Architecture

& Engineering
Industry Report
Trends and Benchmarks in EMEA and APAC

In collaboration with:
The Deltek Clarity Architecture & Engineering
Report examines the digital impact of technology
in the A&E industry, the challenges and benefits
of change management, how the digital operating
model can accelerate business growth and key
benchmarks for firms to evaluate performance.
Table of Contents
04 Introduction 19 Section Two: The digital
operating model
06 About the Study
27 Section Three: Business influence
08 Executive Summary
35 Section Four: Benchmarking and KPIs
10 Section One: Digital Impact
41 Conclusion
Introduction
To seize the opportunities of a changing world, architecture and engineering firms
must embrace new technologies.
The Deltek Clarity A&E Study shows that the architecture
and engineering (A&E) industry is continuing its digital
transformation journey. Organisations across Europe,
the Middle East and Africa (EMEA) and Asia Pacific
(APAC) are starting to embrace emerging technologies
to help secure an advantage in a competitive market.
However, there are still challenges to overcome, both on
a global and an industry level.
Firms of all sizes want to leverage the benefits of
technology to improve their business processes
and deliver the best outcomes for clients, but are
hampered by an industry that has struggled historically
with actionable data. They understand the benefits of
increased collaboration between colleagues, partners
and clients, but face siloed work practices and a lack
of transparency when it comes to information sharing.
There is a willingness to embrace technology, but
wan apparent uncertainty about how to proceed.
On a macro level, the world is in flux. While this study
was conducted before the global health crisis that has
dominated 2020, the results remain indicative of the
key trends for the A&E sector and provide valuable
insight for stakeholders keen to prosper in these times
of uncertainty.
Senior business leaders face a dilemma as to the
best path to profitability, and how technology can
best enable that journey. Where they may have
been reluctant to invest in technology, they now have
little choice, a reality amply demonstrated by the
disruption already common across industries like
travel, hospitality, entertainment and banking.
In addition, the millennial workforce is impacting This year’s Deltek Clarity A&E Study explores the
business practices, with an employer’s embrace of technology, processes and people at the heart of
technology and innovation now a significant factor in the industry. What are some of the key technologies
their choice of workplace. that are set to drive growth, and what solutions are
potentially being missed?
Despite such hurdles, the study shows there is much
to be positive about. The potential for emerging It also examines the gap between the idea of digital
technologies such as the Internet of Things (IoT) and transformation and the reality.
geolocation are immense
and are already being put Where are the areas in
into practice, replacing Senior business leaders face which firms excel, and
dated techniques and where are their efforts
processes to produce a
a dilemma as to the best path being hampered? What
more dynamic,intelligent and to profitability, and how technology can business leaders do
connected environment. to lead their companies
can best enable that journey. to profitability, and how
Although not widely adopted do firms from different
in the A&E industry yet, there geographies measure
is also tremendous potential success?
for artificial intelligence (AI) applications to help
professionals make better informed decisions that The study’s examination of benchmarks and trends
will lead to enhanced economic, social and provides a platform for members of the A&E industry
environmental outcomes. to build their own transformation story and position
themselves to drive their businesses forward.
About This Study
Background
Each year, Deltek conducts a survey of firms in the A&E
industry to identify key performance indicators (KPIs),
market conditions, and industry trends. Now, for the
first time, we are expanding our research to include
A&E organisations across EMEA and APAC.
Company Size and Region
We define small, mid-sized and enterprise firms in the
following way:
• Small: 20–100 employees (41% of participants)
• Mid-sized: 101-500 employees (39% of participants)

600
• Enterprise: 501-5000 employees (21% of
participants)*

Respondents Participants’ revenues range from $2 million to $1 billion+.

The contributors represent the following countries:

Uncovering key issues impacting the
Architecture and Engineering industry UK (29%), Australia (17%), Germany (12%), Singapore
(8%), New Zealand (8%), Norway (8%), Denmark (8%),
Sweden (8%)*.
Surveying 600 decision-makers, this study
collected responses on emerging technology trends, Respondents’ job roles are as follows: CEO (15%),
attitudes towards digital transformation, existing managing director (15%), CFO (15%), head of finance
and future challenges, the role of leadership, (15%), COO (8%), head of operations (8%), operations
benchmarking and KPIs. manager (8%), head of delivery (8%) and head
of projects (8%).
Methodology
The online survey was conducted between February
26 and March 24, 2020. Individual responses were
gathered from 600 decision-makers in the architecture/
engineering and engineering/architecture industries. The
survey data was analysed using descriptive statistics and
simple statistical comparison tests.

