Tracking KPIs Through Tough Times
After a challenging year, how are architecture practices in Asia Pacific (APAC) performing? Download the latest Deltek Clarity report to find out more.
In the last 12 months, architecture and engineering firms have worked around some of the most turbulent business conditions in recent memory. The pandemic impacted different parts of the world in different ways, but there’s no doubt that nearly every firm in APAC felt the aftershock of lockdowns, social distancing and long-term disruption.
But was every firm impacted in the same way? Wouldn’t it be great to understand what impact the pandemic had on your peers and what they are doing to find new opportunities in its aftermath?
Now you can. The latest Deltek Clarity – Architecture and Engineering Industry Study surveyed more than 600 decision-makers across EMEA and APAC to understand how firms have operated in the last 12 months, how they’ve performed, and what strategic plans they have in place for the coming months.
It’s no surprise that growth and profit are front of mind for APAC firms. The Deltek Clarity survey found that increasing profitability and managing growth are by far the biggest challenges facing APAC finance leaders (43% and 40% consider them in the top three challenges, respectively). Cashflow and an unpredictable spending environment come next (33% for both).
However, firms in the A&E industry don’t all feel the same challenges – or experience them in the same way. For example, more architecture practice leaders report facing unpredictable spending environments than engineering firms (44% vs. 28%). But on the other hand, fewer architecture respondents say they face challenges around managing growth (30% vs. 46% of engineering firms).
To overcome these obstacles, firms are looking to finance leaders to better control costs to improve the bottom line. The most commonly reported strategies to improve business profitability were ensuring clients pay without needing to be chased (41% listed this as their business’s top priority), limiting project cost overruns (38%), and reducing expenses (38%).
KPIs: Firms find success despite limited KPI tracking
Despite being aware of the financial challenges facing their firms, many leaders in APAC report limited tracking of key business metrics. Approximately two-thirds of firms report tracking project management specific KPIs.
Across the APAC region, the most commonly monitored KPI is profitability (73% report tracking this metric), while the least commonly tracked is multipliers (47%). But there is a difference in the KPIs organisations are monitoring, depending on whether they’re primarily architecture practices or engineering firms:
- Cost variance is tracked by 54% of architecture practices but 67% of engineering firms.
- Estimate to complete is measured by 42% of architecture practices vs. 70% of engineering firms.
- On-time delivery is also less frequently tracked by our architecture respondents (58%) compared to engineering (68%).
Despite uneven KPI monitoring across the region, 54% of firms report high or very high confidence in their ability to report on budget, while 51% say the same about schedule.
Benchmarking data: uncertainty impacts project delivery
While much of the survey leaves cause for optimism, responses to some questions made it clear that the pandemic has impacted project delivery and timescales. Just 33% of APAC respondents report that half or more projects are on or under budget. And only 27% have half or more projects ahead of schedule.
These numbers show a significant decline from last year. In the 2020 Deltek Clarity Survey, 86% in APAC reported half or more projects as on or under budget, and 85% said half or more projects were on or ahead of schedule.
This decline is no surprise considering that global respondents this year told us that four out of five projects experienced COVID-related changes, with 27% reporting delayed projects and 22% saying projects have been cancelled.
Get more details on your peers’ performance this year
This article offers a brief glimpse of how the pandemic has impacted the A&E industry in APAC, and what firms like yours are doing to turn disruption into opportunity.
But the full Deltek Clarity report offers much more detail on the metrics firms are tracking and what numbers they’re seeing. Download the full report to explore more KPI data, see industry benchmarks, and dive into the strategies other leaders are using to overcome their technology and business challenges.
Download the full Deltek Clarity A&E Industry EMEA and APAC Study.