Deltek Clarity Study: Key Challenges, Emerging Trends, and KPIs For Firms in Australia and New Zealand

To deliver quality architecture, engineering, or consulting services, you need insights into a fast-changing market.

Every year, we ask senior decision makers from professional services firms across Europe and Asia Pacific (APAC) about their concerns, business strategies and KPIs. This year, the results are presented in the 4th Annual Deltek Clarity EMEA and APAC Industry Study.

Read on to discover what 149 business leaders from Australia and New Zealand had to say about key challenges and emerging trends.

Addressing Financial Pressures, Growth and Client Expectations

Across the board, architecture, engineering, and consulting firms in Australia and New Zealand are worried about financial pressures. For starters, 66% of decision makers say they’re concerned about a rise in interest rates and the same percentage identified inflation as one of their top areas of concern for their business.

But each industry also has more specific concerns. Consulting firms are more likely than architecture and engineering (A&E) companies to be concerned about new industry regulations (68% vs. 49%), or the ongoing effects of the COVID pandemic (67% vs. 47%).

And there’s even a discrepancy between architecture and engineering firms. Three in 10 engineering firms reported they’re concerned about being unable to cope with sustainable growth, compared to architecture or consulting firms (13% and 10%, respectively).

Despite differences across industries, business growth and development remain major themes for 2023, especially as companies are keen to develop their offerings and meet increasingly demanding client expectations.

Growth Strategies and Future Investment Focused on Technology

To mitigate financial pressures and manage client expectations, 47% of study respondents from Australia and New Zealand have a clear and agreed strategy in place to ensure stable growth.

And for most, growth includes technology investment. Almost half of organizations (45%) have an agreed strategy for data analytics and business intelligence, with 28% perceiving IT infrastructure investment as their biggest growth opportunity.

Many professional services firms also want to invest in emerging technologies (87%). Interestingly, firms across the region rank higher for this than companies in the UK (76%), the Nordics (73%), and Belgium, the Netherlands and Luxembourg (72%).

While technology investments can present challenges – especially if attempting to upgrade infrastructure – most participants feel well-prepared to implement their top priorities for digital transformation (93%). Though only 38% feel ‘very well prepared.’

Firms that Plan to Increase Investment in Emerging Technologies: 4th Annual Deltek Clarity EMEA and APAC Report

A Drive to Understand Emerging Technologies

Firms from Australia and New Zealand say data science (46%), big data (44%), natural language processing (44%), and artificial intelligence (42%) are very important to the success of their organization.

But the study revealed a gap in knowledge about these emerging technologies among staff and senior decision makers. Survey respondents identify a lack of employee education as the top challenge in adopting emerging technologies.

Almost two-thirds of respondents feel their workforce doesn’t completely understand data science (66%) or big data (65%) – which survey respondents say are the two most important technologies for success. And 70% of participants say they don’t completely understand machine learning or artificial intelligence themselves.

That said, engineering and consulting firms are more likely to have a wider technological understanding than architecture organizations. For example, robotic process automation is more likely to be completely understood in engineering or consulting firms (44% and 35% respectively), than in architecture firms (13%).

 Emerging Technologies and Their Importance to Firms: 4th Annual Deltek Clarity EMEA and APAC Report

Firms Need to Attract and Retain Talent to Increase Project Capacity

Many firms have plans to increase the size of their workforce in 2023 and beyond, and organizations from Australia and New Zealand are no different.

Three in five (58%) report turning down profitable projects in 2022 because they didn't have enough resources available. As a result, three quarters plan to increase the size of their workforce during 2023, which is more than those in the UK (63%) or Germany (59%).

The need for more staff isn’t expected to decrease in the near future with 75% of firms in the region planning to carry out more projects in 2023.

Two in five participants admit that difficulty in attracting and retaining talent (42%), and resignations and employee churn (36%) are detrimentally affecting their firm. This is a major theme across industries, and no doubt a focus for professional services companies this year.

Firms Agree There’s Room to Improve Tracking Business and Project KPIs

Architecture, engineering, and consulting firms use all kinds of KPIs to track their success and progress. So, we asked respondents which business and project KPIs they are tracking and how well they are tracking them.

The results show that firms are tracking a variety of project metrics, including margins (77%), average billing rate (74%), and revenue factor (73%). Interestingly, two of the project KPIs firms are least likely to track relate to project scheduling, despite 30% of participants stating that limiting project cost overruns would significantly increase their profitability.

Around seven in 10 organizations that measure earned value management (71%), revenue factor (70%), margins (70%), or project profitability (69%) feel they’re inadequately tracked. And firms in Australia and New Zealand tracking the project performance metrics of profitability, budget and actual cost, only half have high confidence in their ability to accurately report on these project performance metrics.

Overall A&E firms are more likely than consultancies to feel they track KPIs poorly. This could be because A&E firms are more likely than consulting firms to rely on manual data entry for project financial data (92% vs 77%). However, most organizations (85%) in the region, regardless of industry, still rely on manual data entry for their projects’ financial data.

 Confidence in Reporting of Project Performance Metrics: 4th Annual Deltek Clarity EMEA and APAC Report

Where do you measure up against your competitors?

The 4th Annual Deltek Clarity EMEA and APAC Industry Study dives into the key trends, challenges, and insights from senior decision makers in Australia and New Zealand, and across Europe too. Download the full report to learn more.