The NIST Report on Interoperability

In the AECbytes feature article on the IFC building model, I described how the increasing interest in building information modeling in the AEC community was also bringing the issue of interoperability—integration of the various model-based applications into a smooth and efficient workflow—to the forefront of professional attention. This concern was very much in evidence at the last AIA Technology in Architectural Practice conference held in Oct 2003 in San Francisco (see Cadence AEC News Tech #108). From that perspective, the report recently released by NIST (National Institute of Standards and Technology) that puts an actual tag on the cost of inadequate interoperability will touch a nerve with AEC professionals—the estimate is $15.8 billion per year! This issue of the AECbytes newsletter provides a brief overview of this 210-page report and discusses some of its key findings.

About the Report

The report entitled "Cost Analysis of Inadequate Interoperability in the U.S. Capital Facilities Industry" was released by NIST in early August. Prepared by a team of researchers from RTI International and the Logistics Management Institute, the report captures the findings of a study commissioned by the Building and Fire Research Laboratory and the Advanced Technology Program at NIST to identify and estimate the efficiency losses in the U.S. capital facilities industry resulting from inadequate interoperability among computer-aided design, engineering, and software systems. Although the focus of the study was on capital facilities—commercial and institutional buildings and industrial facilities—the findings are of relevance to the construction industry at large.

The motivation for undertaking this study was in recognition of the fact that the use of IT (information technologies) has not yet revolutionized the construction industry in the way it has done for the manufacturing and service sectors. While the computer, automobile, and aircraft manufacturers have been successful in improving the integration of design and manufacturing, harnessing automation technology, and using electronic standards to replace paper for many types of documents, the construction industry lags significantly behind in all these aspects. Efforts to improve the integration and use of automation technologies have been slow because there were no actual numbers available to quantify the increased cost burden imposed by inadequate interoperability. By providing this estimate through the study, NIST hopes to promote awareness of the importance of interoperability among building owners and operators, AEC firms, and software vendors, highlighting both challenges as well as opportunities. The study report describes both the qualitative and quantitative findings that were used to arrive at the $15.8 billion estimate, analyzes the barriers to improved interoperability, and provides recommendations on how the barriers can be overcome.

The full study report can be downloaded from the NIST website by following this link: http://www.bfrl.nist.gov/oae/publications/gcrs/04867.pdf.

Key Findings of the Study

The study, conducted in the year 2002, was based on interviews and surveys with 105 individuals from 70 organizations representing all the stakeholders in the industry: architects and engineers, general contractors, specialty fabricators and suppliers, and owners and operators. By comparing current business activities and costs related to inadequate interoperability—manual reentry of data, duplication of business functions, and the continued reliance on paper-based information management systems—with an ideal scenario in which electronic data exchange, management, and access would be fluid and seamless, the study quantified $15.8 billion in annual interoperability costs for the capital facilities industry, representing between 1-2% of the industry's revenue. It adds that this figure is, in fact, likely to be a conservative estimate, as there were additional significant inefficiency and lost opportunity costs related to interoperability that were beyond the scope of analysis of the study.

Another interesting finding from the study was the breakdown of the interoperability cost estimate across the stakeholder group and by the lifecycle phase. Owners and operators bore the highest share: $10.6 billion, about two-thirds of the total estimated costs. Architects and engineers had the lowest interoperability costs at $1.2 billion, while the general contractors and specialty fabricators and suppliers bore the balance at $1.8 billion and $2.2 billion respectively. The breakdown according to lifecycle phase shows the highest cost at the operations and maintenance phase, $9.1 billion, followed by the construction phase at $4.1 billion, and finally, the planning, design, and engineering phase at $2.6 billion.

Thus, the study shows that the greatest burden of inadequate interoperability is borne by the owners and operators during the ongoing operations and maintenance of a facility. This is a logical finding, considering that problems with information management and accessibility can seriously hamper efficient facilities management and operation. All the inefficiencies in the upstream processes of design and construction will add to downstream costs.

The study concludes by providing some recommendations on how to improve interoperability and reduce waste in the construction industry: improve communication between all the stakeholders; provide incentives to architects to give continuously updated project information to the other players; provide incentives to software vendors to integrate data and information standards into their systems; allow for additional costs in technology implementation upstream that will yield benefits downstream; use electronic document management (EDM) and enterprise resource planning (ERP) systems that can integrate the graphical and database systems for more effective decision making; promote greater use of neutral file formats; manage and organize correspondence files effectively to retain critical project data; promote universal acceptance of electronic signatures to minimize reliance on paper documents; link schedule and cost data; allow access to data on handheld devices to minimize the use of paper on construction sites; use Radio frequency identification (RFID) tags for materials inventory management; use building information models to connect design files with facilities management and building control systems; and adopt online collaboration tools for improved communication, reduced response time, and greater accountability.

The bottom line is that a new delivery model is needed that provides financial motivation to all project participants to optimize value for the whole project rather than just for their tasks alone.

Analysis

The term "interoperability" in this report is used in a broader sense than the traditional limited concept of the term, commonly perceived as the ability of software applications to exchange data meaningfully with each other. The NIST report defines interoperability as "the ability to manage and communicate electronic product and project data between collaborating firms' and within individual companies' design, construction, maintenance, and business process systems." It sees interoperability really as integration—of the processes and workflows of all the participants, across all the phases of the lifecycle of a facility.

Thus, the lack of standard file formats for representing building-related data and processes is only one of the factors that contributes to the $15.8 billion interoperability waste estimate. Other factors that contribute to the problem, whose effects have also been quantified into the estimate, include the highly fragmented nature of the industry, the continuation of paper-based business practices, and inconsistent technology adoption among all the participants in the design, construction, and occupation and maintenance phases. This means that the onus of bringing in greater interoperability and reducing the waste does not rest only on the vendors of software applications, but equally, if not more, on the industry professionals themselves. They need to give up paper-based processes and embrace technology more whole-heartedly. They all stand to benefit, in particular the owner/operators, who shoulder over 30% of this loss and need to therefore drive the entire team towards more widespread and efficient use of technology. Without this push, the pace of change will be very slow and the potential for significant cost savings in the construction industry will stay untapped.

About the Author

Lachmi Khemlani is founder and editor of AECbytes. She has a Ph.D. in Architecture from UC Berkeley, specializing in intelligent building modeling, and consults and writes on AEC technology. She can be reached at lachmi@aecbytes.com.

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