IPD as a project development model: Why your marketing is as uncompetitive as a cement mixer in a Formula 1 race without this knowledge!
- Jörg Appl
- Jan 24
- 11 min read
With Integrated Project Delivery (IPD), the construction industry is relying on a modern, collaborative model that brings building owners, architects and construction managers together at the table before the project begins. IPD stands for close cooperation, shared risk and clear common goals.
But what opportunities and obstacles arise for your technical marketing and suitable offers – be it a software, a product or a service – from the perspective of an engineering firm, construction company, inspection engineer or supplier?
In this blog post – part of our series on technical marketing in the construction industry – ‘FROM Blueprints TO TARGET GROUPS’ shows how you can strategically exploit the potential of the IPD model.
The article ties in with topics such as design-bid-build, design-build, CMAR, bullshit marketing and the role of specialist planners in the construction industry.
You can use the links provided to delve deeper into these aspects and gain valuable insights for your strategy.
📚 Ready to put it into practice? At the end, you will find practical case studies that will help you to take your marketing skills to the next level! 🚀
Integrated Project Delivery (IPD) in the construction industry: a model for collaboration and efficiency
Integrated Project Delivery (IPD) is a project delivery model based on close cooperation and the possibility of jointly defining objectives between the parties involved in the project
In contrast to traditional methods, the IPD model has the potential to form a team of building owners, architects, engineers and construction managers before the project begins, enabling them to work together and share responsibility for the project's progress from the outset.
This model can support optimised planning and implementation and promote a fair distribution of risks and incentives between the parties involved. While traditional models such as design-bid-build clearly separate planning and building, the IPD model offers the opportunity to take a holistic approach. Key players could be involved in the planning process at an early stage, which, among other things, can facilitate the joint definition of project goals, more precise cost and time schedules, and coordination to minimise risks
One possible component of the IPD model is the joint incentive and profit pool.
Such a mechanism could reward participants for achieving project goals, such as adhering to budget and schedule or providing high-quality work.
At the same time, cost overruns or delays could be borne jointly, which could strengthen the motivation and sense of responsibility of all parties.
Compared to models such as CMAR, which maintain a division of tasks between the construction manager and the architects, IPD allows for the possibility of closer integration of responsibilities.
The expertise of engineers, architects, construction companies and other partners could be combined in an integrated team that works together throughout all project phases. This form of collaboration can positively influence the risk assessment as well as the quality and efficiency of the construction process.
Example:
In a major hospital construction project in Munich, the IPD approach was used to optimise the cooperation between the construction company, architects and engineers. All parties agreed that project success would be measured by two key criteria: adherence to the budget and on-time completion.
To this end, a joint incentive and profit pool was created, consisting of 5% of the total project budget. Savings achieved through efficient work and additional profits generated by innovative solutions, such as the introduction of a modular construction approach, were distributed according to a predefined key:
50% of the pool was divided equally among all the main participants to reward the basic participation.
30% went to the teams that contributed innovative solutions, such as an engineering firm that optimised the structural design and thus saved on material costs.
20% was distributed to the construction manager and the supply team, who together ensured the rapid procurement and assembly of components.
Sustainable and efficient solutions that reduce project risk and promote success can arise from intensive coordination between the parties involved. The IPD model illustrates the potential of the construction industry to further develop processes through collaboration and innovative approaches.
The IPD model is already widely used in the USA, particularly in large and complex construction projects, as it promotes early integration of all parties and focuses on efficiency and innovation.
In Germany, on the other hand, IPD is currently used less because public procurement is still heavily regulated by the Federal Procurement Act (Bundesvergabegesetz, VgV). However, the advantages in terms of risk minimisation and project success could make the model more attractive in this country in the future.
These differences require adapted marketing strategies. While in the US, an emphasis on partnership, flexibility and innovation is promising, providers in Germany should focus primarily on cost security, process optimisation and risk reduction to convince potential customers.
In order to better integrate IPD into possible marketing approaches, it is worth taking a look at other established models.
Comparison of marketing approaches: CMAR vs. design-build vs. design-bid-build vs. IPD
The primary difference between the design-bid-build (DBB), design-build (DB), construction manager at risk (CMAR) and integrated project delivery (IPD) project delivery methods lies in the emphasis placed on price, qualification, collaboration and risk assumption. These differences require specific marketing strategies
Design-Bid-Build (DBB):Price is the deciding factor and selection is typically based on lowest bid. Marketing strategies should focus on cost-effective solutions that minimise price while ensuring efficiency and quality.
Design-Build (DB):Best value for money is crucial The contractor's qualifications and ability to collaborate play a major role. Marketers should offer integrated solutions that improve communication and collaboration between project stakeholders and enable seamless integration.
Construction Manager at Risk (CMAR): This method is characterised by the commissioning of a company that is both an advisor and builder in the planning and construction phases The CMAR acts as a partner to the owner, taking a leadership role in risk management while also being responsible for keeping projects on budget and on schedule. Marketing strategies should inspire confidence in the firm's expertise, highlighting the advantages of early involvement and the ability to manage risks accurately.
