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  • Writer's pictureDavid Penaloza

XR and rework + cost overrun

Updated: Aug 8, 2022

From “a picture is worth a thousand words” to “an experience is worth a thousand images”


How the spatial nature of XR tech will prevent rework and cut cost in home building

We all have been in that situation (or at least heard of it) where, in the final stage of a home project, there’s a big change order because Uncle John is disappointed and he pictured something completely different, claiming “This isn’t what I expected.” The resulting rework can include demolition, new designs, and new build timelines, as the customer’s cost gets higher. The professionals have constraints put on their schedule, and they may delay other projects to get this one concluded. Or, worse, their schedule dictates that the rework happens in the distant future. This negative feedback cycle is all too common in the industry, and it doesn’t have to be this painful for all involved.

Nowadays, it is estimated that about 85% of projects experience cost overrun, with an overall average overrun of 28% of the project,

which means that on average, a third of a customer’s final cost are extra expenses on top of the initial budget. It might seem low, but consider this on a million-dollar project and the numbers become pretty important. Come to think of it, even on the smaller projects, that money still matters to the customer. Considering that

70% of rework experienced in construction is a result of design-induced rework, and that 52% of that rework is caused by miscommunication, XR technology can help save up about $31.3 billion on costs for projects in the U.S. alone.

And what happens when the budget is completely tapped out, but there are still corrections to be made? The customer settles for something less than what was expected.

Expectations are often deemed unrealistic because they aren’t clearly communicated (or clearly understood). A customer hopes that the dialogue with professionals and the resulting blueprints will result in their idea being made manifest. And as professionals, you hope that their understanding of the project is accurate from the beginning. For all involved, the expectations can be more realistically set, budgeted, scheduled, and achieved, with Extended Reality (XR) solutions.


XR technologies have been ramping up and are about to see a boost of accelerated growth. Author and organizational consultant Geoffrey A. Moore, in his book “Crossing the Chasm,” talks about the technology adoption life cycle model, and how disruptive products will see massive use in the mainstream market, after a chasm that positions such emerging technology for success. Thanks to the investment of innovators in gaming and healthcare, the development of this XR tech is rapidly gaining traction, with more accessible prices on hardware. This is great news for the building and home development industries as XR is natively spatial - instead of being limited to traditional 2D pics, blueprints and screens, the space can be understood in 3D, which is ultimately the nature of the built environment. It’s where we live everyday.

There are 3 reasons why XR is so effective when it comes to reducing rework and cost overrun in home building projects:

  • Its 3D nature enables a creation environment that eliminates the friction on the communication between creators and customers. There is no better way to express and iterate on how you and your clients imagine (un)built environment, taking into account not everyone is trained on floor plans and reading schemes.

  • XR is fertile ground for collaboration, it allows creators (like architects and interior designers) to bring together different stakeholders (Including customers) in the same space, to virtually build a pool of space options, to better be able to select one that actually satisfies the needs, wants and dreams of the end user.

  • A tool for business intelligence: XR not only provides insights on customer’s interactions with space, but also a fair amount of quantitative and qualitative data on how to improve customer brand and product experience. As the hardware used to interact on virtual experiences is wearable, it becomes an important tool to gather customer data.

3D nature


Imagine what would happen if you brought your customers into a virtual environment that allowed them to feel being in the space before it is even built. Today, our traditional design processes rely on 2D images such as floor plans and renders. These can be a great tool for communicating between professionals, but in order to express creativity inputs to home customers, this effort is not enough to get them to understand the process. For the aforementioned “Uncle John,” things will be probably clearer if he is able to see a 3D non-built space on a 3D environment, vs seeing it projected on a 2D surface. Some Architectural firms like Mancini Duffy are discovering how the use of VR becomes a competitive advantage in their design process, as they engage with customers on a deeper layer of customization and collaboration by simulating the space and the daily use within it - think of the scene of the drawn kitchen layout in the tennis court of the movie “The Founder.

Collaboration


When mapping the value network of home design, we can find that it can become an infinite interconnected universe, and this abstract universe can become a digital design hub that brings all of the many stakeholders involved into a single space where they can collaborate. This increases the pool of options for the home buyers of the future, and for the buyer now, it more accurately solves requirements in terms of customizing the home space, as it can humanize home design. Brands like IKEA and AZEK are already using XR to showcase their products in different settings, which can not just display physical products for buyers to consider, but it allows for varying features and quickly exploring detailed options without resorting to shipping, returns, restocking. Their virtual environments have unlimited possibilities for their customers. These brands already store and carry their boundless options in a backpack and a VR headset.

Business intelligence


From other sectors like retail, we have learned that XR opens a new opportunity to get to know deeply our customers, as JLL analysts points out: “One other big advantage of the roll-out of AR is the opportunity for retailers to collect extensive data on the consumers interacting with their brand, as these platforms involve a significant degree of access to personal information. For consumers, it could mean a better shopping experience with their favorite brands.” And this is not limited to that industry, the possibility of interacting with home buyers in a simulated 3D environment is a great opportunity to learn from their preferences and thus, improve both our product/service, as we more intuitively enhance their overall shopping experience with our brand.

AR is redefining the concept of showrooms and product demonstrations and transforming the customer experience. When customers can see virtually how products will look or function in a real setting before buying them, they have more-accurate expectations, more confidence about their purchase decisions, and greater product satisfaction.
Porter & Heppelman, 2017

With the possibility to put the customer on a simulated spatial experience, and integrating on a single space products and solutions from different companies on the value network of home building, we are facing a future of effective collaboration during the design process of homes, thus changing the paradigm on how design decisions during the execution of construction projects, generate rework and cut overruns in the home building industry, AR for example,

eliminates dependence on out-of-context and hard-to-process 2D information on pages and screens while greatly improving our ability to understand and apply information in the real world.
Porter & Heppelman, 2017

Context is key.

If “Uncle John” sees a floor tile sample and makes a floor finish selection for his kitchen, it’s not at all the same as an informed XR experience. Imagine instead if he were to enter an immersive copy of his kitchen, with that tile installed, seeing how it contrasts with the island, how it complements the appliances and his selection of tall benches, and see how the spotlights he selected changes the feel of these tiles. In practical terms, XR technology is giving us the power to move the customers’ capability to make decisions in context at a moment when it is less expensive to make changes during the process of home creation, thus cutting rework and cost overrun in the home building process.

Chart 1: Change of paradigm on design decision-making process


 
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