Deltek Clarity Research - Taking the temperature of the Nordic architecture and engineering industries

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Did you know that cost of technology is the standout barrier to tech adoption for Nordic architecture and engineering (A&E) firms? We recently discussed this, and other findings from the new Deltek Clarity industry survey, in a webinar with Henrik Garver from the Danish association ‘Foreningen af Rådgivende Ingeniører’ (FRI) and Magnus Höij from the Swedish industry association ’Innovationsföretagen’.

How did the Nordic A&E industry tackle the Pandemic?

The Deltek Clarity study found that most Nordic firms have done a good job in addressing the operational challenges created by Covid-19. Over 60% of businesses say they were somewhat or very successful at coordinating clients, invoicing clients electronically and delivering projects remotely.

This view is shared by Henrik Garver at FRI. “Everything slowed down entirely for a couple of months in Denmark at the start of the pandemic, and slowly over the summer of 2020 it started to pick up again. The bounce back began in the public sector and the private sector followed in 2021, with the exception of particular industries.”

Magnus agreed, he explained that “a challenge that many firms have encountered is to have the internal life of the company work efficiently, including leadership and teamwork. Working remotely has been fine over the short term, but over time it’s been somewhat challenging not to be able to meet face-to-face.” 

What’s the next stop on the digital journey of A&E firms?

Data-driven technologies stand out as critical in the Nordics, and much value is put on data science. However, compared to other markets, Nordic firms consider some technologies to be less valuable to the business than respondents in other parts of the world, e.g. artificial intelligence (61% vs 69% globally), machine learning (66% vs 72% globally) and internet of things (63% vs 70% globally).

Where technology is heading is a hot topic and a subject for discussion by local industry associations. Technology trends are also driven by the A&E firm’s clients, and what kind of services they would like to see accelerated.

Interestingly, 32% of Nordic firms described themselves as Nascent on the digital transformation maturity spectrum, compared with 25% globally. And only 3% of respondents describe their firms as being advanced.  According to Henrik, this could be a sign of humble self-awareness, as firms do appreciate and are aware of the complex yet essential nature of the digital transformation journey.

Environmental and sustainability consciousness

A finding that was further supported by Magnus and Henrik as a challenge for Nordic A&E firms, is poorly defined project scope. In Denmark there has even been a change in the contract execution, where clients are now further responsible for being detailed about the scope. If it’s not clear from the client and the contract, it’s very difficult for project managers to deliver the project.

Further, heightened environmental and sustainability consciousness is ranked as one of the greatest challenges for Nordic project management in the next 5 years. This is indeed a hot topic in the region and the Nordics is on the forefront here. It’s not as much of a priority in other regions yet. According to Magnus this could be an opportunity to differentiate the Nordic market. The world is waking up to the need for keeping sustainability and the environment high up on the agenda.

This is something the associations find on every firm’s agenda, and something every business needs to take into account. Today, it’s even difficult to attract new talent to work for a company that is not working with sustainability in one way or another.

Carry on evolving

Nordic firms, 44%, see increased competition, and the cost of competing for projects and identifying new prospects, 37% and 35% respectively, as top business development challenges. Improving analytics on business development is a top initiative, with getting buy-in for business development as a close second.

Firms are trying hard to differentiate themselves, and more local business ventures is a way for firms to do this. Many of the leading A&E businesses now have headquarters all around the world, increasing competition in the region. This crowded market can be a strong sign of a healthy market, and globalisation continues to presents new players and competitors. It’s not just traditional firms competing on local turf anymore.

The Nordic A&E industry is an area where much is happening, and the associations believe we will continue to see change over the next few years: sustainability, tech trends, competition, securing and retaining talent are changing – and the clients are of course crucial throughout! With this changing landscape, improving analytics and getting a better picture of business performance, now and over the longer term is essential.

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