Newswise — Better software systems could have saved the U.S. building and construction industry as much as $15.8 billion during 2002, according to a new study by the National Institute of Standards and Technology, conducted by RTI International and LMI.
The study assessed the extent of inefficiencies resulting from inadequate software interoperability used within the industry's commercial, institutional and industrial building sectors.
Based on interviews and survey responses from 70 organizations involved in various aspects of the industry, the study provided the first quantitative look at the issue.
"New computer technologies are rapidly changing the tools used to design and construct buildings," said Michael Gallaher, lead researcher on the project for the Health, Social, and Economics Research unit at RTI International. "While these tools have the potential to revolutionize the industry, improved interoperability between these technologies could significantly reduce costs."
The study assessed interoperability costs associated with design, engineering, facilities management, business software systems and redundant paper records management across all facility life-cycle phases.
The study quantified the costs by comparing current business activities and costs with a hypothetical scenario in which electronic data exchange, management, and access are fluid and seamless. This scenario implies that needed information be entered into electronic systems only once, and it is then available to all stakeholders instantaneously through information technology networks on an as-needed basis.
The concept of fluid and seamless data management encompasses all process data directly related to the construction and facility management process, including initial designs, procurement information, as-builts, and engineering specifications for operations and maintenance. The difference between the current and counterfactual scenarios represents the total economic loss associated with inadequate interoperability.
According to the study, $10.6 billion, or about two-thirds of the total estimated costs in 2002, were borne by owners and operators, who incur these costs predominantly during ongoing facility operations and maintenance.
In addition to the costs quantified, respondents indicated that there were significant additional inefficiency and lost opportunity costs associated with interoperability problems that were beyond the scope of the study. Thus, the $15.8 billion cost estimate developed in this study is likely to be a conservative figure.
Architects and engineers had the lowest interoperability costs at $1.2 billion. General contractors and specialty fabricators and suppliers bore the balance of costs at $1.8 billion and $2.2 billion, respectively.
All stakeholder groups expressed the need to improve the exchange of electronic data to shorten design and construction time, even though many couldn't quantify the potential savings.
Interoperability problems stem from the highly fragmented nature of the industry. Problems are further compounded by the legacy of paper-based information management, the slow adoption of new technologies and antiquated business systems.
The complete report is available online at http://www.bfrl.nist.gov/oae/publications/gcrs/04867.pdf.
About NISTFounded in 1901, the National Institute of Standards and Technology is a non-regulatory federal agency within the U.S. Commerce Department's Technology Administration that develops and promotes measurement, standards, and technology to enhance productivity, facilitate trade, and improve the quality of life. For more information, please visit http://www.nist.gov.
About RTI InternationalRTI International is an independent, nonprofit organization dedicated to conducting research that improves the human condition. With a staff of more than 2,500 people, RTI offers innovative research and development and a full spectrum of multidisciplinary services in health and pharmaceuticals, advanced technology, surveys and statistics, education and training, economic and social development, and the environment. For more information, please visit http://www.rti.org.
About LMI LMI is a government consulting firm, chartered to assemble the most talented, creative analysts and researchers and focus them on advancing all aspects of government management. LMI's not-for-profit organization concentrates resources on its mission and ensures unbiased service to government. LMI has a long-standing reputation for excellence in all aspects of government management. Since 1961, it has helped federal managers make informed decisions that achieve desired results. For more information, please visit http://www.lmi.org.
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