Practice pressures and opportunities
How can architects tackle technology, rising costs and the race to secure great talent? Deltek and the ACA hosted a roundtable to find out.
Each year, Deltek surveys A&E firms across Europe and APAC to identify benchmarks, market conditions and industry trends. Prior to the release of their third Deltek Clarity Architecture & Engineering Report, Deltek and the ACA assembled six of Melbourne’s leading practices to find out about the state of the industry first hand. As a leading provider of enterprise software and information solutions to the A&E industry, Deltek prides itself on its depth of understanding of project-based businesses and what architecture practices need to be successful.
Participants included Deltek staff, including Managing Director Andy McKay, and practice attendees including Quinn Xi (Fender Katsalidis), Matthew Quinn (Architectus), Ivan Ross (ASPECT Studios), Lucy Carruthers (ARM Architecture), Laurence Robinson (Brand Architects) and Matt Tence (Silver Thomas Hanley), moderating. The group was joined by the ACA’s CEO Angelina Pillai, Vic/Tas President Paul Viney, and Vic/Tas Executive Officer Katherine Ygosse.
All participants generously shared how they’re facing the issues of our times.
Investing in technology
The Deltek Clarity report found that 85% of firms say that investing in technology to improve operations will help them win more business. Roundtable participants agreed that technology was essential to improving business outcomes and knew through experience that technology solutions gave practices transparency and real-time data on their projects and processes. This allowed them to challenge and change behaviour and foster a culture of continuous improvement.
However, the potential of business technology has yet to be fully realised throughout the industry with many small practices having no systems whatsoever – no way to monitor hours on projects, forecast, or utilise metrics – and larger practices struggling with administration requirements and increasing demands to adopt clients’ software. It was agreed that there is still a need to better embed systems, methodologies and technologies throughout practices of all size.
Frustrations were felt about mandated architectural software requirements and clients asking for a particular software without understanding its benefits or application to their project – and, of course, inherent cost implications. One attendee highlighted the variation between architectural software used across Australian practices and how ‘behind’ that idea was compared with Asia or Europe who have mandated or standardised software. It was agreed that this route could deliver efficiencies and enable real technological innovation, such as robotics, to flourish.
A 100% Revit practice shared that they have a team to drive cross-practice training and invest in early-career employees who can be trained, a bottom-up approach. This firm is finding that with this full-practice investment in technology literacy – rather than the knowledge residing with ‘unicorns’ – they can increasingly analyse the data from their models and use algorithms for design innovation. They also now hire programmers.
One practice shared the wins they were enjoying from embedding finance functions within each studio, rather than as separate whole-practice discrete departments. By integrating finance more closely into the design function they were finding better tracking of project progress and that the whole project management and financial literary of teams was improving.
The Great Resignation
Labour shortages are a real issue for all firms. Practices are paying more to find great talent and working harder to keep them. Our roundtable participants are busy putting themselves in the best positions through innovation and improved processes, so that they remain employers of choice without driving down profits and absorbing more costs.
A shift has emerged for practices becoming more location agnostic. They’re hiring the right people for the job, wherever they’re located, and trying to balance this with employment requirements for winning work such as Local Industry Development Plans (LIDP).
Again, technology is rearing its head as an essential ingredient to attracting and keeping great staff. All roundtable participants are finding that architecture graduates in particular are looking for workplaces with a broad suite of technology software – architectural, business, communications and project management – providing them with opportunities to learn, connect and be creative.
The roundtable participants are leaning into the need to improve and increase training to keep great talent and future-proof their businesses. Many are investing in inhouse training across the board but particularly in areas such as resource planning, communications, negotiation skills, project fundamentals training, variations and timesheets. Although the Deltek Clarity report found just 25% of APAC firms intend to address project management talent shortages with investment in internal or external training, this was not true of the roundtable cohort.
Building on recent gains
The group acknowledged that the industry had been tremendously resilient and adapted well to working from home during the pandemic. Every participant was keen to maintain the efficiency dividends gained during this time by not returning to face-to-face client and consultant meetings as the norm. Building on the technology that has enabled that shift is essential.
The increasing costs of competition
The Deltek Clarity report found that APAC firms name the increased cost of competing for projects as one of their top business development challenges (39%), followed by increased competition (36%).
Attendees seconded these findings, lamenting the cost burden on the industry through ever-increasing tender requirements. Frustrations were also aired about the difficulty of complying with project team diversity requirements, despite the best of intentions. Local Industry Development Plan (LIDP) sections of tenders feel like a one-size-fits-all approach that doesn’t acknowledge changing employment conditions and staffing challenges.
Opinion was divided on whether Australia is heading for recession. The group were quietly confident that any required adjustments would be manageable – perhaps a testament to how well they navigated the pandemic. Increasing government spending is a given, the group felt, which means much more work to come.
One participant recommended firms can and should prepare for recession anyway as good business practice: “Ask yourself what could be done if revenue fell by 30% and then set everything up for any eventuality”. From the way workforces and borrowings are structured, to diversifying markets, reviewing contracts and avoiding aged debtors – much can be done to minimise impacts on a practice with forward planning. Again, technology can be helpful to build in project life-cycle visibility and increase project and practice intelligence.
A theme running through the discussion was the need for practices to work together to consolidate a consistent advocacy voice for the industry. The ACA’s Angelina Pillai reminded the group of the role of the ACA as an advocate and its work supporting healthy workplaces. Deltek’s Andy McKay thanked the group for their demonstrated commitment to sharing knowledge so that issues at an industry-level can be addressed. Benchmarking with other practices was also acknowledged as an important ingredient in supporting resilience and innovation through the profession.