Integrated Project Delivery (IPD): The IPD model stands out for its collaborative structure, in which all project participants – clients, architects, engineers, contractors and suppliers – are involved together from the outset The focus here is on shared risk, common goals and incentive systems. Marketing strategies should emphasise how your products, services or technologies promote cooperation, minimise risk and can achieve project goals more efficiently.
Vendors can distinguish themselves by presenting innovative solutions that help optimise team communication and maximise project success, such as tools for Building Information Modelling (BIM) or platforms for real-time data management.
Detailed marketing messages
For Design-Bid-Build (DBB): Focus on cost-effective, quick solutions that keep the price low while meeting the requirements. Marketing messages should make it clear how your products or services ensure an optimal balance between price and quality.
For design-build (DB): Highlight integrated solutions that not only optimise price but also improve collaboration and communication within the team. Your marketing messages should emphasise the added value of your solution for the entire project, for example, through time savings, cost efficiency and seamless integration of all parties involved
For construction managers at risk (CMAR): Highlight how your company can ensure project success as a central partner and coordinator. Emphasise your experience in risk management, in creating precise cost estimates and in effectively collaborating with clients, architects and engineers Your marketing messages should show how your company identifies, assesses and minimises risks, creating cost certainty and resolving conflicts as early as the planning phase.
For Integrated Project Delivery (IPD): Highlight how your solutions promote collaboration and transparency, for example, by providing real-time data, supporting incentive systems or facilitating communication between all parties. Marketing messages should emphasise the added value of a holistic approach, such as increasing efficiency, optimising costs and schedules, and improving quality through greater collaboration between teams. Vendors should emphasise how their products or services help to identify risks at an early stage and achieve project goals as a community.
Differentiation strategies for marketing managers in the IPD model (Integrated Project Delivery)
The IPD model requires marketers to be clearly positioned as the focus is on collaboration, innovation and shared success. Vendors can differentiate themselves by the value added to their products, software or services and their ability to facilitate collaboration.
High-value providers:
Marketers representing high-value products, software or services can score points in the IPD model by emphasising innovation, long-term benefits and integration:
Engineering firms:
An engineering firm could highlight the added value of design software that supports team collaboration and data integration. In the IPD model, project planning is strongly influenced by the exchange between different actors. Software that provides more precise calculations and at the same time increases transparency in planning could be crucial. Examples from previous projects in which software has helped to reduce rework or optimise time are convincing.
Construction company:
A construction company could emphasise its strengths in process coordination and quality assurance. The ability to promote collaboration through innovative technologies such as BIM (Building Information Modelling) solutions can be highlighted as a key factor. Storytelling about projects in which significant savings have been achieved through optimised planning and collaborative problem solving is convincing.
Suppliers:
Suppliers of high-quality materials can distinguish themselves by providing products that enable smoother collaboration. Materials that can be easily integrated into the overall plan or that support the sustainability goals of the project are particularly relevant. Certificates and positive reports from IPD projects that testify to the seamless coordination between planning, delivery and use build trust.
Additional services such as workshops to optimise collaboration, advice on sustainable solutions or training in the use of products could make all the difference. Storytelling approaches that demonstrate the success of IPD projects using your solutions will strengthen your brand in the long term.
Cost-conscious providers:
Cost-conscious providers can also score points in the IPD model by emphasising efficiency and flexibility:
Engineering firms:
Engineering firms that focus on cost-effective solutions could offer standardised design approaches or software solutions with low barriers to entry that efficiently support small and medium-sized projects. The focus could be on tools that facilitate data sharing and real-time communication to enable quick and accurate decision-making.
Contractor:
A contractor could distinguish itself through its ability to meet deadlines and budgets. Marketing messages could highlight how optimised processes, lean teams and forward-looking risk management create synergies within the team. Success stories demonstrating on-time delivery and cost certainty in IPD projects would be an important argument.
Supplier:
A supplier of cost-effective materials could focus on flexibility and compliance with standards. Products that can be easily adapted to the team's requirements, as well as quantity discounts or short delivery times, can be key selling points here. Case studies that show how the products have been successfully used in IPD projects build trust.
In addition, providers of cost-efficient solutions could score points through transparency in communication, flexible pricing structures and clear risk management approaches.
Customers should understand how your solutions not only save money, but also support project success in a collaborative environment.
Summary
The Integrated Project Delivery (IPD) model has emerged as an innovative and collaborative alternative to traditional project delivery methods. For marketers in the construction industry, it is crucial to understand the specifics of this model and to align their offerings to address the shared goals and needs of all project stakeholders.
In contrast to the traditional design-bid-build method, in which the lowest price is often the main selection criterion, the IPD model aims for close cooperation and shared responsibility. By involving all stakeholders at an early stage – from clients, architects and engineers to suppliers – risks are better distributed and identified at an early stage. Incentive systems such as profit pools ensure that all parties are equally motivated to control costs, increase efficiency and ensure quality.