Company Type
The term architecture and engineering (A&E) refers
to all architecture, engineering and allied companies
included in the study. We also break out two broad
segments for comparison: architecture (A) or
architecture/engineering (A/E) firms are either pure
architecturaldesign firms or architecture-dominant
firms that also provide engineering services.

A/E firms (not to be confused with A&E, which refers

to all design firms) are also known in the industry as ‘big
A, little E’ firms. In this study, 40% of participants were
architecture or A/E firms.

Engineering (E) or engineering/architecture (E/A)

firms are either pure consulting engineering firms
or engineering-dominant firms that also provide
architectural services. E/A firms are also known
in the industry as ‘big E, little A’ firms. In this survey,
60% of participants were engineering or E/A firms.

6 Deltek | Clarity Architecture & Engineering Industry Report

 Regional Breakdown
68% C-Level
UK 29% Executives
Sharing their understanding of key technology
Australia 17% trends and value to their businesses

Germany 12%
There are some cases where questions and responses
correspond with those from the North American study,
Singapore 8% enabling us to compare the data between the regions.

NZ 8% This study examines how companies performed during

the 2019 fiscal year. Much has changed in the world
between the fielding of the survey in early 2020 and its
Norway 8%
release in mid-year. However, the benchmarking data
remains critical as firms focus on future success.
Denmark 8%
While the full impact of the global pandemic is still
Sweden 8% unknown, companies will need to focus on efficient
project management, protecting margins and
maintaining cashflow. This report can help firms
*Please note that figures may not identify key areas of focus so they can drive their
add up to 100% due to rounding business forward.
Executive Summary
The impact of emerging technologies is felt in different ways, with variations based
on region, company type and job role.

The study uncovered some key issues currently impacting the A&E sector, including how firms are responding
to industry challenges, their feelings toward digital innovation, and their plans for business growth.

Some key findings from the survey:

Section 1: Digital impact

The findings uncover a strong link between the level of understanding of key

Top
technology trends and their value to the business, but differences in opinions
between the types and sizes of organisations. The survey also highlights a

three
shortage of quality data that is impeding technology adoption, along with a
cautious approach to digitalisation.

technology trends • When asked what technology trends they consider most important to
their business, respondents said IoT (84%) and geolocation (83%), trailed
1. IoT by big data (69%)
2. Geolocation • The engineering sector is far more likely (72%) to consider AI to be ‘very
3. Big data important’ compared to the architecture sector (44%)
• A lack of data maturity may explain why only 34% of all respondents
consider machine learning to be important to their business
• Nine out of ten (89%) say they have a full understanding of their digital
transformation strategy, while 50% describe themselves only as
‘exploratory’ in their digital transformation maturity

89%
of respondents “have
a clear understanding
of their firm’s digital
transformation
strategy” but only 1%
consider themselves
‘advanced’ in their digital
transformation maturity

8 Deltek | Clarity Architecture & Engineering Industry Report

 Section 2: The digital operating model
While companies are focused on increasing profitability, there are different
perspectives on the best way to achieve this. The survey also shows that the

21% top priorities when starting a project vary significantly from the top project
success factors.
of financial leaders cite
‘increasing profitability’ • A fifth of A&E firms’ financial leaders cite ‘increasing profitability’ as the
as the greatest challenge greatest challenge they will face in the next three years
they will face in the next • Respondents’ top three initiatives to address financial challenges in the
three years next three years are business process improvement (21%), organisational
changes or realignments (19%) and better forecasting (13%)
• Accounting and finance are still the most reliant on spreadsheets and
manual data entry

Section 3: Business influence

Despite being a key driver for business growth, collaboration levels are still
relatively low in the A&E industry. However, the results indicate that business

2% leaders are taking a hands-on approach to their roles.

