Abdelrahman M. Farouk, Rahimi A. Rahman, and Ahmad Tarmizi Haron
Faculty of Civil Engineering Technology, Universiti Malaysia Pahang, Gambang 26300, Malaysia
Building Information Modeling (BIM) has revolutionised the global construction industry by providing stakeholders with advanced digital technology that offers a 3D model of a building before construction commences. BIM enables early detection and resolution of potential issues, resulting in time and cost savings during construction. In addition, BIM improves coordination and collaboration among project teams, reduces errors and delays, promotes sustainable construction practices, and enhances job site safety.
The effectiveness of BIM has made it increasingly relevant in the construction industry, creating opportunities to streamline construction processes and optimise project outcomes. With the integration of advanced technologies such as artificial intelligence and machine learning, BIM has unlocked new possibilities for building design and construction. BIM is the future of the construction industry, enabling better visualisation, simulation, and analysis of building performance.
BIM presents a paradigm shift in Malaysia's construction industry. Its ability to identify and address potential issues early on, enhances coordination, mitigates errors, reduces delays, promotes sustainability, and improves safety on job sites. It is a crucial enabler for the Construction 4.0 Strategic Plan and unlocks innovative solutions for more efficient processes, better collaboration, and higher-quality infrastructure at a lower cost. Therefore, establishing a BIM task force and developing National BIM Guidelines can help fully realise the potential of BIM, propelling Malaysia to the forefront of digitalisation in the construction industry.
Return on investment (ROI) is a crucial financial metric for evaluating the profitability of construction projects. It provides a clear picture of the net profit relative to the cost of investment and helps determine the viability of the project. ROI is essential for construction firms and investors to ensure that their capital is well-spent and that they are making informed decisions. The ROI evaluation can be used to determine the long-term performance of a project, providing firms with the necessary data to make informed investment decisions. By leveraging ROI calculations, construction companies can optimise their investments, maximise their profits, and maintain their competitiveness in the industry. Using ROI as a financial evaluation tool is critical to ensuring that construction projects are financially sound, efficient, and meet stakeholder expectations.
BIM is a groundbreaking technology that has overtaken the Malaysian construction industry. This cutting-edge solution offers significant time, cost, and resource savings advantages. By leveraging BIM, construction teams can achieve more accurate project estimations, which translates into reduced construction time and costs. Moreover, BIM fosters better collaboration between team members and facilitates the alignment of project work with design requirements and specifications, leading to enhanced productivity and quality.
BIM's design flexibility is also a critical feature that enables construction professionals to create versatile designs that can be visualised in various formats. This characteristic helps to speed up the construction process while enhancing sustainability efforts by streamlining efficiency and minimising errors. Additionally, BIM contributes to better facility management by generating an intelligent database of building information that can be updated and accessed by all relevant stakeholders throughout the building's lifecycle. This feature translates into cost and time savings during maintenance and operations, making BIM a precious asset for the construction industry.
A successful BIM implementation requires a clear pathway to achieving the desired results. This pathway typically consists of five critical steps.
Þ First, increasing BIM awareness is vital. Understanding how BIM can benefit your organisation and the specific project at hand is essential.
Þ Second, ensuring BIM readiness is vital. This involves ensuring that the right tools and people are in a suitable place to execute a successful BIM implementation.
Þ Third, organisational structure is critical to the success of BIM. This practice entails aligning the company's culture, leadership, and support with the implementation of BIM and being willing to invest in it. Fourth, determining the ROI of BIM is a crucial step. Before committing to BIM, it is essential to evaluate the costs and benefits of the technology to decide if it aligns with your project goals and budget.
Þ Finally, the last step is deciding to implement BIM. This step involves weighing the results of previous steps and deciding if BIM is the right choice for your project. Upon successful implementation, the benefits of BIM include more competent and more efficient work, reduced errors and costs, and increased collaboration among project stakeholders, leading to significant ROI.
Regarding BIM implementation in Malaysia, the first three steps in the pathway have already been taken. There has been a significant increase in both BIM training and investment in organisations between 2016 and 2019. The percentage of organisations providing BIM training increased from 35% in 2016 to 57% in 2019, while BIM investment increased from 33% to 54% in the same period. Additionally, the percentage of organisations with BIM guidelines increased from 41% in 2016 to 50% in 2019, indicating a growing awareness of the importance of implementing BIM guidelines in the industry. However, there has been a slight decrease in interest in BIM among individuals, with the percentage of individuals interested in using BIM dropping from 95% in 2016 to 88% in 2019. Nevertheless, the vast majority of individuals still recognise the value of BIM, with 90% believing in its benefits in 2019. Therefore, the next step towards implementing BIM is determining its ROI successfully.
Determining the ROI of BIM is the final step towards reaching a clear vision and deciding to implement BIM. However, there are numerous challenges involved in determining the ROI of BIM. The initial investment costs are high, including hardware and software expenses and training costs, which can be a significant barrier to entry for small businesses or individual professionals. Therefore, companies must consider their financial resources and weigh the benefits of BIM against the costs, making it difficult to determine the ROI
Several types of fees pose a challenge towards determining the ROI of BIM, including;
Þ development charges,
Þ certification fees,
Þ commissioning fees,
Þ contingency fees,
Þ levy fees,
Þ documentation fees,
Þ and other fees.
