Let’s Believe in Our Own Future
Posted: August 27th, 2009 | Author: Scott Simpson | Filed under: Best Practices, Economy, Leadership, Professional practice, Strategy, Sustainability, Technology | Tags: AEC, BIM, IPD, LEED, new economy |
Scott Simpson
While no prediction is ever 100 percent correct (including this one!), we do know this: Sooner or later, the current recession will subside. When it does, things will be different. The conditions that existed between 2003 and 2007, which created unprecedented prosperity worldwide, will not be returning. It follows that the successes of the future will not look like the success of the past.
Over the next five years, the A/E/C industry will undergo a profound transformation, powered by the three primary game-changers of building information modeling (BIM), integrated project delivery (IPD) and Leadership in Energy and Environmental Design (LEED). BIM is a technology, IPD is a process, and LEED is an attitude. Individually, each is very powerful.
Together, they combine to exert huge leverage for change. All three are at the tipping point; there is no turning back.
BIM provides a way to connect the silos of expertise that have traditionally divided the design and construction process. The increased transparency of who does what makes the interdependency among all the key team members painfully obvious. The traditional model of design/bid/build promotes a culture of self-defense, with each player on the team incentivized to consider individual interests first and team success second. With BIM, this is no longer possible; it creates a whole new sociology of design. Ironically, BIM promotes both creativity and predictability in equal measure. It’s a powerful design tool yet equally adept at demystifying design documents, bridging the gap between design intent and project execution from conception to creation.
IPD takes this a step further, substituting a single, inclusive contract that aligns the interests of the owner, architect, and construction manager. What a concept! The benefits are as obvious as wheels on luggage. IPD invites a whole new approach to decision making. Since IPD represents a truly integrated team, all the key players are at the table from day one. The traditional sequential approach no longer applies. With IPD, all the brainpower in the room can be focused like a powerful lens on the problem at hand (much as parallel processing does for computing), which leads to better, faster, and more creative solutions every time.
LEED symbolizes a profound social and political shift from an economy based on consumption to one based on the wise stewardship of shared resources. In the past, the winners were the ones who made the most or consumed the most. With sustainable design, values have shifted 180 degrees, inspiring us to ask how we can do more with less. Over the useful life of a building, even small improvements in energy use, water consumption, and air quality create huge benefits. Sustainable design is like BIM and IPD in that it forces us to recognize our interdependency — no one can win unless everybody wins. It creates an unbreakable bond of mutual interest.
As we consider what’s next, it’s important to keep in mind that design is both a noun and a verb — a thing as well as process. It’s also about creating value. As currently configured, the A/E/C industry is acknowledged to be hugely inefficient. About 37 percent of all construction materials end up as waste, some 30 percent of all projects do not meet budget and schedule, and more than 90 percent of clients believe that design documents are insufficient for their intended purpose.
A conservative estimate is that of the $1 trillion spent on construction each year, $300 billion is wasted. But here’s the good news: We can view that waste as a resource. By using new technologies, processes, and attitudes (BIM, IPD, and LEED), the waste can be re-deployed, funding innovation. The result will be better, healthier buildings, constructed faster, for less. Everybody benefits — owners, architects, constructors, and the public.
This is a natural and inevitable outcome of the post-recession economy, which will demand a new accountability for value creation. The downturn imposed a certain discipline. It made us much more cognizant of what we do, how we do it, and what we spend. Viewed correctly, this discipline, which seemed harsh at first, is actually refreshing. It opens the doors to new ideas, and as designers, ideas are our stock in trade. Going forward, we should behave as if we believe in our own future. The rest will follow.
LEED is not a a synonym for “sustainable,” but it is one option. It is not enforceable, however. Any thoughts on what’s going on on the Green Construction Code (IgCC)?
Scott, you nailed it. Thank you. Still, it gets us thinking about the future brain power of those in our industry. Is the end of the adversarial A/E/C industry in sight? How will social networking sites such as facebook change the way architecture services are consumed? Is the architect evolving as fast as the opportunities are? Will artificial intelligence save the design professions or the opposite perhaps?
