The financial case for implementing a Project Extranet has been based around demonstrating and quantifying the size of cost savings the system will generate for a client/project.
The classic method of cost justification has been to use theoretical print and postal usage and estimate how employing an Extranet might reduce this.
Cadweb Ltd now provides a print service, which enables us to move this methodology from the theoretical to the actual, by analysing real data. We have used data from a large (£110m construction value) project, analysing the amount of drawings being sent for print as a proportion of the total, enabling us to calculate the actual amount saved by using Cadweb.net on the project.
From these actual figures to date (the project is only 45% through the planned program) savings of over £500,000 have been made. It is conservatively predicted that by the end of the project about £725,000 will be saved. These are the first real figures to be published.
Use the "Return on Investment" Calculator below to calculate the savings you can expect on your project:
Total Savings
These print figures alone justify the use of Cadweb.net on a project. However, no actual calculation of the main savings that Cadweb.net generates for a project (estimated to be around 5% of the project’s value) has been made because they have always been "Unquantifiable" e.g. improvements in team:
- communications,
- collaboration and
- quality of information.
The next step is to identify specific processes that improve when Cadweb is used and elucidate some metrics to measure their financial benefit: The speed of resolution of RFIs is an obvious area to start.
Appendix Cost Savings Calculations
Set out below are the detailed workings showing how the actual figures have been calculated. These are applicable and can be used for all projects regardless of their size.
From our experience (10 years) we know that typically between 4,000 and 8,000 files per £ Million of construction spend are generated on any given project. Of these 56% will be drawings therefore for the £110M project in question we can predict that there will be approximately 462,000 drawing files (including all revisions) generated by the end of the project.
The project in question started on site in April 2003 and is due to complete in September 2006 and at present is on program. Therefore it is 19 months into a 42 months program (45% complete). To date on the project there are 154,378 original documents on the system generating 571,575 files (an average distribution of 3.7). Of these original documents 86,619 (56%) are drawings. The print breakdown is as follows: -
23,670 documents have been printed so far (15.3% of the total) the balance, 84.7 % have been exchanged electronically. Of these prints 18,770 are drawings (21.6 % of the 86,619 total number of drawings) therefore 78.4% of drawings are being exchanged, acknowledged and read by Cadweb.net users without being printed.
Cost Savings Analysis
If we assume an average print/dispatch cost is £2.00 per copy the cost savings to date are as follows:
Actual Cost of Drawings Printed to date for the entire project:
18,770 x 3.7 copies x £2 = £138,898
Actual Printing Cost SAVING from Drawings sent via Cadweb.net to date for the entire project:
86,619 – 18,770 = 67,849 Drawings not printed x 3.7 copies x £2 = £502,082
If we extrapolate this data to the conclusion of the project we can estimate the total cost savings Cadweb will generate for the project. Given that there have been 5,196 files generated so far per £1m of construction spend and the program is 19 out of 42 months complete (or 45%) We predict that there will be 7,500 files per £1m of construction spend by the completion of the project. Therefore: -
7,500 x 110 = 825,000 files in total of which 222,973 (825,000 / 3.7) will be original documents. 56%, or 124,865 of these will be drawings and 21.6% of these drawings will be printed or 26,971
Estimated Total Drawing Print Cost:
26,971 x 3.7 copies x £2 = £199,585
Estimated Printing Cost SAVING from Drawings sent via Cadweb.net by the end of the project:
124,865 – 26,971 = 97,894 x 3.7 copies x £2 = £724,416
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