AECbytes "Building the Future"
Article (April 4, 2013)
Measuring BIM's Disruption: Understanding Value Networks of BIM/VDC
John Tobin, LEED AP
Director of Architecture, EYP
“And no, we don't know where it will lead. We just know there's something much bigger than any of us here.”
The long-term impact of any innovation is often not understood when it initially emerges. When 3D model-based architectural production software first appeared, for example, it was heralded as a basic process improvement—generating design documentation from a single source model would improve coordination. That improvement certainly materialized, but along the way, a fundamental transformation of design services also occurred as BIM models proved increasingly valuable for numerous uses beyond the mere drawings they made possible.
The initial goal of “smarter CAD” morphed into a BIM movement, which in turn morphed into a BIM/VDC movement, where BIM sows information in a model environment, while VDC (Virtual Design and Construction) largely harvests that information for downstream uses including commissioning, facility management, and construction logistics. It’s a long way from “integrated drawings and schedules.” The depth of the change driven by the launch of BIM was certainly unanticipated.
The phenomenon of a new capability eclipsing its predecessor is not unique to BIM; many innovations that initially seemed straightforward improvements to an established process have ultimately transformed the original process in unexpected ways. Work on this topic by business scholars helps shed light on what the potential trajectory of BIM might mean to the AEC industry.
Figure 1. Innovation can be either sustaining or disruptive. Normal improvement over time helps sustain incumbents. A common disruption on the other hand—such as a price drop—starts to compete with the high-end incumbent offering.
Sustaining vs Disruptive
In The Innovator’s Dilemma, Clayton Christensen first distinguished two contrasting types of innovation: “sustaining” and “disruptive.” Sustaining innovations offer regular improvements to an established process, increasing performance over time within existing market conditions or “value networks.” Disruptive innovations, on the other hand, create entirely different market conditions and often demonstrate their ultimate value against newer, altered criteria.
To illustrate his theory, Christensen studied 15 years of innovations in computer disk-drive technology, a sector where major breakthroughs occurred in 12 to 24 month intervals. He found that one interval in particular stood out—the point at which 3.5” drives appeared while 5.25” units were the reigning standard. No desktop manufacturers seriously considered 3.5” drives at first, because they initially were slower and costlier than the standard 5.25” models, and they stored less data. What unexpectedly propelled the 3.5” drive to success was the rise of laptop computing, a neglected market where smaller, lighter drives enabled workable mobile computing. In this market, the otherwise “substandard” drive’s performance offered the distinct advantage of portability over the prevailing technology. Before too long, the 3.5” drives became standard, not just for laptops but for desktop computers as well, and the 5.25” drive perished.
Figure 2. Value networks of two competing disk drive options circa 1988. The 3.5” drive added portability, which more than compensated for its initial lower speed and capacity at a higher price.
The Disk Drive study highlights the importance of what Christensen calls “value networks” to understanding innovation and predicting its ramifications. A value network can be thought of as the realm of market expectations and capabilities in any particular industry. In the era of the 5.25” disk drive, the prevailing innovation thrust was to create drives that could store more and more data on ever smaller and cheaper drives; the value network of disk drives therefore comprised storage capacity, access speed, and price.
The introduction of the 3.5” drive, however, dramatically shifted the established desktop computer-based value network of capacity, speed and price. Now, portability—allowing your work to travel with you—added sufficient extra value to users that it made up for the initial shortcomings of the 3.5” drives and became an important part of the calculus of computer development. This is the recurring pattern in disruption, where an initially low-performing fringe activity quickly becomes the new normal.
Figure 3. Disruption occurs in two common ways: a low-end shift lowers the price and often sacrifices performance; a new-market shift creates new value networks that initially may not compete with the incumbent technology.
Disruptive innovations occur in two ways: they either lower the price point for a product, or they create new markets that the previous technology never imagined. The first type (illustrated in Figure 1) is known as a “low-end disruption,” while the latter (shown in Figure 3) is a “new-market disruption.” In a new-market disruption (which includes BIM), the new technology “competes against non-consumption”—that is, it satisfies a need that was not previously anticipated or even possible to meet. Christensen notes:
Although new-market disruptions initially compete against non-consumption … as their performance improves, they ultimately become good enough to pull customers out of the original value network into the new one … The disruptive innovation doesn’t invade the mainstream markets … [and] because new market disruptions compete against non-consumption, the incumbent leaders feel no pain and little threat until the disruption is in its final stages. (Christiansen 1997, #; emphasis added)
This last observation is significant: new-market disruptions creep up on incumbent technologies because they initially add new consumers to a market; only later does the gravitational pull of the new value network draw consumers from the existing market. It’s also common for existing value networks to remain in place as the disruption progresses, and for the incumbents to overlook the disruption posed by the new value network until it is too late. For example contractors, the early adopters of BIM technology, were a new consumer base for the existing software market which had originally targeted architects and engineers, but today BIM is also decisively impacting the incumbent CAD market in fundamental ways.
