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Modelling the costs of corporate implementation of building information modelling

Oluwole Alfred Olatunji (School of Architecture and Built Environment, University of Newcastle, Callaghan, Australia)

Journal of Financial Management of Property and Construction

ISSN: 1366-4387

Article publication date: 8 November 2011

Abstract

Purpose

The popularity of Building Information Modelling (BIM) has improved tremendously in recent years. The business sense it makes to construction small to medium‐sized (SME) organizations has also become vitally important, especially when the deliverables of BIM potentials are becoming more explicit than they were several years ago. Moreover, there is adequate evidence to suggest that an early adoption of BIM by construction SME organizations could mean marked sustainable business advantage to them. The purpose of this paper is to initiate a long‐term study on how BIM triggers market improvements in the Australian construction industry, to establish the specific impact of these on construction industry's contribution to Australian economy, also to develop a simple model on the cost of implementing BIM in a typical construction SME.

Design/methodology/approach

This research relies on evidence from literature to identify different operational models of construction organizations, namely; matrix, divisional, functional and networked business models. A definite approach was taken to articulate some contributory concepts and rationales which drive organizational response to technological changes across the identified four categories of organization structure models. Focus group discussion was the primary research method for this study, while additional data were collected from public sources. Respondents and data were sourced from two firms selected from each type of organization model. In the end, 24 industry practitioners from a range of Australian construction SME businesses that provide software and technical support services, consultancy and contracting services took part in the study.

Findings

Analysis of 32 sample cases revealed that BIM implementation costs were mostly defined by a range of cost variables, including software acquisition and technical support, hardware, training, services and implementation contingencies. On the average, software costs accounted for about 55 percent of total implementation costs. This particular cost descriptor was about five to seven times more than the cost of hardware (depending on the level of sophistication of operations, expected implementation outcomes and whether new hardware were used or existing installation were upgraded with BIM compliant drivers). The study also found that training cost was a third of software costs, while the average total cost of services, recruitment and contingencies, all added together, was about 5 percent of total implementation costs. In the end, a linear model was developed to predict the cost of BIM implementation in construction SMEs.

Originality/value

A preliminary version of this study has been presented in the 2010 edition of the International Conference on Information Technology in Construction (CIB W078). As a study in a new direction, it focuses on specific organization models and their unique responses to drivers of change. While other studies have looked into macro implementation of BIM, mostly without considering the peculiarity and dynamics of organization structure, this study has focused on construction SME businesses offering a wide range of services.

Keywords

Citation

Olatunji, O.A. (2011), "Modelling the costs of corporate implementation of building information modelling", Journal of Financial Management of Property and Construction, Vol. 16 No. 3, pp. 211-231. https://doi.org/10.1108/13664381111179206

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited