How can a construction company be certain that BIM is delivering cost and time savings on its projects?
The impending BIM 2016 mandate for all centrally procured public sector projects, along with BIM’s role in hitting the government’s Construction 2025 target of delivering projects 50 per cent faster, has been well publicised.
But Lubin Hoque, managing director of IT consulting firm G3G, argues that “to achieve efficiencies of such magnitude, it is critical for company stakeholders, and particularly commercial managers, to have an accurate, real-time view of the financial position of their contracts.
“Without this knowledge, how can companies know whether their projects are going to be completed on time and on budget?
“In a notoriously low-margin industry, it is critical that companies can accurately report and forecast cost and profit margin at any stage of a project to ensure they are delivered profitably and to the client’s satisfaction.
“This has major implications for how companies implement BIM.”
G3G works with construction and engineering firms to roll out enterprise resource planning and other IT systems which maximise operational efficiency. Increasingly, this includes BIM.
“To deliver the savings targeted by Construction 2025, particularly if BIM processes are extended to include 4D (time-related information to visualise a project’s duration) and 5D (cost over time against budget), the industry will require a step-change in the way it thinks about IT,” Mr Hoque says.
A common school of thought is that BIM software will be developed to include cost, time and ultimately operational performance (6D) dimensions.
But Mr Hoque takes a different view: “BIM should become integrated into a company’s wider IT processes - its ERP systems - instead of its BIM software and the users operating in isolation from the rest of the company.
“This approach to adopting BIM can help companies to deliver projects quicker and more profitably”
Lubin Hoque, G3G
“That way, commercial managers and senior directors have ready access to a project’s progress.”
This is a significant challenge, he acknowledges. Construction lags behind other industries in IT awareness; a 2014 survey by accounting software firm Sage found that some 35 per cent of firms do not even have a dedicated IT manager.
Added to that, ERP does not have a great image in construction. In a few high-profile cases, a botched roll-out has meant the expected efficiencies failed to materialise.
“The problem is ERP systems have ended up being used by only a minority of an engineering or construction company’s workforce, and have come to be regarded as a back-office system rather than being integral to business operations,” Mr Hoque says.
“But there are plenty of examples in construction of where ERP has proved a success, and we are now seeing companies use BIM as part of their ERP systems to deliver substantial time and cost savings on projects.”
One such company is OGN Group, which specialises in the oil and gas sector, providing engineering, design, procurement, project management and construction services.
The firm’s legacy, paper-based processes for accounting, project management, design and engineering, plus a lack of integration across the business, threatened to limit its efficiency.
G3G worked with OGN to implement its Business All-in-One template (one of G3G’s ERP packages), which has revolutionised the way the firm manages its engineering projects, according to OGN chairman Dennis Clark.
“We have broken down silos and reduced the cost of our processes by at least 25 per cent”
Dennis Clark, OGN
“We had a fixed-cost, rapid deployment of the SAP solution and were up and running on a live system in just four months,” he says.
“We have broken down departmental silos and reduced the cost of our business processes - from procurement to materials - by at least 25 per cent.
We also have the flexibility to add new functionality as needed.”
OGN also estimates that staff numbers would have needed to increase by a quarter to cope with increased workload. But thanks to the efficiencies of the new ERP system, they have remained constant.
Significantly, OGN’s 3D design modelling has been incorporated smoothly into the ERP system and its in-house engineering team can now integrate design with procurement and construction processes.
“It helps us keep sight of the project deadline, stay on budget and achieve our wider business goals,” Mr Clark says.
Mr Hoque adds: “OGN’s experience shows that, by using the latest ERP technology, engineering and construction companies can reconcile a 3D construction build model with job costs - both to date and estimated - in a single view.
“This approach to adopting BIM can help engineering and construction companies to deliver projects quicker and more profitably.”