Calculating ROI in BIM FM Integration
Making some reasonable and conservative estimates and combining these with data from the 2009 IFMA Survey of Maintenance Data, it is possible to calculate a rough return on the investment in the effort to collect the data needed for BIM FM integration. The significant advantages identified above can then be quantified and put in some perspective.
- Base cost estimates on a typical office headquarters with 400,000 gross SF with 346,620 rentable SF (ratio of 1.154 GSF/ RSF) with a useful life of 25 years. This building type was chosen because it has by far the largest number of responses in the IFMA survey cited above (431 out of 1,419 or 30 percent) and thus represents the most reliable data.
- Initial costs to create integrated system: This includes the investment in systems, data collection and verification, training , and related expenses needed to support integrated BIM FM: roughly $ 100,000 (based on personal interviews with industry professionals).
- Ongoing costs to maintain integrated system with updated information to reflect changes to building and its equipment: 1 FTE at $ 125,000/ yr (fully burdened) working 25 percent of time on this activity: $ 31,250 per year. This percentage is an average over the year and will vary from 0 to 100 percent, depending on the number of changes that need to be entered.
- Initial savings resulting from less labor effort required to gather the information about spaces and equipment. This data is available at the start of building occupancy because it has been captured during the design and construction process rather than after building turnover. This saving avoids the cost of two months for two FM people doing initial data gathering of building maintenance data: $ 41,667.
- Ongoing savings from a number of sources:
a. Assumed cost of O& M (from 2009 IFMA survey) mean value $ 1.98 per GSF (or $ 2.28 per rentable SF).
b. O& M savings assuming that better access to accurate information will save 0.5 hours per work order, with 1,600 work orders per year and a total burdened labor rate of $ 50/ hr. This yields a savings of $ 40,000 per year or $ 0.10 per GSF.
c. Assumed utility costs (from 2009 IFMA survey) mean value $ 2.39 per GSF.
d. Utility cost savings assuming that improved maintenance and performance of equipment will reduce energy costs of at least 3 percent. This yields a savings of $ 28,680 per year or $ 0.07 per GSF.
e. The total costs for O& M and Utilities are $ 1,746,295 per year or $ 4.37 per GSF.
f. The total savings per year is $ 68,680 or $ 0.17 per GSF, which represents 3.93 percent of these costs.
6. ROI calculations:
a. Net initial investment is $ 100,000 reduced by $ 41,667 of initial savings, yielding a one-time investment of $ 58,333.
b. Annual savings over the 25-year lifetime of the building is $ 68,680 − $ 31,250 = $ 37,430/ yr.
c. If we assume an owner interest rate of 6% on invested funds, the present value of $ 37,430 per year over 25 years is $ 478,481.
d. This must be reduced by the initial cost to yield a net present value = $ 420,148.
e. This can also be expressed as an internal ROI of 64 percent.
f. The payback period for the net investment = $ 58,333/ $ 37,430 = 1.56 years. Granted these are rough calculations, but they are based on the best data the author could obtain at this time.
The reader is invited to calculate revised data based on his or her own data. The preceding results, however, exclude potential “soft” savings from better comfort (temperature and humidity controls), fewer breakdowns, better inventory control of spares, extension of life for equipment, and use of combined model for remodeling and upgrades. Thus, the results should be conservative. Even if the calculated result is off by a factor of 4, which is quite unlikely, it warrants adoption of BIM FM. There is little risk on the downside (except from lack of knowledge) and considerable room for real benefits. Clearly, this is an investment where understanding what is desired and having a clear plan to achieve these results are critical requirements.
This survey shows that the mean maintenance cost of all types of facilities is $ 2.22 per SF (in 2007 dollars). This equates to $ 1.97 in 2002 dollars (comparable to those in the NIST paper).
The following information was reported by Jim Whittaker, president of Facility Engineering Associates, P.C. (FEA). A government agency that manages and operates facilities across the United States has 578 buildings of various types on the West Coast with an estimated area of 7 million square feet and a current replacement value (CRV) of $ 2.5 billion ($ 366/ SF). By automating and generating good preventive maintenance programs and using CMMS to manage and track performance they were able to optimize their capital asset replacement decisions and extend asset/ equipment useful life (EUL) by an average of 9.8 years over an average industry EUL value of 18.6 years (a remarkable increase of 53 percent). This extension applies to roughly 60 percent of the total asset value. Thus, extending the life of these assets represents an estimated ownership savings of $ 28.4 million per year or about $ 4.09/ SF/ yr or 1.12 percent of the CRV per year, a very impressive result.