Christensen describes several other industries—hydraulics, steel processing, and office printers—where disruptions precipitated the fall of incumbent business giants. In the office printer market, for example, a battle erupted between inkjet and laser printers. Though initially derided for their slow speed and poor graphic quality, the cheaper inkjet models ultimately won out over the faster, better quality laser printers because the inkjet quality was good enough for many users and added the convenience of having a personal printer at your desk. Before long, the cheaper low-volume inkjet models became higher-volume, higher-quality printing units and grabbed a large share of the market. Understanding the potential impact of innovation requires a systematic comparison of the characteristics of each technology to detect shifts in value that create new value networks.
Construction’s Value Network
The discussion of value networks is critical to understanding the current state of the AEC industry, in which two value networks are simultaneously at play, although many participants may not be aware of it. The earlier value network—conventional delivery and scope of services—involves design activities, paper delivery, and documentation efficiency. The newer value network also involves design activities and (for a while at least) paper delivery and documentation efficiency but also adds model delivery, embedded information, and third-party downstream uses—fabrication, clash detection, quantities—as well as ever-increasing expectations on an ongoing basis, such as “BIM in the Cloud.” Two simultaneous value networks help explain why people talk about BIM in completely different ways. One group sees BIM in the context of the old value network, while the other sees something entirely new.
Figure 4. BIM’s value network and CAD’s value network are very different: BIM/VDC presents brand new opportunities beyond traditional design services.
Value network thinking also helps explain why the introduction of CAD was not a disruption decades ago: CAD competed within an existing value network very similar to manual drafting—paper delivery and documentation efficiency. BIM, on the other hand, represents a disruption because it quickly introduced new capabilities to the existing value network that have spawned new markets and attracted new customers, as demonstrated by the rise of the contractor’s use of BIM and, more recently, the owner’s interest. In fact, designers—the primary users of the existing CAD technology—have not known exactly what to do with the new capabilities BIM has added to the value network. In many cases, contractors have had to tease BIM’s potential out of the design professions. It was contractors who first exploited the capabilities of the new technology to create a new value network, and it is the keen interest of the contracting community that is largely fueling an even further shift from BIM into VDC.
Embrace the Strange
The lukewarm response to innovation by some groups is not peculiar to the design industry. In Christensen’s book, the actual “innovator’s dilemma” is that established customers are biased to support advances within the same value network in which they currently operate. As a result, they don’t initially understand the need for a new product or process and typically don’t “get” the new value network until much later. For example, if a typical owner were asked today which design information improvements they wanted, they would likely say “better quality drawings” rather than “data-rich models.” Similarly, a typical design group would likely say it wants faster drawing production and better quality to improve efficiency and profit. While better drawing quality is definitely a worthwhile goal in fast-track and cost-constrained projects, this approach fails to consider other possible approaches that may deal with the problem in different ways.
There have always, however, been savvy first adopters who sense the opportunity of a new value network promptly. For example, several forward-thinking owners have already jumped at the chance to leverage the transformational capabilities offered by BIM/VDC. Federal owners such as GSA and USACE, some universities (notably Penn State, Arizona State, and USC), and multiple state legislatures including Ohio and Indiana stand out for mandating sophisticated BIM deliverables from design and construction teams. While further evolution of the new deliverables is ongoing, it is already clear that we are witnessing the emergence of a new-market sensibility; BIM/VDC is a disruption—not an improvement—to CAD-based design processes. Furthermore, it is easy to misinterpret the arrival of the new BIM value network as the triumph of one software approach over another, when in reality the major disruption BIM presents is the unprecedented services and downstream activities that it makes possible, not just the fact that it is a different software standard.
There are three keys to successfully navigating BIM/VDC’s future value network for the AEC industry: one, to understand that disruptive innovation is pervasive and somewhat inevitable—it is a fundamental business process that sooner or later hits all industries; two, to remember that our industry currently straddles two distinct value networks which demands a keen awareness of their different performance expectations; and three, to remain open to some really disruptive potential in the future deliverables that the ever-evolving BIM value network permits. It is critically important to recognize the true nature of innovation to appreciate its potential impact. We should embrace the initial strangeness of BIM’s new value network and the opportunities it presents, because recognizing that we’re witnessing a wholesale revolution, rather than a mere enhancement of existing processes, is vital to successfully surviving change, rather than being blindsided by it.
About the Author
John Tobin is a licensed architect and is Director of Architecture at EYP, an architecture/engineering firm headquartered in Albany NY. He has more than 25 years of design, practice, and technical expertise in architecture. At EYP he oversees both architecture and engineering efforts, and advances the technical direction of EYP’s work, spearheading the integration of architectural and engineering design particularly related to BIM and new tools. Prior to joining EYP, John taught architecture for almost a decade at Rensselaer Polytechnic Institute and has published on BIM and software issues.
John can be reached at email@example.com.
Note: AECbytes content should not be reproduced on any other website, blog, print publication, or newsletter without permission.
Have comments or feedback on this article?
Visit its AECbytes
blog posting to share them with other
readers or see what others have to say.
the Future > Measuring BIM’s Disruption > Printer-friendly