• A fifth (20%) of respondents maintain that the biggest barrier to success is

of respondents
‘little cross-functional cooperation’
define their firms as
‘completely integrated’ • Only 2% of respondents describe their firms as ‘completely integrated’
• In terms of engagement, 44% of respondents say they interact most
frequently with colleagues in the C-Suite, more than any other job roles

Section 4: Benchmarking and KPIs

A&E firms from different regions measure themselves against a list of KPIs,
ranging from net revenue and profitability to client satisfaction and cost

Key variance.

barrier • Strong project monitoring provides the greatest help in meeting KPIs, while
little cross-functional cooperation is the biggest barrier to success
The ‘speed of • Denmark takes the lead in tracking the listed KPIs, with an average of 74%
technological
• The most frequently ranked challenge for project managers in the next
advancement’ is
a key barrier to three years is ‘competing priorities, including project management, design,
change within firms and business development’
• Australian firms have a low utilisation rate compared to those in other
regions (58%), but have a competitive proportion of projects on or under
budget (73%)

Deltek | Clarity Architecture & Engineering Industry Report 9

SECTION ONE

Digital Impact
Respondents see the benefits of digitalisation, but the rate of progress differs
considerably across countries and technologies.

Key Data Points from the Survey

• When asked what technology trends they consider most important to their
business, respondents said the Internet of Things (IoT) (84%) and geolocation
(83%), trailed by big data (69%)
• The engineering sector is far more likely (72%) to consider artificial intelligence (AI)
as ‘very important’ compared to the architecture sector (44%)
• A lack of data maturity may explain why only 34% of all respondents consider
machine learning to be important to their business
• Nine out of ten (89%) say they have a full understanding of their digital
transformation strategy, while half (50%) describe themselves only as
‘exploratory’ in their digital transformation maturity

84% 72% 89%

consider the Internet of engineers are far of respondents
of Things (IoT) more likely to consider say they have a full
technology trends artificial intelligence understanding of their
the most important (AI) as ‘very digital transformation
to their business important’ compared strategy
to the architecture
sector (44%)
Mind the Technology Information Gap
Innovations like big data, AI, geolocation and IoT are transforming the industry, though this varies
by location and business type.

Organisations worldwide are seeking to transform their
business through investing in technology – and the A&E
industry is no different.
When asked what technology trends they consider
most important to their business, A&E respondents
overwhelmingly said IoT (84%) and geolocation (83%),
trailed by big data (69%).
More firms in New Zealand consider IoT to be the most
important tech trend than anywhere else (90%). But IoT
also tops the list in Denmark (88%), alongside big data,
and comes first place in Germany (87%), Australia (84%,
tied with geolocation) and Sweden ( joint top with AI at
82%). IoT also ranks top for North America, though only
with 52%, pointing to a more even distribution between
tech trends across the region.

IoT, Geolocation and Big Data are the Most Important Technologies for A&E Firms
% of respondents that rated technology trends 'very important' to their business

The Internet of Things 84%

Geo Location 83%

Big Data 69%

Artificial Intelligence (AI) 61%

Data Science 60%

Blockchain 38%

Wearable Tech 34%

Machine Learning 34%

Natural Language
33%
Processing

North American firms consider tech trends to be less
important compared to other regions. For example,
Swedish firms are almost twice as likely (66%) to find
key technology trends important to their business than
their North American counterparts (34%).
The findings uncovered a strong link between the level
of understanding of key technology trends and their
value to the business. Sweden and Germany have the
highest level of understanding of the latest technology
(72%). Some way behind are the UK (56%), Denmark,
Australia, New Zealand (all at 54%) and Singapore
(52%). Norway has the least understanding (49%)
of the countries questioned.

Deltek | Clarity Architecture & Engineering Industry Report 11

Members of the C-Suite are more likely to have a high
level of understanding of what they deem the most
important technologies: IoT (78%), geolocation (80%)
and big data (72%). This is understandable: IoT provides
data that enables the industry to see how buildings
perform in real-world scenarios and can help shape
future designs.
In addition to Australia, geolocation ranks top for
Singapore (96%), Norway (92%) and the UK (83%).
Geolocation is expected to be key for construction.
Many materials like concrete and masonry are expensive
to move long distances when measured in time, cost and
carbon. Using geolocation at a large scale can help find
the optimum use of suppliers and logistics.