Scott, great article and I agree with your observations. The human factor in any equation has the highest degree of variance (egos).
The success of both BIM & LEED is dependent on the success of IDP. Successful IDP requires that the entire project team (including owners) is nertured into a cohesive effort around a single objective, the successful completion of the project.
As architects we must embrace BIM, IDP, LEED and leadership in developing new methods of project delivery.
Hi, Scott. I have been thinking about IPD for some time, so this seems to be as good a place as any to discuss my one concern. To me, IPD is as much an attitude – as you describe LEED – as it is a process, maybe even more so. But one aspect of the way IPD is being presented – in some circles – concerns me.
I fully agree with your major points about IPD: “What a concept! The benefits are … obvious;” “IPD represents a truly integrated team;” and “With IPD, all the brainpower in the room can be focused.” That is what I call ‘attitude’. But I do not understand how or why this is a result of “substituting a single, inclusive contract” into it. Are contracts the motivating force driving our attitudes?
Here is the reason I am concerned. I worked with a 100+ person firm at which 30+% of its annual billings consistently come from K-12. Further, on these projects, because they are almost all fixed fee, the firm averages a 4.0 billing (net) multiplier, which also translates into 90+% of their operating profits. They achieve this by consistently being that good at such projects.
The way I have seen IPD being presented – in some circles – is that the AE team works at cost, and any profit is somehow determined later. Even as a CFO, the first time I saw a BIM demonstration and heard an IPD presentation, I became a believer – and advocate – because, as you say, “The benefits are … obvious.” However, I still do not know if I want to, nor do I think IPD requires a firm to, give up a very profitable fixed fee.
(Actually, what that particular firm did – later on – was to set up a construction division of their own, and started doing design-build – awarded on a professional services, fixed-fee basis, with an open book, guaranteed-max construction price, and extra monies being returned to the school districts! However, with the GC’s fixed-fee, they REALLY made money!)
See you at the next conference.
As a newcomer to the AEC space — as a marketer with a worldwide leader in document management services and technology; distribution logistics; and on-demand print media solutions– I welcome and wholly agree with Scott’s implicit celebration of American innovation and ingenuity. How true, that in difficult times, it’s invariably innovative approaches involving technology and process and attitude that lead to recovery. Especially neat about innovations in BIM-IPD-LEEDS is that they offer an opportunity for mutual objective-setting and work partnering that promises a recovery shared by and for all.
As a new BIM user and recent graduate, i could not agree more with you Scott, i believe that this is the future of Architecture. I believe that the time is more well spent creating a more transparent and efficient design than finding ways to protect yourself from the other trades involved in the project. BIM eliminates cutting corners, therefore it cuts cost, and time.
Now if we could only convince our superiors the advantage of BIM.
I would like to pick up the predictions where you have left off.
The combination of a. sustainability, b. IPD, and c. BIM, will lead to an AEC industry that looks like this:
Design-Build will become the standard mode of project delivery as construction firms (who have greater financial leverage than design firms) begin to acquire design firms and offer comprehensive D/B, turn key project solutions. This is the definition of a “truly integrated” firm.
Qualifications Based Selection legislation will be amended or repealed.
These new fully integrated firms will become highly specialized in the projects that they produce.
Competition among these firms will be based on a combination of cost and scope, using bridging documents as the basis of competition.
IPD will become an internal operation to the firms themselves rather than terms for relationships between multiple firms.
There will emerge a kind of “Super Architect” that will operate as a consultant outside of these firms producing schematic design and bridging documents, however, most architects will be employed within these “truly integrated” firms.
LEED will morph into various regulation based on more specific requirements focused on energy use and environmental practices. The point system will disappear.
BIM will be developed within the “truly integrated firms” on a proprietary basis, and will, along with other efficiency enhancing practices, become the differentiating competitive factors that will allow some firms to gain market advantage.
No Charge.
Well said — we at GNU also believe the future is about continuing to educate our people on how we operate financially, share our successes with them and continue to focus on process and training — there will always be new trends within any industry but having a Team ready, willing and able to change to increase our clients experiences is the real dealmaker !!!!
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