Development charges are collected by local authorities when building permit issuance to assist in paying for infrastructure costs. Certification fees are charged to confirm that construction plans and development specifications are consistent with the development consent and comply with local building codes and other requirements. Commissioning fees, which amounted to approximately 6% to 1.8% of the overall construction cost for the project, are charged for testing and validating building systems. Contingency fees are an amount of money set aside to cover any unexpected costs that can arise throughout a construction project. Levy fees are calculated as a percentage of the contract sum and are charged by government agencies to fund public projects. Documentation fees are fees, costs, and expenses incurred by the developer regarding drafting and negotiating project documents, such as BIM models and construction drawings. It is crucial to factor in these fees when determining the ROI of BIM.
Another challenge towards determining the ROI of BIM is the need for ongoing maintenance and updating of BIM models. Unlike traditional construction methods, where changes can be made on paper or through manual revisions, BIM models require digital updates to ensure accurate and up-to-date information. This ongoing investment in time and resources can impact the ROI of BIM over the long term. Additionally, as the software and hardware used to create BIM models evolve and improve, updating existing models may be necessary to remain compatible with new systems. This step further adds to the ongoing costs associated with BIM, which must be factored into any determination of ROI. While the benefits of BIM are significant, it is essential to recognise the need for ongoing maintenance and updates to fully realise these benefits and make informed decisions about implementing BIM in construction projects.
Finally, personal and company resistance to change is a common challenge when it comes to implementing BIM in construction projects. This resistance is often due to a lack of certainty about the costs associated with BIM and the potential ROI that it can provide. For many individuals and companies, the unknowns associated with BIM can be a significant deterrent, as they may not clearly understand the costs involved in implementing and maintaining the technology. This uncertainty can lead to a reluctance to invest in BIM and preferring traditional construction methods. However, it is important to recognise that BIM has the potential to provide significant benefits to construction projects, including improved efficiency, reduced errors, and better collaboration. While the costs associated with BIM may be uncertain, it is important to carefully consider these costs and factor them into any determination of ROI. Doing so makes it possible to make an informed decision about whether BIM is a suitable investment for a particular project or organisation. Ultimately, it is essential to address personal and company resistance to change to fully realise the benefits of BIM in the construction industry.
In conclusion, while BIM implementation in Malaysia has its fair share of challenges, there is still resistance to implementing BIM. With over 40% of companies supporting its use and nearly 90% of individuals expressing interest, BIM implementation still has a great deal of momentum. By addressing the challenges faced by the industry, mainly in determining the ROI of BIM, Malaysia can further realise the potential of BIM to deliver improved collaboration, reduced errors, and better project outcomes.
Determining the ROI is a crucial aspect of any business decision, and it is no different when it comes to BIM implementation in Malaysia. The construction industry in Malaysia is often reluctant to invest in BIM due to the high initial investment costs and the lack of clarity on the ROI. The industry hesitates to take the risk without clearly understanding how BIM can benefit their business. Unfortunately, there is no standard method or study to determine the ROI of BIM in Malaysia, making it challenging for businesses to quantify the benefits of implementing BIM. Moreover, the lack of clarity on the ROI of BIM also makes it challenging to compare the benefits of BIM with traditional construction methods. This difficulty in comparing the benefits makes businesses sceptical of investing in BIM, as they are uncertain if it is worth the investment. This uncertainty, in turn, leads to a reluctance to initiate new workflows or change existing ones, which hampers the widespread implementation of BIM in Malaysia. Therefore, addressing the challenge of ROI is crucial to encourage more significant BIM implementation in Malaysia. Businesses need clear guidance on how to determine the ROI of BIM and the benefits that it can bring. By providing businesses with the tools to determine the ROI and the potential long-term benefits of BIM implementation, the construction industry in Malaysia can make informed decisions and invest in BIM with greater confidence.
Implementing BIM in Malaysia's construction industry faces challenges in determining its ROI. The industry hesitated to invest in BIM due to a lack of a clear understanding of its economic impact. The construction industry has been historically slow in adopting new technologies due to factors such as high initial investment costs, lack of knowledge and experience, reluctance to initiate new workflows, lack of clear policies, and resistance among stakeholders. While hard costs associated with physical building materials, labour, and equipment are easily quantifiable, soft costs, such as design fees, permits, legal fees, insurance, and financing costs, are indirect expenses not directly tied to physical construction. Determining the ROI for BIM requires analysing both hard and soft costs. While hard costs are easy to quantify, soft costs can be more challenging to measure and often require a comprehensive analysis of project performance and associated expenses.
Determining the potential ROI of BIM implementation is crucial for construction firms that seek to remain competitive in today's market. The use of BIM technology can lead to significant ROI, up to 1654%. However, to reach that kind of profit, an evaluation needs to be done by decision-makers. Evaluating the economic impact of BIM can be challenging due to several challenges, which include high initial investment costs, fees, and ongoing maintenance and updating of BIM models. These challenges can be grouped under soft costs and can be overcome by calculating the soft costs of BIM. Calculating soft costs could help in overcoming these challenges. Therefore, calculating soft costs is the ultimate and best solution for determining the ROI of BIM. Incorporating soft costs into ROI calculations can help companies better assess the economic impact of BIM implementation and make informed decisions. Moreover, the inclusion of soft costs can overcome personal and company resistance to change by addressing uncertainty about the ROI of BIM. In conclusion, determining the ROI is the last step in the pathway before personnel and the company decides to implement BIM, and calculating the soft costs is crucial for making informed decisions about BIM implementation.
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