The C-Suite Opinion

The C-suite are more likely to understand the technologies they think are 'very important'

85%
The Internet of Things
78%

81%
Geo Location
80%

72%
Big Data
72%

58%
Data Science
67%

55%
Artificial Intelligence (AI)
62%

Blockchain 36%
45%

28%
Wearable Tech
28%

26%
Natural Language Processing
35%

25%
Machine Learning
35%

Very important High level of understanding

12 Deltek | Clarity Architecture & Engineering Industry Report

The AI Divide
Looking to other emerging technologies, there was
a notable difference between the A/E and E/A sectors;
the engineering sector is far more likely (72%) to
consider artificial intelligence (AI) as “very important”
compared to the architecture sector (44%).
This could be due to the fact that consulting
engineering firms are involved in the design, build
and maintenance of assets where there is a wealth
of data on asset usage.
Architecture is more strongly associated with design,
and while there are many applications of AI in this
part of the project lifecycle, the difference is that
engineering firms work across the entire asset lifecycle.
There is also a difference of opinion between
different-sized firms regarding the relevance of vaious
technologies to their businesses. Respondents from
larger companies are more than three times more
likely to find machine learning ‘very important’ than
smaller companies (60% vs 19%), almost three times
more likely to find natural language processing ‘very
important’ (63% vs 22%) and more than twice as likely to
find wearable technology ‘very important’ (52% vs 25%).

Importance of Technologies Varies According to Company Size

Companies were aligned on the most important technologies,
but there's a difference regarding the following trends according to firm size

Machine
19% 36% 60%
Learning

Natural
Language 22% 28% 63%
Processing

Wearable
25% 32% 52%
Tech

20-100 101-500 501- 5000+

Deltek | Clarity Architecture & Engineering Industry Report 13

The Data Dilemma
Big data trails far behind the two biggest tech trends. This lack of data maturity may also explain why only
This is perhaps surprising, particularly given that IoT 34% of all respondents consider machine learning
typically generates masses of data. to be important to their business – a technology that
relies on quality data to deliver results.
One possible reason is that the industry has yet to
become fully data led. While some initial standards for
data are in place, they still need to be finalised.
Perception vs Reality
While almost all companies embrace the need for digital transformation,
their rate of progress often lags behind.

As we’ve already seen in this report, A&E firms are However, the survey’s findings expose a clear
investing in technologies such as IoT, geolocation and contradiction between respondents’ belief that
AI to seek their own competitive advantage. they have a high level of understanding of digital
transformation, and the reality.

The Digital Transformation Maturity Spectrum

Only 1% of respondents currently consider themselves as ‘advanced’ in digital transformation maturity

Now In 5 years
Nascent. There’s a disconnect between business
9% 7%
and digital IT initiatives and a misalignment with
company strategy
Exploratory. There’s a recognition of the need for
digital transformation strategy but execution is at the
lighthouse stage, on an ad-hoc project, which is neither
predictable or scalable
36%
Applied. There’s alignment between business and IT
goals and momentum to adapt, but not dedicated
50% focus on the full disruptive potential of digital initiatives

Mature. Business and IT management are integrated

and delivering digitally enabled product / service
experiences on a continuous basis
40% Advanced. Digital transformation is a primary strategic
32% focus at the executive level and a culture of innovation
is prevalent along with, increasing revenue, improving
8% 16%
1% customer experience and growing operating margins

Deltek | Clarity Architecture & Engineering Industry Report 15

 This indicates that respondents are keen to embark
on digital transformation but are still early in the
process. Indeed, only 1% defined their firms as

89% 50%
‘advanced’ in their digital transformation maturity,
where digital transformation is a primary strategic
focus at the executive level and there is a prevalent
of respondents consider themselves
“have a clear to be ‘exploratory’ culture of innovation.
understanding in their digital
of their firm’s
but transformation
No respondents in Australia, New Zealand, Singapore or
the UK currently categorise themselves as ‘advanced’.
digital maturity, where
transformation there isn’t even a Sweden ranks highest in the ‘mature’ stage at 18%, while
strategy” strategy in place
all the other countries are in single digits. At the other
end of the spectrum, Singapore is still in the early stages
While almost nine out of ten (89%) individuals say they of its transformation, with more respondents (72%) in
have a full understanding of their digital transformation the ‘exploratory’ category than any other country.
strategy, half (50%) state that they are only at an
Norway expects to see the most change in five years
‘exploratory’ stage in their digital transformation
time, with 34% in the ‘advanced’ phase of transformation.
maturity. This means they recognise the need for a
Indeed, all respondents are optimistic about their
digital transformation strategy, but don’t yet have one
development; only 7% predict they will still be in the
in place; digitalisation efforts are confined to testing the
‘exploratory’ phase, with most respondents expecting to
waters with ‘lighthouse’ or ad-hoc projects.
be at the ‘mature’ or ‘applied’ stages by 2025.

