Trends & Challenges in Practice
Architecture and engineering firms across the Asia Pacific describe the business challenges they are currently facing and how they are planning to overcome them.
The architecture industry has changed rapidly over the past few years. Practices locally and globally are navigating a number of challenges, from succeeding in a more competitive marketplace, to handling staff shortages and keeping up with digital transformation and technology.
Deltek explored how architecture and engineering (A&E) firms across the globe are managing these challenges in the 3rd Annual Deltek Clarity A&E Industry Study. They surveyed over 600 firms from around the globe, 200 of which were from the Asia Pacific region. The study focuses on key benchmarks, challenges and initiatives for A&E firms and this article will explore the key local findings.
Firms in the Asia Pacific region are embracing digital transformation
Companies in the Asia Pacific are ahead of the game when it comes to digital transformation. Firms reporting that their digital transformation maturity will be ‘advanced’ in five years (31%) was the highest of any region. And while 16% of respondents in Europe describe their digital transformation maturity as only ‘nascent’ or ‘exploratory’, this was halved for Asia Pacific firms – at just 8%.
With firms in the Asia Pacific focusing on digital transformation, emerging technologies are seen as vitally important. In fact, firms identified more emerging technologies as important to their business overall than any other region, data science (91%), big data (86%) and artificial intelligence (86% of respondents).
Implementing a digital transformation strategy comes with its own challenges for the IT operations team. Respondents in the Asia Pacific highlight implementing new software systems (31%), improving cybersecurity (34%), migrating to the cloud (31%) and finding top IT talent (31%) as the top challenges in this area.
But firms have several initiatives in place to tackle these challenges:
- 52% will create new security policies and procedures
- 48% will build new IT infrastructure
- 47% will consolidate the number of vendors or systems they use
Key challenges can be solved with better project management
Although keeping up with the evolution of technology will be critical for firms in the next five years, it’s not the only challenge. While 35% of respondents in the Asia Pacific indicated increasing complexity of projects was a key challenge, this is compounded by heightened environmental and sustainability consciousness (29%) and keeping pace with changing client expectations (27%). This makes the role of project managers more important and more challenging than ever before.
Many Asia Pacific firms agree that better management and processes could help to resolve these challenges.
Over the next three years firms plan to address project management challenges in the following ways:
- 33% plan to more clearly define project management, business development and design responsibilities
- 32% plan to invest in better project management software tools
- 31% plan to improve how they manage their project information and data
As firms look to address these challenges, it’s critical that the project managers are given the time and resources to effectively deliver projects. According to the 3rd Annual Deltek Clarity A&E Industry Study, only 55% of projects were reported as being on or under budget and only 44% of projects are being reported as on or ahead of schedule. Better technology, better processes and better information management can help firms address these project delivery challenges.
Attracting, training and retaining top talent is crucial
The discussion about attracting and retaining talent as a priority for businesses is happening across many industries. More people than ever are changing jobs in search of greater professional fulfilment.
The architecture profession is no exception, with many practices highlighting the hiring and retention of talent as a major challenge across the business. Around 45% of firms in the Asia Pacific name increased competition for talent as a leading challenge for project management in the next five years. IT operations also face the same challenge in finding talent (31%), and 30% of finance leaders listed finding and retaining qualified staff as a top challenge too.
This means that Asia Pacific A&E firms may need to rethink their talent strategies. They also need to be aware of the need for technical skills and knowledge in the industry as technology continues to evolve. Some 40% of firms say that a lack of employee education will delay technology adoption over the next three years.
Despite this, the region is leading the way in some areas of Human Capital Management (HCM). As high as 85% of Asia Pacific firms have a significantly larger number of initiatives to support employee wellbeing than they did two years ago. This is well above firms in other regions, with 64% for the Nordics and 72% for other European firms.
Business development is becoming challenging in a crowded marketplace
Competition in the A&E market is more intense than ever, and this means that firms are having to navigate an increasingly crowded marketplace. Respondents identified the increased cost of competing for projects as their top business development challenge (39%), followed by increased competition (36%).
If firms want to differentiate themselves, one of the areas that they need to focus on in technology. In fact, 64% of A&E firms in the region have lost potential business to competitors with more advanced technologies. This was higher than in other regions, making technology a key element for business development.
The top three priorities for overcoming these challenges in the next three years include:
- Improving the quality and availability of marketing data and materials (33%)
- Hiring additional staff (26%)
- Geographical expansion (26%)
Cost and efficiency are a key focus for Asia Pacific A&E firms
The 3rd Annual Deltek Clarity Study identified that firms in the Asia Pacific are more likely to focus on cost and efficiency than the global average, with 34% clamping down on project overrun (versus 31% overall) and 33% wanting to reduce expenses (versus 29% overall).
The top initiatives to address these financial challenges in the next three years include:
- Business process improvement (33%)
- Organisational change or realignment (32%)
- Training project managers on financial management (30%)
- Improving risk management plans and systems (30%)
But there’s more: Financial benchmarks, KPIs and the key to winning new business
We’ve explored some of the core trends and challenges identified by A&E firms across technology, project management, human capital management, business development and financial management. But there’s more in the full report.
Download your copy of the 3rd Annual Deltek Clarity Architecture and Engineering Study to explore:
- Financial benchmarks for A&E firms
- The KPIs that Asia Pacific firms are most likely to be tracking
- More detail on which measures firms in the region think are key to unlocking new business
This article was originally published on Deltek.com on 31 May 2022.