (Can you say "understatement"? I knew you could.). What's that cost, and how much do you need? The Autodesk reseller/trainer we use, CAD-1, charges $90/hr for as many people as they can accommodate (At least, they did. That was about a year ago.). The Revit Fundamentals class takes three days, and CAD-1 lists the cost at $895. If you take a class, you can get this discount, but you are (believe me!) going to want individualized instruction. You, as the employer, send one person to this class. That person earns $25/hr DWE (direct wage expense), so the real cost to you (taxes, insurance, vacation, etc.) is about $62.50/hr. For purposes of staying with round numbers, call it $60/hr, adding $1,440 to the training cost for a grand total training bill of $2,335. Include the cost of the software and you are at $6,835.

And what have you got after this expenditure? Someone who can start up the program, set up a job and draw . . . strike that, MODEL . . . some walls. Maybe. As long as they MODEL the walls the way Revit wants them to (I am NOT exaggerating!) instead of the way they've been doing it for the last 10 years. This really isn't the fault of the training. These training sessions are so information-dense that a lot gets lost between the classroom and the office.

A couple of days after this poor designer/drafter gets back to the office, he comes to see you. He's suddenly developed bald spots and the hair he has left is a lot grayer than you remember. Did he have that twitch before? He tells you his computer is bogging down. Revit is a resource hog. If your computer is two years old and has less than 3 GB of RAM, it's going to struggle. So you go out and spend $2,500 on a new quad-core computer with two 24-inch monitors. Believe me, two 24-inch monitors is the way to go!

You've now spent $9,335, and your in-house Revit guru (RG) doesn't have time to go get coffee while the program loads. Problem is, he's still so slow he might as well be hand drafting. He needs more training (and practice). This time you've learned a few things and contract for individualized training where you take a job you are working on and have the trainer lead you through it by the hand. Figure your RG is going to need at least 4 to 8 hours of training for each of the chapters in the Revit Users Guide before he becomes really useful.

So now let's talk about cost/benefit. Autodesk has produced a white paper called, "BIM's Return on Investment". It is available from the Autodesk website. Personally I think the equation they use to calculate ROI is perfect . . . for lining a catbox. It makes absolutely no sense to me, but then, I'm an old fogy. The numbers they use to populate the equation, i.e., training time, productivity loss and productivity gain, seem to be in the ballpark. Payroll cost seems to be DWE and the monetary investment in hardware and software seems to be a little low. So instead of using THEIR equation, I calculated my own simple payback.

Monthy cost for someone you are paying $25/hr is $10,400. Annual cost would then be $124,800, which jives with the old rule of thumb that you need to bring in $150,000 a year per production person to make a profit.

Cost for the hardware and software: $7,000.

Cost for training: $3,000.

Time until the RG gets back to the same productivity level he had before he went Revit: 3 months

Productivity loss during that time: 50%.

Productivity gain after the 3 months: 25%

First year cost = hardware + software + training + personnel cost during 3 month period ($10,400 * 1.5 * 3) + personnel cost during remaining 9 months ($10,400 * 0.75 * 9)

This comes out to $127,000, meaning you have spent $2,200 more than you would have if you had kept on doing things the old way. The cost for the first 3 months, and thus the investment in this new way of doing things, is $56,800.

However when you calculate the second year's cost ($10,400 * 0.75 * 12), you come out with $93,600, a savings of $31,200 over the annual cost of the old way. Add in the $2,200 loss in the first year, and you have a two-year savings of $29,000. You still haven't paid back that initial investment. But when you count in another $31,200 savings for the third year, you now have a total savings of $60,200. The simple payback for investing in BIM has paid back in just under 3 years. A pretty decent payback -- if you're not strapped for cash.

Keep in mind, all of the foregoing is nominally true ONLY if you go into BIM (Revit) whole hog. Every job you do from the first day your RG gets back from the first training session MUST be done 100% in Revit. If you try to go halfsies, you are in big trouble.

So, is BIM worth the cost? At this point the answer is STILL maybe, maybe not. If you, Mr. Design Firm Owner, go into this with your eyes open instead of being stampeded by the BIM-ADs yelling in your ear, "YOU NEED TO DO THIS NOW!!!", and budget for these expenses so that you don't go broke trying to stay "current", you could open up a whole new market segment for yourself. No, you still won't be doing $100-million projects, but you might make more money in the $500k to $1M market niche you currently work in.

You might also want to read a conversation between me and Greg Arkin over on the Revit3D.com blog. First go here, read the post and then my comment, then go here.

Whether these costs are justifiable also depends on the fee structure. That needs to change. I'm going to offer a "Modest Proposal" in my next post that will give the BIM-DETs the vapours and probably put me on a hit list or two. Please join me.

As always, feel free to comment and tell me where I'm wrong. Or right. We're all just flailing around in this new sandbox right now, kicking up a lot of dust. Anything you can contribute to the discussion just makes us all (especially me) smarter.

Until next time.