Last time I spoke about how technological changes, ones such a Building Information Modelling, can mean paradigm shifts in the industries that the changes affect. Disruptive technologies perpetually displace present technology in an upward shift, and we established that that upward shift is taking place
now in the AEC space. I mentioned that while it could be easy to see BIM as a marketing tool used by the most prominent technology providers in our industry, in reality it is a process swing that is only going to get stronger and deeper, faster.
While the above is true, the theory is clear in stating that business models are not disrupted overnight. So how could BIM disrupt the building industry?
Understanding Christensen’s theory of disruptive innovation
As mentioned previously, Clayton Christensen’s disruptive innovation theory was placed to explain what effect new technology can have on existing business models. The theory states that disruptive technology generally displaces low-end markets first; that being those customers who are happy with
a product that does just enough and are not willing to pay a premium for something that has features they do not necessarily need or want. As the new technology starts winning market share it gradually moves into more profitable segments, with customers who offer greater profit margins as they are willing
to pay a premium. The technology improves to provide productivity increases from existing methods until it meets the highest demands of the most sensitive customers, at which point the new technology has displaced the original technology since the whole market has experienced increases in productivity and value. The best example of this is personal computers disrupting the market for mainframes and minicomputers. PC’s hit a low-end market first (the technology wasn’t suited to those with greater usage demand), quickly moving up the segment ladder as the technology improved to displace the existing market leading products.
Applying Christensen’s theory to the building industry
If we apply Christensen’s theory directly to the building industry, the first users to adopt BIM would have been those in the residential building market. Working on less complicated projects (in most cases, although some residential developments can be quite complex!) and with a lower profit driver for BIM software and service companies, they would, theoretically, be the ones that were targeted and displaced first. We know that is not the case. In fact, it could be argued that for the building industry, the theory is completely reversed.
We know from either first-hand experience or by reading one of many case studies that can be found online that BIM is being used frequently on large construction projects, particularly high value commercial and healthcare facilities (Shanghai Tower; Cathedral Hill Hospital). The benefit of productivity increases on projects on this scale can equate to millions of dollars in savings, and as such the initial investment can be offset quite quickly. This is, on the other hand, the complete counter
of Christensen’s theory. The first market to be displaced by disruptive technology is the one that drives the highest profit.
Clayton Christensen might argue that BIM is actually a sustaining technology, and not a displacing technology. I’m sure that anyone reading this would agree that the challenge of BIM is that it requires a thorough reskilling from original methods of working, and we would all argue that that is rather
What we can takeaway is BIM, sustaining or disruptive, will impact the whole construction ecosystem and marketplace over time. That time is starting to become exponentially shorter as productivity enhancements are becoming more frequently realized in the development of construction projects.
We’ll have to wait and see when BIM reaches all types of construction projects. The release of products like Revit LT shows that software providers are already targeting other markets in the building industry. BIM for all.