Four highlights from the latest research into New Zealand engineering firms

Tweet it: 'Currently, half of engineering firms see themselves in the ‘exploratory’ phase of digital maturity'

For forty years, the Deltek Clarity Architecture & Engineering (A&E) Industry report has surveyed architecture and engineering firms across North America to provide benchmark data for the industry. Now, the Clarity survey is also looking at firms in the APAC region.

To celebrate the survey and its findings making their way to New Zealand’s shores, Paul Evans, Chief Executive of the Association of Consulting and Engineering New Zealand, joined Deltek’s Megan Miller and Kimberly Sack. Together, they presented a webinar that examined the findings – and what they mean for New Zealand’s engineering firms.

You can watch the full webinar on demand here. But if you’re looking for the main takeaways, this blog will break down the key findings from across the report’s four sections.

Digital impact: people still come first

Innovative technology clearly plays a role in the continued growth of engineering firms. Despite this, people and process remain a major focus for firms. So, when asked how they plan to address their technology challenges, the common answer was to hire staff or acquire companies with relevant expertise.

“Currently, half of engineering firms see themselves in the ‘exploratory’ phase of digital maturity,” explains Kimberly. “But 40% have the ambitious goal of reaching the ‘advanced’ bracket. What initiatives are they putting in place to take that leap? The results show that people are really at the heart of how firms want to address these challenges. Some want to identify and develop subject matter experts, some want to hire staff, and some want to identify a champion to lead their initiatives.”

Crucially, the survey was conducted before the impacts of COVID-19 and global lockdowns began affecting A&E firms. Attendees were quick to ask the webinar hosts if the pandemic had changed the industry’s technology focus.

“There’s been a tremendous acceleration in digital transformation this year,” Kimberly says in response. “Much of that has been in how companies work from home, but it’s also prompting other questions: how should you interact with clients now? How do you deliver projects? This has forced the industry to change some things, some for the better. So now the question becomes, what did you learn during this period, and what can you take back to the office when things start to return to normal?”

Digital operating model: from people to process

While the webinar covers the many financial and project management challenges reported by A&E firms, a common theme emerges: “Many of the top challenges and initiatives to address challenges are around people and processes” says Kimberly. “And firms clearly can see where the opportunity for improvement lies, with the surveyed companies reporting widespread reliance on manual processes and spreadsheets in certain departments.”

In New Zealand, firms report Accounting and Finance relying most on spreadsheets, followed closely by Procurement, then Operations and Resource Management. Paul found this reliance on manual data tracked his own experiences working with firms in New Zealand – and his own understanding of the opportunities available to break free from spreadsheets.

“Some of this is just the nature of the business, and what people are used to doing,” says Paul. “Many companies have the technology to run these processes in their ERP or accounting system, but they're not using it. They're still doing it outside the system, manually and in spreadsheets. A lot of this comes down to trust; it's getting used to it, giving yourself the time, and knowing that what you're doing in your spreadsheets can be trusted to a broader portfolio of software.”

Business influence: the collaboration opportunity

One of the most interesting findings from the survey was the state of collaboration across firms. None of the companies surveyed in New Zealand or Australia considered themselves to be truly collaborative across the business, as highlighted by Megan Miller.

Far from seeing this as an issue though, Megan identifies the potential for firms: “There is a huge opportunity here for companies to dig into. What are some of your barriers? What kind of challenges is this presenting your company, and what problems is this causing? Why aren't your teams collaborating more? Do they need better tools? Do they need better understanding of each other's world to help encourage that collaboration?”

This part of the survey also examined firms’ priorities for their projects. Social and environmental impacts of projects topped the list across firms in APAC. Paul notes that this is significant for organisations in New Zealand: “I think this focus is driven right at the Government level. We've had a Government come through with a really strong focus on delivering projects that serve a purpose. It’s great to see this concept coming through in the answers from firms as well.”

KPIs: track the right numbers at the right levels

The Clarity survey asked firms what KPIs they track. Unsurprisingly, profitability, net revenue and average collection period topping the list. But Megan sees these metrics as holding additional value for firms.

“I would challenge you to look at what level you analyse the numbers. Can you look at your profitability just at the company level? Are you looking at it by client? Are you looking at it at the project level and the project manager level? Maybe you have some challenges in one, but not the others. The way you slice and dice these KPIs really can help tell a different story within your company.”

Beyond the ‘how’, Megan also sees the results as helping guide the ‘what’ of KPI tracking – and once again, it comes back to people: “Looking at employee turnover, most business fall in the 6-15% range. But it’s important to consider the circumstance here. Is it voluntary or involuntary? What are the common themes? It’s important to understand the details. If you only have detailed metrics in Finance, you could be missing out on opportunities for human resources and business development.”

Go beyond the highlights in the full webinar

Here, we’ve picked some of the key analyses our webinar hosts offered for each section of the report – but there are plenty more insights in the full webinar.

You can watch the webinar on-demand to learn more about:

• Which technologies are most important to engineering firms
• The reported barriers and enablers to business success
• Firms’ most pressing finance and project management challenges