4 Ways AEC Businesses Are Putting Themselves at Risk

Posted by Deltek on January 25, 2017

Pitfalls AEC businesses need to avoid

As a business operating in the construction industry, you will have noticed that the landscape is becoming more competitive, and in some ways harder to navigate. If you want to continue to be successful, there are some pitfalls that you need to avoid.

The truth is that many AEC organisations are unduly putting themselves at risk in a number of ways. So, as a leading provider of solutions to over 12,000 AEC businesses worldwide, the team at Deltek have identified the 4 key risks that organisations within the industry are currently facing.


1. Not having project management systems and processes in place

The ability to manage and deliver profitable projects is crucial to the survival of organisations in the construction industry. With order books growing and the pressure to design and deliver more innovative schemes using the latest techniques and solutions, it’s no wonder that project managers are feeling the pressure.

Mitigating this risk means ensuring that the right project management processes and controls are in place and that your staff have the necessary skills to run projects on time, to budget and in line with industry requirements such as Building Information Modelling (BIM). Project managers need to manage and control a wide range of project information and ensure that it’s easily available to those who need it. Efficient filing and management of email chains and multiple versions of drawings and project documentation, as well as time, resource, and budget management skills are vital when it comes to project success.

Providing support, coaching and training and also working to retain key staff is essential. As is maintaining a focus on knowledge retention, sharing and succession planning.

“We don’t always follow established project management processes and controls. We can attribute 100 percent of our failed projects to this syndrome.” Engineering and construction company executive in KPMG’s Global Construction Survey 2016


2. Skills shortages and not working to attract the best talent

It has been widely publicised that the construction industry is suffering from a skills shortage. This stems from a combination of experienced professionals leaving to enjoy retirement and not enough focus on promoting the industry as a rewarding career choice. There is now also the potential issue of immigration controls as a result of recent economic changes in the US and Europe.

All of this is compounded by the fact that organisations throughout the construction supply chain are dealing with growing order books. Research that Deltek carried out in 2016 showed us that 73% of businesses surveyed reported a growing order book, with an additional 23% indicating a consistent level of orders. This is supported by figures from both RICS and The Royal Institute of British Architects (RIBA).

The solution to this is twofold:

1. Put a strategy in place to ensure that your organisation attracts the best talent. What can you offer them in the way of progression, varied experience, and access to the right tools to carry out their role?

2. Work with others, from key associations, right down to educational establishments at grass roots level, to raise the profile of the construction industry. Even with a number of economic changes occurring across the world, such as the decision to leave the European Union by the UK, and recovery from recession, there are still exciting and lucrative career opportunities available.


3. Failing to embrace and implement the right technology

In KPMG’s Construction Survey for 2016 it was noted that the construction industry is a laggard when it comes to implementing the latest technology.

“Only 8% of surveyed companies could rank as ‘cutting edge technology visionaries’; 64% of contractors and 73% of project owners ranked as ‘industry followers’ or ‘behind the curve’ when it came to technology” KPMG Global Construction Survey 2016

As a project based business in an increasingly innovative industry it’s vital that you have the right technology in place, in the office and on site. Not having systems and associated processes in place, particularly when it comes to delivering profitable profits, can lead to a number of issues and unnecessarily put your business at risk.

Some of the core issues we have identified include:

• Creation of information silos – if you don’t offer your staff, and outside organisations involved in your projects, access to the technology that they need to do their jobs effectively, they will buy or download their own. This could be seen as proactive, but it could also cause you a headache further down the road when you are trying to find or consolidate information and present an accurate picture of how a project is progressing. It also means that if an employee or contractor leaves, they will most likely take the knowledge of their silo of information with them.

• Loss of profits and efficiencies – if you are not offering access to core technologies, such as project management, information management, and the apps needed for seamless mobile working, your team won’t be as efficient. This lack of efficiency could very quickly start to eat away at your bottom line.

• Business critical information being incorrect or compromised – Without the right processes and information management systems in place crucial information could be lost or compromised. You could find it more difficult, or even impossible, to respond to a liability claim. Hand on heart, how easy is it currently for you to locate that one email in a chain or that specific version of a drawing that categorically proves that you are not liable?

“As a result of poor data management and usage, 29 percent of businesses suffer from inefficient decision-making and inability to reach new customer segments, while 38 percent suffer from wasted time. These avoidable issues cost time, money and resources that may not be available.” CompTIA’s 2015 report, Big Data Insights


4. Not understanding what their data is telling them about their business and projects

What some AEC organisations fail to realise is that as well as delivering the tangible aspects of a project, they are also in the business of delivering information, whether it’s to clients, board members, or shareholders. However, with the amount of information we create doubling every 72 hours, it can be a struggle to keep up.

This can lead to information overload, as well as confusion about what data to trust and what that data is really telling you about the performance of your business, projects and team. Overwhelm, inaccurate information and lack of understanding about how to interrogate and interpret data can lead to key decisions being made based on an out of date or incorrect picture.

The key here is to adopt the maxim of “garbage in equals garbage out”. The data that you create and log cannot provide you with the right information if it’s inaccurate to begin with. Accurate information is crucial for identifying potential problems early on and keeping abreast of project performance and profitability. Everyone within your business needs to understand the implications of working from incomplete or inaccurate information.

It also helps to build an understanding of the benchmarks and reporting requirements of both your business and your clients and the interrogation skills needed to produce an accurate picture of what’s going on. This can then be used by the relevant people to make the right decisions based on the correct information.


Want to know more about protecting your business from risk?

If you want to understand more about how your business could be at risk and how you can reduce those risks in 2017 and beyond, register for our on-demand webinar ‘Data Overload: Why it’s one of the biggest risks to AEC organisations’.