Higher-priced providers more likely to succeed in the IPD model
In the IPD model, providers of high-quality products or services benefit from the greater emphasis on collaboration, innovation and added value. Owners and project teams prefer to select partners with proven experience, technical expertise and the ability to add value.
Studies of comparable projects show that the probability of success for higher-priced providers in the IPD model is around 40–60%, since criteria such as quality, process optimisation and sustainability are crucial.
By comparison, the chances of success in price-focused models such as design-bid-build often fall to 10-20%. These figures make it clear that the IPD model focuses on long-term benefits and the ability to solve problems together, which is particularly advantageous for providers with innovative and high-quality solutions.
Sources:
American Institute of Architects (AIA): IPD Case Studies Report, 2021
Dodge Data & Analytics: Collaborative Project Delivery Models in North America, 2020
McKinsey & Company: The Next Normal in Construction, 2020
Questions that will take your marketing expertise in the construction industry to the next level!
Question 1
An engineering firm would like to participate in an IPD project. Which of the following measures is crucial for successfully incorporating one's own services into the integrated planning process?
A. Development of solutions that focus solely on reducing costs in the execution phase
B. Presentation of project references that demonstrate the ability to promote innovation and interdisciplinary cooperation
C. Focusing on minimising their own liability risks, regardless of the project objectives
D. Highlighting internal efficiency processes without placing them in the context of teamwork
Correct answer:
B. Presenting project references that demonstrate the ability to promote innovation and interdisciplinary cooperation
Explanation:
Interdisciplinary collaboration and innovation are crucial in the IPD model. The ability to respond flexibly to team dynamics and to contribute to achieving objectives with creative solutions is a key factor that improves the prospects of project success. A pure focus on costs (as in A) or isolation (as in D) is detrimental in the IPD context.
Question 2
Why could a construction company participating in an IPD project fail with a strategy that focuses on strictly enforcing its own priorities?
A. Because the IPD model provides a smaller budget
B. Because IPD assumes a hierarchy between construction companies and architects
C. Because the IPD model is based on shared objectives, shared responsibility and incentive systems that prevent isolated positioning
D. Because construction companies have less responsibility in the IPD model than in the design-bid-build model
Correct answer:
C. Because the IPD model is based on shared objectives, shared responsibility and incentive systems that prevent isolated positioning
Explanation:
In the IPD model, the ability to share responsibility and respond flexibly to project requirements is what counts. A strategy that only pursues one's own priorities undermines the collaborative nature of the model and harms overall success.
Question 3
Which of the following marketing approaches should a supplier in an IPD project avoid at all costs in order not to jeopardise its success?
A. Emphasising the innovative strength and integration of materials in the overall planning
B. Offering materials that enable short-term savings but cause higher maintenance costs in the long term
C. Promoting cooperation through flexible delivery times and individual adjustments
D. Referring to projects in which the team was able to achieve cost savings through the supplier products
Correct answer:
B. Offering materials that provide short-term savings but result in higher maintenance costs in the long term
Explanation:
The IPD model aims for long-term efficiency and sustainability. Materials that only offer short-term advantages contradict this approach and can damage the trust of the project partners. Contractors should offer products that add value both in the construction process and in the long term.
Case study: Marketing approach contractors should avoid
A construction company wants to apply as a partner for an IPD project and highlights the following in its marketing campaign:
‘Our experience lies in staying on budget by strictly controlling and minimising communication efforts with other parties.’
‘We guarantee isolated processing of our tasks to ensure maximum efficiency in our processes.’
‘Our focus is on minimising price without regard to additional project objectives such as sustainability or innovation.’
Why is this approach wrong?
Isolation instead of collaboration: The IPD model relies on close cooperation and shared responsibility. A strategy that deliberately minimises contact with other stakeholders is counterproductive and damages team dynamics.
Short-term focus: While price reduction is a crucial factor in models such as Design-Bid-Build, IPD aims at long-term values such as sustainability, quality and efficiency.
Lack of innovation approach: Ignoring innovation and joint problem solving contradicts the philosophy of the IPD model, in which creative solutions are actively encouraged.
Question 4
What are the main problems with the construction company's marketing approach as described above in relation to the IPD model?
A. It does not take into account specific requirements of the German Public Procurement Act (VgV)
B. It contradicts the basic principles of the IPD model, such as collaboration, promoting innovation and sustainability
C. It is too focused on integration with other partners
D. It fails to make a clear distinction between planning and building
Correct answer:
B. It contradicts the basic principles of the IPD model, such as collaboration, promoting innovation and sustainability
Explanation:
The approach emphasises isolation and short-term cost savings and ignores the collaborative and long-term orientation of the IPD model. Sustainability and innovation are neglected, making the company unattractive to potential partners.
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