Discover the Trends and Challenges Shaping the UK Architecture, Engineering and Consulting Industries in the 5th Annual Deltek Clarity Study

The 5th Annual Deltek Clarity UK and ANZ Industry Study is live. Learn how more than 200 UK architecture, engineering and consulting firms responded.

Each year, we survey hundreds of UK senior decision-makers working in architecture, engineering, and consulting firms to understand the trends, challenges and opportunities shaping their industries' future.

With 2024 well underway, we're excited to share our 5th Annual Deltek Clarity UK and ANZ Industry Study. Inside, you'll find the full results for each region, including a deeper dive into the trends and insights shared by our 209 UK respondents.

Read on to discover the highlights from this year's survey – and see how the UK compares to Australian and New Zealand respondents across the board.

UK Businesses Are Serious About Tech-Driven Growth

Most UK companies increasingly see digital transformation as a strategic and economic necessity.

For example, 71% feel they'd lose market share if they failed to make significant strides in digital transformation in the next two years, and 36% believe it would happen within a year. However, concerns differ by industry, with architecture firms (36%) much less likely to feel the pressure to digitally transform over the next year compared to engineering firms (42%) and consulting firms (41%).

Market share concerns aside, 80% of UK companies plan to invest more in emerging technologies in 2024, including 29% who say they'll invest significantly more. In fact, most emerging technologies are seen as important to continued business success. This includes cybersecurity (48%), data analytics (43%) and artificial intelligence (AI) (43%).

Much like firms in Australia and New Zealand, 18% of UK firms see investment in technology, specifically AI, virtual reality (VR) and augmented reality (AR) as their biggest growth opportunity. Engineering firms are most likely to invest in the latter technologies (25%), while architecture firms are the least likely to invest (8%).

Over 70% of UK firms feel that focusing on digital transformation is key to maintaining market share

The AI Opportunity is Not Going Unmissed

As emerging AI technologies dominate public and industry discourse, UK businesses are exploring their ability to automate routine processes and enhance operational efficiency.

Generative AI is proving popular, with two-fifths or more using it for data analysis and exploration (44%), automating repetitive drafting and modelling tasks (42%), creating proposals and other marketing content (40%) and developing 3D models or renderings (40%).

Traditional AI and machine learning are also helping many firms analyze data using computer vision (43%) – a use-case favored by architecture firms (55%). These tools are also being used to unlock performance insights (38%) and predict project outcomes (37%).

Key benefits cited by UK firms following successful AI implementation are improved operational efficiency (53%) and improved project timelines (48%). More than seven in ten firms are confident that AI investment will expand the services they can deliver (75%) and drive significant competitive advantages in their industry (76%).

Over ¾ of firms in the UK believe that investing in AI will make them more competitive

Technology Barriers Remain, But Digital Maturity Shows Promise

Clearly, UK companies are committed to digital transformation, and emerging technologies such as AI are helping lead the charge. However, like those in Australia and New Zealand, not all UK businesses are equipped for seamless adoption.

Similar to 2023, the most challenging barriers to emerging tech adoption are the cost of technology (56%), prioritizing technologies most applicable to their business (55%), lack of employee education (53%) and a lack of client education (48%).

The UK is also a close match for Australia and New Zealand in its overall digital maturity. Just 24% of UK firms say they're at a mature or advanced stage of their digital transformation journey. However, 57% feel they'll be there in three years.

UK businesses are taking many approaches to increase digital transformation, with no single initiative dominating the survey. For example, 46% plan to hire staff or acquire a business with the necessary digital expertise, 45% plan to create strategic plans to implement trending tech and 44% plan to identify technology partners.

We also learned that 38% of our respondents' revenue is now generated from tech-based products, services or applications – with engineering (44%) offerings proving more tech-centric than those from architecture firms (34%) and consultants (36%).

UK Firms Identify Project Management as an Area for Improvement

Much like in 2023, architecture, engineering and consulting firms use many key performance indicators (KPIs) to track project management.

Approximately two-thirds of UK firms track estimate to complete (66%), net revenue (66%), on-time delivery (66%), profitability (64%), client satisfaction (63%) and cost variance (62%). Less likely to be tracked are effective billing rate (53%), schedule variance (53%), average collection period for A/R aged (52%) and multipliers (48%).

However, most UK firms believe they could improve how they track project specific KPIs, with seven in ten firms saying they track them adequately, poorly or not at all.

The KPIs cited as being most in need of improved tracking are earned value management (82%), client profitability (81%) and backlog (80%). On the flipside, more than half of UK firms are very confident that they are accurately reporting actual cost (62%), schedule (59%), project profitability (57%) and budget (57%).

Beyond KPI tracking, the top three project management challenges cited are increasing project complexity (27%), increased competition for top talent (27%), competing priorities including project management, design and business development (27%), and developing the right knowledge and upskilling staff to expand project resources (25%).

UK Businesses Are Ready to Drive Positive Socioeconomic Change

Most UK firms say they have the tools and activities in place to measure and drive growth while making positive contributions to their workforce and society.

For example, around nine in ten firms are well prepared for business intelligence data analytics (91%), business growth strategies (88%), employee wellbeing (86%), diversity, equity and inclusion (DE&I) (86%), corporate social responsibility (CSR) (86%) and environmental, social & governance (ESG) (84%).

In terms of achieving their ESG goals in 2024, UK firms are running close to Australia and New Zealand, with 71% planning to commit more resources and 21% planning to commit significantly more in 2024.

Over 70% of architecture, engineering and consulting firms in the UK plan to invest more in ESG

Geopolitical Uncertainty and Cybercrime Remain Major Business Threats

Cybercriminals continue to find new ways to target businesses, with 32% of UK firms experiencing a cybersecurity threat or attack in the past 18 months. Consulting firms were the most likely to fall victim at 42%, with architecture and engineering firms sitting at 25%.

It remains an immediate business threat for 2024, but UK companies are also likely to be concerned by global political uncertainty (78%) and competitors implementing new technologies faster than them (76%).

We also learnt that Australian and New Zealand firms are more likely to be concerned about global and local recessions than their UK peers (78% vs 70%, respectively). However, businesses in both regions are more concerned about the economy than 12 months ago.

How Does Your Company Measure Up?

This is just a snapshot of the results from our 5th Annual Deltek Clarity UK and ANZ Industry Study.

You can read the full report here to learn more about the trends, challenges and opportunities discussed by our 208 UK industry respondents, including a deeper dive into today's biggest project management and recruitment challenges.