The Deltek Clarity A&E Industry Study Provides Insights for Business Planning

In a recent webinar, Todd Young, CFO at Crawford, Murphy & Tilly, and Mark Holle, Director of Finance and Accounting at Sanbell, discussed how their firms use the Deltek Clarity A&E Industry Study to successfully plan for the upcoming year.

Deltek has been producing the Deltek Clarity Architecture & Engineering (A&E) Industry Study for 45 years. It is the longest-running and most comprehensive study specifically for the architecture and engineering industry. The study delivers industry benchmarks, identifies key market challenges, highlights bright spots, and monitors market trends.

Every year, A&E firms confront a dynamic landscape, seeking strategies to navigate industry shifts and competitiveness. The study is a vital resource for firm leaders, offering comparative analysis with industry peers and invaluable insights to leverage technology to drive business growth.

In a rapidly evolving industry, firms like Sanbell and Crawford, Murphy & Tilly (CMT) leverage the Deltek Clarity A&E study to enhance their business planning and strategic decision-making processes. Read how this valuable study is shaping their approach to performance evaluation and growth.

Sanbell and CMT Use Deltek Clarity Insights for Business Planning

Sanbell provides comprehensive land development and public infrastructure design services, with offices across the Western United States. The firm was formed by merging four firms and acquiring a fifth firm between May 2023 and June 2024 to become the newly branded Sanbell.

The Deltek Clarity Study's comprehensive industry-specific data allows Sanbell to compare its performance against competitors and peers rather than just relying on internal historical comparisons. This deeper insight into industry metrics has enabled the firm to identify key performance indicators (KPIs) for improvement each year, helping them address areas where they may lag the industry.

As Sanbell has grown, they are also using the study to assess performance across different firm segments, making it an invaluable tool for organizational improvement and strategic decision-making. The specificity of the data helps them target necessary changes at various levels, ensuring continuous growth and competitiveness. Mark Holle, Director of Finance and Accounting, continues to find significant value in the study year after year. "The study is a gold mine of industry information for us to use," Mark commented.

According to Todd Young, CFO at Crawford, Murphy & Tilly (CMT), a civil infrastructure professional services firm, his team examines the Deltek Clarity benchmarks to see how they compare to other firms in the industry. CMT is also taking a close look at the challenges and trends the industry is facing. Attention is also paid to the technology trends highlighted in the study. "It is essential for us to understand where other firms in the industry are in terms of what they are implementing to solve challenges and whether we are having the same or different issues," said Todd.

Regarding human resources, CMT tracks voluntary turnover and uses the study to see how it compares to others in the industry. "Our employees are our most important assets. If we are trailing compared to the industry numbers, we use that information to identify the reasons and research how we can course correct," said Todd. "Fortunately, our voluntary turnover rate is below industry norms. Still, we want to continue tracking it over time and follow the trends report in the study."

CMT also leverages the Deltek Clarity Study to monitor financial performance and ensure they monitor the right metrics for their firm. "One of the key metrics we've used for a long time and include in our corporate goals is the billable percentage. Based upon the Deltek Clarity Study, we're changing our corporate goal regarding utilization metrics we are seeing," added Todd.

Clarity Study Helps Firms Benchmark Their KPIs

Sanbell uses the study's net labor and payroll multipliers to ensure they are within industry standards and have appropriate staffing levels. "We compare our performance to industry benchmarks, which helps us assess whether staffing and overhead rates are aligned with our new size," said Mark. The firm also finds a heightened significance in monitoring the overhead rate, especially when considering future mergers and acquisitions activity.

When looking at project backlog, Mark's team observes that a backlog much higher than the industry average may indicate issues with meeting deadlines or inadequate staffing in certain areas, which is valuable for informing future decision-making. Additionally, the average collection period is a critical metric for the firm, as timely client payments signal satisfaction. Keeping the collection period below industry standards is essential for maintaining the organization's financial health and is a critical success indicator.

Sanbell uses the study as a single source of truth independent of the management team. When looking at the number, the firm relies on the 1% rule, which means if it can achieve a 1% performance increase in certain areas, it will move the needle on profitability or performance. "When you bring five companies together and have 1% improvement, that can be sizable. Having that basis of truth helps our organization immensely," Mark emphasized.

Assessing Firm Performance for Annual Planning

The Deltek Clarity Study helps CMT get a clear focus on what the firm is doing and what it needs to do better when comparing its numbers to the industry. Todd explained, "We see value in the Deltek Clarity Study to benchmark our performance against industry standards. It helps us assess whether our revenue growth and operating profit are strong or average. We also use it to identify areas where even a 1% improvement could have a significant impact." He expressed that looking ahead, the firm plans to implement a long-term benchmarking project that will track key performance indicators (KPIs) over the past 10 years and forecast trends for the next five years, comparing their progress to industry averages.

Advice For Firms Who Have Not Participated in the Deltek Clarity Study

Todd believes that completing the Deltek Clarity survey can be highly beneficial. “Participating in the analysis is more beneficial than simply using the results, as it offers valuable lessons and a clear roadmap for improvement," shared Todd. "It is some of the best time you can ever spend, and while focusing on financial metrics is essential, the Deltek Clarity Study provides much more than just numbers. It reveals trends and topics that may be overlooked by management teams, serving as a crucial eye-opener." Todd added, "When gaps are identified, it prompts reflection on why and how to address them, sometimes requiring teams to 'catch up.'"

Mark suggests, "I think it is essential to align the organization with industry trends and recognize challenges, and being a part of the survey brings this front and center because we need to answer the questions." He advises, "Just commit yourself to participating and entering your financial results. You'll find that getting that information in there is not that much of an activity and can prove very helpful."

The Deltek Clarity A&E Industry survey is open to firms in the architecture and engineering industry in the U.S. and Canada of all sizes and complexities. When companies participate, they will receive a scorecard with personalized results that calculate your firm's KPIs and show how they compare to the industry benchmarks. The next Deltek Clarity A&E Industry survey will open at the end of January 2025. The current study can be viewed by clicking the link below.