Overcoming Challenges
The findings show that firms recognise that technology
can help them overcome the roadblocks they face
within their organisation. For example, problems cited in
business development are finding time to nurture client
relationships (17%), identifying new prospects (15%) and
finding the right teaming partners (14%).
As we examine elsewhere in this report, a fifth of A&E
firms’ financial leaders cite ‘increasing profitability’
as their greatest challenge over the next three years.
Elsewhere, 20% of respondents say their biggest barrier
to success is ‘little cross-functional cooperation’ –
despite almost the same number (21%) believing cross-
functional cooperation is a key facilitator for success.
While there are evidently initiatives in the pipeline, firms
must first address internal barriers to change. The top
three cited by respondents are ‘speed of technological
advancement’ (15%), ‘fulfilling client demands’ (14%)
and ‘change management’ (12%).

The Top Barriers to Change Within Firms, Ranked First by Respondents

Speed of technological
15%
advancement

Fulfilling client demands 14%

Change management 12%

16 Deltek | Clarity Architecture & Engineering Industry Report

Actionable Insights
Given that 40% of respondents have the ambitious
goal of being in the ‘advanced’ bracket in five years’
time, how can they make that leap?
Most firms are putting people at the heart of
addressing technological challenges. Some are
identifying and developing technology subject matter
experts (60%) to help them on their journey. Others are
looking to hire staff, acquire another company with the
necessary expertise (58%) or identify a champion to
lead their initiative (52%).

Most Common Initiatives Employed by Companies to Address Technology Challenges

The most frequently ranked (1,2 and 3) initiatives, prioritise getting the right people
before strategic implementation of technology

Sweden Denmark Norway Germany Australia NZ Singapore UK NA

Create
strategic plan
for
implementing
technology
trends 22% 28% 34% 33% 48% 46% 60% 41% 71%

Identify
Champion to
Lead Initiative
56% 64% 68% 41% 52% 50% 50% 50% 33%

Hire Staff or
Acquire
Company with
Necessary
Expertise 70% 62% 54% 67% 47% 48% 46% 62% 30%

Develop
Budget for
Strategic
Investment
42% 40% 52% 55% 56% 64% 36% 47% 53%

Identify and
Develop
Technology
Subject Matter
Experts 70% 52% 54% 67% 54% 62% 64% 58% 48%

Educate Staff
on Technology
Trends
40% 54% 38% 37% 43% 30% 44% 42% 55%

Deltek | Clarity Architecture & Engineering Industry Report 17

Respondents in Norway (68%) and Denmark (64%)
think it is most important to identify a champion to lead
their initiatives. Both Swedish (70%) and German firms
(67%) think it is equally important to hire staff or acquire
a company with the necessary expertise or to identify
and develop technology subject matter experts.
North America is the only region to indicate that
creating a strategic plan for implementing technology
trends is the most important way to address technology
challenges (71%).
SECTION TWO

The Digital
Operating Model
A&E firms face a range of business challenges. Embracing digitalisation over manual
processes could be key to success.

Key Data Points from the Survey

• “Increasing profitability’ is the greatest challenge over the next three years,
according to 20% of financial leaders
• In A&E firms, more people interact with the C-Suite than with any other group
• Accounting and finance are still the most reliant on spreadsheets and manual
data entry
• Opinion differs across C-level roles on how to increase profitability

20% 21% 61%

of financial leaders cite of project managers of CEO advocating
‘increasing profitability’ cite “staff shortages” for automating the
as the greatest challenge as the biggest challenge month-end process
they will face in the next in the next three years
three years
Project Management
Over the next three years, staff shortages are set to
present the biggest challenge for project managers
(PMs), at 21%. Ranking second was competing priorities
(16%), showing that management of time is also a
concern. Collaboration and communication was joint
third, alongside accurate project cost and timeline
forecasting (13%); both are key to the PM function, so
efforts to overcome them should prove transformative
to its performance.
Processes for Profitability
Digitalisation could help companies boost their profitability, the highest priority for many A&E firms
in the coming years.
A fifth of A&E firms’ financial leaders cite ‘increasing
profitability’ as the greatest challenge they will face in
the next three years.
The top three initiatives planned to address these
challenges in the next three years are developing a PM
discipline or a centre of excellence/developing internal
PM best practices (23%), improving project information
management processes (12%), and more clearly
defining responsibilities for project management,
business development, and design (10%).
One reason could be that architectural, engineering
and design firms have traditionally been people-heavy
businesses. The high costs of investment in staff, office
space and equipment made increasing profitability
more difficult than in other sectors.
Improving Cash Flow
When asked what changes to current financial
processes would increase the profitability of the
firm, the most popular response from CFOs is ‘clients
paying without need for chasing’ (57%). Meanwhile,
both heads of finance (49%) and – at 56% – COOs
would like to see invoicing of fixed price contracts
sooner and the CEO advocating for automating the
month-end process (61%).
If we look at other industries, the CFO is often
presented as the technology evangelist that pushes
for automation and helms strategic discussions to help
the CEO steer the business correctly. But these results
imply the CFO in the A&E industry may focus more
on external factors to increase cashflow – not in lieu
of month-end automation, but potentially as a higher
priority in the short term.
Overall, respondents name the top three initiatives
to address financial challenges in the next three years
as business process improvement (21%), organis
ational changes or realignments (19%), and better
forecasting (13%).

