KPIs and Benchmarking: 8 Ways A&E Leaders Can Put Them to Use

November 15, 2022
architecture and engineering benchmarking

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How can forward-thinking A&E firms do more with their KPIs and start making even better-informed decisions? Explore eight best practices for taking a strategic approach to benchmarking.

And yet, the 3rd Annual EMEA and APAC Deltek Clarity Study suggests that firms are leaving some critical key performance indicators (KPIs) off the table. For example, while 77% of European and Asia Pacific firms track Net Revenue and 73% track operating profit, only 58% are assessing backlog rates.

So, how can forward-thinking firms do more with their KPIs and start making even better-informed decisions? Explore eight best practices for taking a strategic approach to benchmarking.

Why are KPIs So important?

KPIs help team managers and firm leaders understand the performance of their people, projects and business.

With the right KPIs in hand, firms can better understand what’s going on in their business, how to improve key processes, and what success looks like. KPIs also help a firm assess what is going well and what may need to be adjusted in a timely manner compared to established targets or past performance to keep the business on track before it’s too late.

How Can You Do More With Your KPIs?

By evaluating the metrics you track and ensuring you are monitoring the right KPIs for your business, you can build more diverse data sets that help drive your firm forward. How do you get started? We recommend these eight best practices for A&E benchmarking:

1. Ensure Benchmarks are Holistic and Balanced

If the metrics you measure skew to one part of the business, you risk your data — and your view of your firm — becoming biased. Instead, aim for a balanced set of benchmarks across all areas of the business, not just traditional financial KPIs. It is also important to determine if the targets for your business are feasible and in line with industry benchmarks. It isn’t realistic to expect 95% utilization from all employees, but what is realistic and what is the industry benchmark for companies like yours?

When selecting the benchmarks to evaluate and the KPIs to monitor for your firm, a balanced approach is critical. Aggressive financial targets and significant investment in employee training or other employee benefits could make it challenging for both teams to reach their goals, so it’s critical to set targets holistically to ensure all teams are set up for success.

To compare your KPIs to industry benchmarks, check out the 3rd Annual EMEA and APAC Deltek Clarity Study.

2. Tie KPIs to Business Goals and Strategy

There are hundreds of options when it comes to which KPIs to track. By tying your KPIs to your most pressing business goals, you can easily identify which KPIs you need to track to monitor progress toward your goal. You’ll also know if you’ve successfully met your targets and be more clearly focused on meeting your strategic goals.

Likewise, any strategic plans you put in place in the future should also align with your KPIs to help drive the business forward. This requires senior leaders to be committed to using KPIs and external benchmarks as a part of their operational planning and strategy.

3. Support Benchmarking with Accurate External Data Sources

Any KPI you can measure will deliver more value when compared to an external data source. For example, by benchmarking your firm’s performance against the 3rd Annual EMEA and APAC Deltek Clarity Study you’ll have a frame of reference to set the best targets and measure your own success. Just take care to select external data that’s consistent and trustworthy.

Looking at the EMEA and APAC Deltek Clarity A&E Industry Study, you can see how your own metrics compare to industry benchmarks, and the average results of ‘high performing’ firms. For instance, a utilization rate above 60% could put you above the industry average, but when setting a target, be sure to balance setting an aggressive goal like 75% utilization with the potential downstream impacts like burnout and employee turnover. Meanwhile, if your win rate dips too far below industry average, that could be a sign that it’s time to take a closer look at your business development and pursuit processes to inform future pursuit decisions.

4. Get the Right People Involved

Any benchmarking process needs to include a wide array of people. In particular, you’ll want to get the people closest to the metrics you’re measuring involved to ensure you’re measuring the right figures, in the right way and can understand the processes that may need to be adjusted.

Once you have a core team in place, you also need to devise a way to clearly communicate KPIs and goals across the business and drive company-wide alignment.

5. Get a Full Understanding of the Numbers

Simplicity should be your guiding star when identifying the right KPIs. Whether it’s the numbers themselves, the way they’re measured, or what a meaningful rate of change looks like, everyone involved should have a full understanding of your process for measuring and monitoring your KPIs.

6. Understand What Change Looks Like

The underlying purpose of monitoring KPIs is not to measure static results, but to understand change over time. To do that, you’ll need a clear understanding of what meaningful change looks like — and what activities cause it. If your people don’t know how to move the needle, it’s likely they won’t be able to do so effectively.

If your current metrics fall short of the industry average, then getting your numbers up to the industry median is a great place to start. But, it may not be realistic to go from where you are today to the industry average. You may need more incremental targets with the goal of reaching the industry average or high performer average.

7. Don’t Just Look at the Numbers, Look at What They Tell You

Every KPI should directly tell you something about your firm, projects or performance. If it doesn’t, your KPI may be too complicated, or you may need to change the data supporting your KPIs. That’s why all KPIs should be easily understood, and all expected results should be reasonable. After all, it’s not realistic to expect a 100% utilization rate.

8. Develop and Review Your KPIs Regularly

As your firm evolves over time, so must your metrics and KPIs. To ensure this happens, many firms create standard dashboards or reports to monitor KPIs in real time and establish regular meetings to discuss their performance and find ways to improve them.

The frequency and attendees of this meeting will need to flex depending on your KPIs, and the needs of the business.

How to Make the Most of Your Data

By following these eight best practices, you’ll create a strong foundation for your KPIs and the essential insights they deliver. From there, you’re not far from delivering future-facing reports that can help your firm leaders make the most informed decisions.

To learn more about KPIs, and how you can measure and manage them with the right solutions, take a look at how Deltek ERP solutions help architecture and engineering firms make smarter, faster decisions.

In the next part of this blog series, we’ll investigate how firms can take the data they measure as part of their benchmarking and make the most of it with the right analytics tools and approach.


EMEA and APAC Deltek Clarity A&E Industry Study

Compare Your KPIs to Industry Benchmarks