Architecture, engineering, and consulting firms are facing a world of financial pressures, political uncertainty, and talent shortages – and they’re having to adapt quickly to mitigate them. To explore the challenges these firms are facing and the KPIs they’re using to track success, we surveyed senior decision-makers from across Europe and Asia Pacific (APAC).
This blog dives into some of the key trends identified by over 70 Nordic senior decision makers working in architecture, engineering, or consulting organizations. The full results can be found in the 4th Annual Deltek Clarity EMEA and APAC Industry Study.
Financial Concerns Are Widespread – But Nordic Organizations Are Optimistic
Many architecture, engineering, and consulting organizations across Europe, and Australia and New Zealand (NZ) have financial concerns around potential recessions and rising interest rates.
But Nordic firms are almost half as likely to be ‘extremely concerned’ about increases in supply chain or material costs (16% vs. 31% in the UK and Australia/NZ), a rise in interest rates (12% vs. 23% in the UK and 25% in Australia/NZ), or recession (16% vs. 31% in the UK).
That doesn’t mean Nordic organizations are without worries of their own. Instead, they’re most likely to be concerned about inflation (63%), cyber-security risks and breaches (61%), and new industry regulations coming into place (60%).
To tackle these, many firms are focusing on growth strategies and adopting emerging technologies.
Key Issues Firms are Concerned About: 4th Annual EMEA and APAC Deltek Clarity Report
IT Infrastructure Investment is the Single Biggest Growth Opportunity
Growth is high on the agenda for Nordic firms this year. 71% of organizations surveyed plan to carry out more projects this year, and four out of five (79%) expect their profits to increase.
To ensure this stable growth, almost half of Nordic organizations surveyed (49%) have a clear and agreed strategy. And for many, it includes investing in new technologies.
Like all other regions, investing more in IT infrastructure is perceived as the single biggest growth opportunity (24%). And 73% of Nordic firms plan to invest more in emerging tech in 2023, including over a third (37%) who say they’ll invest ‘significantly more’.
But despite 91% of firms feeling they’re well-prepared to implement their top priorities for digital transformation, there are still challenges to overcome.
26% of firms see investing in their IT infrastructure as their biggest growth opportunity: 4th Annual EMEA and APAC Deltek Clarity Report
Lack of Education is One of the Biggest Digital Transformation Challenges
Common barriers to digital transformation often include insufficient resources, employee pushback, and the cost of adoption. But, according to the survey results, Nordic organizations are specifically struggling with a lack of education. Their top three challenges are:
- 48% – Lack of client education
- 47% – Prioritizing the most applicable technologies
- 45% – Lack of employee education
Lack of education is a particularly significant challenge because Nordic organizations perceive emerging technologies as crucial to their business. At least two out of five feel robotic process automation or RPA (44%), natural language processing or NLP (41%), or data science (40%) are very important to their organization’s success.
Given the importance of these technologies, it’s likely many organizations in the Nordics will be focusing their efforts on reducing knowledge gaps for clients and employees alike – or recruiting new staff with the right skills.
Nordic Firms Have Plans to Grow Their Teams – Despite Talent Shortages
Firm leaders across architecture, engineering, and consulting are reporting challenges related to talent shortages. For example, half of organizations in the Nordics (51%) said they had to turn down profitable projects in 2022 because they didn't have enough resources available.
And talent gaps are impacting more than just project capacity. According to the survey results, almost half of Nordic organizations (45%) admitted that difficulty in attracting and retaining talent is detrimentally affecting their firm, significantly more likely than in the UK (32%).
Despite the impacts of industry-wide talent shortages, Nordic organizations are confident in their ability to recruit in 2023. For example, they’re less likely than the UK, and Australia and New Zealand to be extremely concerned about being unable to recruit or retain effective employees (13% vs. 28% in the UK, and 24% across Australia/NZ).
So, it comes as no surprise that 71% of Nordic organizations say they’re planning to increase their workforce and capacity this year, including a quarter who say they’ll grow teams by more than 10%.
Firms Are Tracking KPIs But There Is Room for Improvement
In the 2023 Deltek Clarity A&E Industry Study, we once again asked senior decision-makers what KPIs they’re tracking, so organizations can benchmark themselves against their peers.
Unsurprisingly, at least seven-in-ten organizations in the Nordics track client profitability (76%), net revenue (73%), or revenue factor (72%). But only 55% are tracking utilization rates.
Most organizations feel there’s room for improvement when tracking KPIs, particularly when measuring average collection period and days sales outstanding (DSO). Four in five (79%) of those who track this KPI feel it’s poorly tracked and could be improved.
And for the 79% of organizations who still rely on manual data entry for their projects' financial data, plans to invest in technology are likely to help automate data entry and track KPIs faster and more accurately.
Firms believe that they could improve how well they track KPIs: 4th Annual EMEA and APAC Deltek Clarity Report
How Do You Benchmark Against Your Competitors?
The Deltek Clarity Study found that architecture, engineering, and consulting organizations in the Nordics are generally optimistic in spite of widespread financial concerns, and are confident in recruiting the right talent to help broaden their technology expertise.
But there’s still a lot more to explore. Read the full study to learn more about the most pressing financial and technology trends for firm leaders.
Professional Services Industry Trends & Benchmarks
The 4th Annual Deltek EMEA and APAC Clarity Study is Now Available
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