Changes to Current Financial Processes that would Increase

the Profitability of the Firm, by Job Role

Automating month end Clients paying without Invoicing fixed price

process need for chasing contracts sooner

CEO 61% 46% 49%

Managing
29% 57% 39%
director

CFO 24% 57% 51%

COO 17% 38% 56%

Deltek | Clarity Architecture & Engineering Industry Report 21

For the time being, the survey shows that accounting
and finance are still the most reliant on spreadsheets
and manual data entry. Interestingly, Swedish firms
are most likely to rely on manual data entry and
spreadsheets, despite claiming the highest level of
understanding of technology trends.
The results indicate that finance has yet to embrace the
digitalisation of its systems and may still be relying on
inefficient, manual processes.
“These processes can be time-consuming, expensive
and prone to human error,” says Owen O’Leary, director
of finance at international engineering firm ByrneLooby.
“While automation can mean a greater upfront
investment to ensure the system is implemented
correctly and is aligned with the company’s data, the
long-term benefits it can deliver far outweigh this.”
Indeed, the type of structured data captured in
spreadsheets is where organisations could see the
biggest short-term impact of technologies such as AI
and IoT, because these can enhance the quality and
reliability of the data.
The Efficiency Equilibrium
High-level decision-makers must interact with employees across the company
to seize the opportunities of emerging technologies.

Perhaps surprisingly, the survey showed that more
respondents frequently engage with the C-Suite
than any other group (44%). No other job roles come
close to competing with this figure – second on the
list is engineer at 10%.
However, as company size increases, this trend
weakens. While this is perhaps not surprising, the
proportion of the result does imply that leaders
in the A&E sector are truly passionate and hands-on.

The C-suite are Most Frequently Interacted with Job Role

Percentage of respondents ranking most interacted with job roles 'first'

C-suite 44%

Engineer 10%

Head of IT
(or equivalent)
9%

Supervisor 8%

Marketing 8%

Head of finance
(or equivalent)
7%

Business development 6%

Architect 5%

HR 2%

Estimator 2%

Deltek | Clarity Architecture & Engineering Industry Report 23

It is worth noting that CEOs, CFOs and COOs together
comprise 38% of those questioned, so there may be
room for potential bias. However, the question remains:
should business leaders be strategic navigators of the
boardroom, shielded from day-to-day operations? Or
should they be on the ground with their workforce?
Which method is the most effective?
Engagement with the C-suite Decreases as Company Size Increases
60%
20-100
Pace of Change
A&E senior leaders’ visibility – and accessibility – among
the workforce could also be a way of staying on top
of the pace of change. A working understanding of
software, machines and in-house skills helps executives
to more accurately plan and forecast for the future and
identify gaps that need plugging – meaning the business
stays agile and competitive.
24 Deltek | Clarity Architecture & Engineering Industry Report
While it falls on senior leadership to steer the business
in the right strategic direction, maintaining relationships
and interacting with employees is crucial. Not only does
this encourage a team approach to problem-solving,
with employees feeling their opinions are valued, but it
enables business leaders to see where challenges and
opportunities exist from the ground up.
39%
22% 2
101-500 501-5000+
Ultimately, a greater understanding of the firm’s day-
to-day operations leads to better informed decisions in
the boardroom. And with this knowledge, organisations
can make the optimal choices when it comes to
investments in technology.
From the Top
There are undoubtedly some formidable challenges
facing the A&E industry in the future, as we’ve seen
throughout this report.
According to the C-Suite, the trends that present the
greatest challenges for project management over the
next five years will involve managing commoditised
services (16%), managing highly bespoke services (14%),
and the ‘increasing complexity of projects’ (12%).
Interestingly, there is a difference of opinion at the top:
the CEOs questioned are clearly concerned with the
increasing complexity of projects (20%), while the
CFOs identified managing highly bespoke or
commoditised services (19%) as the top challenge.
While this is likely reflective of their different
responsibilities, it also highlights the need for
collaboration within firms to develop the right
initiatives to address their biggest challenges.

