Friday, February 7, 2014

The Built Industry By The Numbers




Advocates of BIM and IPD often ask how owners can be encouraged to adopt, adapt to and deploy BIM and IPD.  One argumens revolves around the potential savings on capital project budgets, both out the gate and over time. This blog post summarizes that argument briefly.

The Built Industry Numbers

The world spends $5.0 trillion annually to plan, design and construct new facilities and buildings and additional trillions to operate and maintain existing facilities and buildings. Separately, the McKinsey Global Institute reports the world will spend approximately $50 trillion on new infrastructure – defined as roads, railways, ports, airports, power plants, water supply infrastructure and telecommunications support – over the next 15 years. Accordingly, in the next 10 to 15 years the world will plan, design, construct and then operate and maintain an additional $100 trillion in new facilities, buildings and infrastructure.

The annual cost of operating and maintaining facilities, buildings and infrastructure generally costs an amount equal to 10% to 30% of the value of the facilities, buildings and infrastructure being operated and maintained. Accordingly, by 2030 approximately $10 to $30 trillion will be spent annually to operate and maintain approximately $100 trillion worth of buildings, facilities and infrastructure put in place over the past 10 to 15 years.

Successful use of building information modeling (BIM) and integrated project delivery (IPD) to plan, design and construct new facilities, buildings and infrastructure reduces the cost of planning, design and construction services by 10% to 20% depending on an array of factors. BIM enabled facilities, buildings and infrastructure are cheaper to operate and maintain. Smart BIM and IPD facilities, buildings and infrastructure may cost 10% to 20% less to operate and maintain.

A savings of 10% to 20% on $100 trillion is $10 or $30 trillion. If saved on planning, design and construction costs those are one-time numbers but if saved on operations and maintenance costs over time the $10 to $30 trillion begins to compound and soon your talking about real money. The compound interest earned on $10 to $30 trillion over a 60 year time frame becomes a mind blowing sum. While the foregoing analysis focuses on global numbers innovators seeking to deploy BIM and IPD need to run these numbers for institutional owners on the portfolio of existing and planned facilities, buildings and infrastructure on the books and in the pipeline for those owners. 

But don't just focus on the numbers.  Innovation matters too.  That will be the subject of a future blog post so stay tuned for that post.


Welcome to the Collaborative Revolution!

James L. Salmon, Esq.
Collaborative Construction
300 Pike Street
Cincinnati, Ohio 45202
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