Deltek Clarity: A Global Perspective on the Key Industry Trends and Benchmarks for Architecture & Engineering Firms

By Megan Miller, Director of Product Marketing, Deltek

For decades, Deltek has surveyed industry leaders in the architecture and engineering (A&E) industry through the Deltek Clarity study to gain insight into market conditions, benchmarks and top challenges. This valuable resource gives A&E firms the ability to see how they compare to others in the industry, identify strengths in their business and find areas that need improvement.

This week, Deltek is launching the 42^nd Annual Deltek Clarity Architecture & Engineering Industry Report in the United States and Canada (NA) and the 2^nd Annual A&E Industry Report for Europe, Middle East (EMEA) and Asia Pacific (APAC) regions. Knowing the industry has faced unique challenges in the past year, the Deltek Clarity report highlights the business impact of the pandemic for A&E firms.

As a leading provider of project-based solutions and technology for the A&E industry, Deltek delivers these reports annually to help customers and the broader industry determine where they are today, where they want to be tomorrow, and identify how they can leverage technology to get there.

As we dive into the results, it’s evident that A&E firms worldwide are facing similar challenges. Globally, three main themes rose to the top of this year’s reports: Business Automation, Next-Level Project Management and Employee Retention − with Technology as the common thread across all themes.

Here is a snapshot of the overall themes, challenges and metrics that A&E firms may want to look at closer as they move into the back half of 2021.

Business Impact of the Global Pandemic

Across the globe, A&E companies were forced to pivot quickly to changing client and project demands throughout the last year. For some, that meant project delays and cancellations, while other firms saw accelerations and increased scope. In North America, companies saw an average of 24% of projects delayed and 14% accelerated, but 65% of projects were not impacted. In EMEA and APAC, 27% of projects were delayed, 22% were canceled and only 20% were accelerated.

As a result, firms adapted quickly by investing in technology to better support remote teams, client coordination and project delivery. Most firms plan to continue investing in technology to improve project and resource management, increase cybersecurity and improve business automation.

Firms Increase Focus on Business Automation

Throughout several areas of the business, A&E firms are looking to business automation to address challenges and improve efficiencies. In North America, nearly half of study participants indicated that eliminating inefficiencies with better processes is one of their top project delivery challenges.

One area where firms have room for improvement is manual data entry. Most accounting and finance teams are moderately to completely reliant on manual data entry and spreadsheets. And, it isn’t much less for resource and operations management.

With project-based solutions and improved automation, architecture and engineering firms of all sizes can remove unnecessary manual entry, improve data accuracy and streamline processes. Every firm has the opportunity to improve in this area, and it should be a priority.

It's Time to Take Project Management to the Next Level

Project management is at the core of every A&E firm, and yet this year’s report indicates companies are struggling with project management around the globe. From competing priorities and staff shortages to inexperienced project managers (PMs) and lack of collaboration − firms are facing many challenges, some of which are having a direct impact on the bottom line.

The majority of projects in EMEA and APAC are over budget and behind schedule, with only about 5% indicating that 4 out of 5 projects are on track. Firms in North America are averaging 38% of projects over budget and 35% behind schedule.

And while most firms are monitoring project performance, they may not be monitoring the right metrics. The most-tracked metrics look back at past performance and are not a way to proactively manage projects. Nearly half of A&E firms struggle with reporting accuracy for budgets and schedules making it nearly impossible to deliver better projects. And many firms don’t have formal training opportunities for PMs, which is putting their company and their projects in jeopardy. To be more proactive, firms need to focus on training team members in the art and science of project management.

This year needs to be the Year of the Project Manager. For some, that’s going back to the basics of project management to make sure the foundation is solid, and PMs have the right knowledge and training. For others, it’s time to take project management to the next level with advanced tools and technology so teams can exceed client expectations.

More than half of financial leaders who participated in the Clarity study identified Training PMs on Financial Management as one of their top initiatives. To address this, firms should take a close look at the challenges they are facing, the struggles of their PMs and find ways to best equip them to succeed as project managers, not just manage a few projects they are designing.

Employee Retention Will Be Critical to Success

While not different from past years, the pressure on limited time and resources is rising. The top three project management challenges identified in the 42^nd Deltek Clarity A&E Industry Study focus on people. While the top financial management challenge is identifying and retaining qualified staff, and far and away, the top human resources challenge is the availability of good candidates. We see this in the increase in utilization rates across North America, and if sustained, it could lead to burnout and turnover.

The people challenges are impacting every single area of the business. A&E firms need to look at strategic plans to find the right talent for open positions and not lose sight of engaging current employees. In addition, succession and career development planning are at the top of the list for challenges managing employees, but without a clear path for your team, it could lead to turnover, lack of engagement or, an impact on morale. As a project-based business that is centered around people, it’s vital that companies invest in their employees in ways that mean the most to them.

Bring Clarity to Your Conversation

The Deltek Clarity report has a long-standing tradition of delivering meaningful insights into market trends and benchmarks in the A&E industry. At Deltek, we know the importance of going beyond just delivering software. We collaborate with our customers and industry partners to help companies understand their position in the industry and look for ways to take their business to the next level. The Deltek Clarity report is a catalyst for meaningful conversations with your leadership teams, managers, employees, and others in the industry.

Deltek Clarity not only helps identify potential weaknesses but provides the context needed for forward-thinking business strategy and conversations. Empower your teams to connect across traditional departmental silos to determine the best initiatives for the business as a whole, so you can be better aligned, better informed and develop the right plans to reach your business goals.

Download the full reports today for greater insight into your business and pinpoint where there is room for improvement. Let Deltek help your digital transformation through technology, business automation and next level project management so you can thrive in the coming years.

To keep up with what's going on in the A&E industry, be sure subscribe to Deltek's Architecture & Engineering blog and EMEA & APAC blog focused on industry best practices to keep your firm operating at peak efficiency.