Trends that Present Greatest Challenges

for Project Management in Next Five Years

Increasing complexity Managing commoditised Managing highly

of projects services bespoke services

CEO 20% 10% 8%

Managing
14% 24% 14%
director

CFO 8% 19% 19%

COO 15% 19% 8%

Deltek | Clarity Architecture & Engineering Industry Report 25

How can senior leadership ensure they are working
towards solving these problems? Once again,
digitalisation will be key, embracing technologies like AI
and automation to reduce manual processes and ease
the management burden.
But while technology can be a saviour, A&E leaders
must start thinking about how they can apply it to
achieve their own business goals.
Listing innovations like AI, machine learning, robotic
process automation (RPA) and natural language
processing, Bret Tushaus, vice president of product
management at Deltek, notes that “the technologies
are not yet represented as a mainstream technology
specifically within A&E, so it can be difficult for those in
this industry to understand how they can be applied on
a day-to-day basis. If we always look at AI as something
that only Google can do, and isn’t really relevant to the
construction or architecture industry, it’s going to be that
much more difficult for the industry to embrace it and
understand how it can create benefits for us,” he says.
“What’s the recommendation engine for the architecture
industry? We see AI used in a way that makes a lot of
sense to us in our everyday life – we need to be able to
represent that in an industry-specific way as well.”
SECTION THREE

Business
Influence
A&E firms must agree on a project’s key goals at the outset, before achieving them
through effective collaboration and integration.

Key Data Points from the Survey

• There is a disparity between firms’ key objectives at the outset of a project
and their ultimate measures of success
• While ‘sustainability/resilience of the build’ and ‘environmental impact’ are still
top of the list, ‘solving big problems’ is seen as one of the strongest determining
factors of a successful project
• Although 39% of organisations claim to be ‘connected’, only 2% describe their
firms as ‘completely integrated’

12% 2% 19%
cited ‘solving big describe their firms as cited “environmental
problems’ as one ‘completely integrated’ impact” as the top
of the strongest priorities for A&E
determining factors firms when starting
of a successful project out on a project
Art and Science
While definitions of success vary, there is one common factor: architects
and engineers must leverage each other’s strengths.

A criticism sometimes levelled at architects is that they is much more alignment between art and science
are too creatively led and fail to consider the practicality than expected. In fact, it could be the hybrid of these
of a project. However, our findings show that there ‘opposite’ approaches that is key to a successful project.

Focus on Sustainability
When embarking on any new project, it’s common
practice to have certain objectives and goals in mind.
However, unforeseen factors can affect plans along the
way, meaning certain goals can’t be met or the project
gets derailed altogether.
The survey shows that the top priorities for A&E firms
when starting out on a project are environmental
impact (19%), the sustainability/resilience of the build
(15%) and social impact (14%).

Sustainability Concerns are a Priority When Starting Out on a Project

Top three priorities ranked 'first' when starting out on a project

19%

15%
14%

Environmental impact Sustainability/resilience Social impact

of the build

28 Deltek | Clarity Architecture & Engineering Industry Report

Drilling down further, architects want sustainability/
resilience of the build (50%), while engineers are looking
most for environmental impact (47%). In general, the
goals of both groups are aligned when embarking on a
new project.
specialising in landscape architecture and urban design.
“I think if we’re not there as designers, then we are
working against ourselves and we’re working against our
community. We need to embrace sustainability as a
fundamental principle.”

The focus on sustainability is understandable and in
keeping with the continued emphasis on greener design
around the globe.
“Most of our work is on projects that are not just
socially beautiful places that create the right kind of
interactions, but are sustainable,” says Chris Razzell,
director at ASPECT Studios, an Australian design firm
However, when asked to consider the determining
factors of a project’s success, the respondents indicate
a shift in priorities. While ‘sustainability/ resilience of the
build’ (15%) and ‘environmental impact’ (14%) are still
top of the list, ