5th Annual Clarity Industry Study: Trends for Architects, Engineers and Consulting Firms in Australia and New Zealand

April 25, 2024
2024 Trends for Firms in Australia & New Zealand

Gain insights from nearly 200 architecture, engineering and consulting leaders in Australia and New Zealand with our 5th Annual Deltek Clarity Industry Study.

Every year, we aim to provide a clear snapshot of what's happening in the architecture, engineering, and consulting industries worldwide.

We asked senior decision-makers throughout the UK and Australia/New Zealand about their priorities for the year ahead, the challenges they're facing right now, and how they plan to solve them.

In our 5th Annual Deltek Clarity Industry Study, we've uncovered how firms have progressed since 2023 and what they're doing to overcome market disruption from new technologies, economic risks, and potential cyber threats.

In the meantime, read on to discover highlights of the insights from 191 business leaders across Australia and New Zealand – and their key challenges and priorities for 2024.

Looking Ahead to a Year of Tech Investments and Profit Increases

This year looks to be promising for architecture, engineering and consulting firms in Australia and New Zealand.

Many have identified technology innovation (including tools such as AI, virtual reality and augmented reality) as their single biggest growth opportunity for the year ahead. As a result, investment in new technologies is the key priority for a third of respondents, followed closely by expansion into new markets (31%).

With a year potentially filled with technology investments, the majority (88%) of firms also predict profit increases in 2024 – a rise from the three-quarters (77%) that expected profit increases in 2023. This year's figure even includes a quarter (27%) that expects their profits to rise by at least 10%.

While these profit predictions are ambitious, many firms can already identify what will drive these increases. Over a quarter of firms (28%) think that ensuring people register hours on time will lead to a significant increase in their company's profitability, while 27% think that it'll be down to balancing their employee/cost ratio and reducing their expenses.

ANZ Profit IncreasesThe majority of firms in Australia and New Zealand are predicting profit increases in 2024

Cybersecurity Risks are Front of Mind for Many Leaders

These major tech investments and profit predictions suggest a positive year ahead for the industry, but it's crucial not to overlook some of the key challenges on the horizon.

Over the past 18 months, three in ten firms in Australia and New Zealand experienced a cybersecurity threat or attack – and now, it's one of the main perceived risks for 2024. More than three-quarters (80%) are concerned about cybersecurity risks and breaches, while others are conscious of global and local recessions (79%), inflation (77%) and rising bank interest rates (76%).

As firms continue to invest in digital transformation, it's important they keep these challenges in mind throughout the year. Fortunately, the report revealed that many firms are already investing to protect themselves against these risks.

A significant number of firms (50%) said cybersecurity investments are very important to their success in 2024, with 43% saying the same about email management, 42% prioritizing document management, and 40% investing in disaster recovery and business continuity planning. All these investments to protect operations suggest a proactive approach to the key challenges in the industry today.

ANZ Cybersecurity InvestmentHalf of firms in Australia and New Zealand identified investing in cybersecurity as very important in 2024

AI Expected to Play a Big Role in 2024

Promisingly, many leaders are looking beyond just risk aversion and are already making significant investments in innovative technologies such as AI. Over a third (40%) of firms surveyed reported AI is very important to their success, and many are already using it for essential tasks in their organizations today.

With traditional and predictive AI coupled with machine learning, many firms are using it for business process automation (40%), providing insight into their operational performance (39%), predicting project outcomes (38%) and computer vision (37%).

Meanwhile, Generative AI is already helping 43% of firms complete tasks such as extracting and summarizing data from documents and/or drawings, automating repetitive drafting and modeling tasks, and assisting with code compliance checks.

While AI is a Priority, Few Firms Label Themselves as Digitally Mature

The sharp focus many firms are placing on AI is a positive sign for technology innovation in the industry. But despite these results, many leaders still don't feel confident in their firm's digital maturity.

Only around a quarter (27%) of firms consider themselves at the mature or advanced stage of their digital transformation journey. While this is a low proportion, 55% of these respondents do think they'll be at that stage in three years' time.

Leaders are also taking multiple approaches to advancing digital maturity, with no single initiative dominating the industry. Just under half (49%) are planning to get there by deploying new business systems, while 47% are identifying tech subject matter experts in their businesses and 45% are creating a strategic plan for implementing tech trends.

ANZ AI PlaysOver Half of Firms in Australia and New Zealand Believe AI Will Support More Efficient Project Delivery

Common Project Management Challenges Remain for Many Firms

While leaders are keen on improving their digital maturity and investing in tech, many are still trying to overcome common project management challenges over the next year.

More than a quarter (28%) identified the increasing complexity of their projects and developing the right knowledge to expand resources as two of their greatest project management challenges. Meanwhile, 27% are still experiencing increased competition for top talent in the industry.

Similar to 2023, firms are also using similar key performance indicators to track project management. Among the top KPIs are estimate at complete (65%), client satisfaction (64%), net revenue (64%), and profitability (61%).

Promisingly, unlike many UK firms, these performance metrics are generally believed to be reported accurately, with around two-thirds of firms in Australia and New Zealand claiming they have high or very high confidence in reporting budget (66%), schedules (65%), project profitability (65%) and actual cost of projects (63%).

Workforces Expected to Grow Despite Employee-Related Challenges

Many firms are also making significant progress on their corporate and workplace strategies.

The majority have at least some tools or activities in place for key initiatives such as environmental, social and governance (ESG) (88%), business growth strategies (88%) and employee wellbeing and mental health (87%). ESG is a particular focus for many leaders, with four-fifths (79%) planning to commit more resources to these goals than they did in 2023.

Although many firms have tools in place for employee wellbeing, there were still a notable number that said they face employee-related challenges that detrimentally affect their firms. Almost half (48%) said the main factor is their difficulty to attract and retain talent, while others said their struggle with a lack of career and succession planning (38%) and the work/life balance they offer (37%) both have negative impacts.

Despite these challenges, almost two-thirds (64%) say they're planning to increase their workforce in 2024, including a third (35%) who say they'll significantly increase it.

How Do You Compare to the Rest of the Industry?

We've only captured a snapshot of the results here. In our complete 5th Annual Clarity Industry Study, we consider the project management and employee-driven challenges firms face in 2024 and how they're tracking performance metrics across their firms.

We also dig deeper into the results we've covered, comparing Australia and New Zealand to the UK and analyzing how the trends differ between consultancy, architecture and engineering firms.

Get your copy now to see how you compare to your competitors and explore the strategies you should focus on in the year ahead.


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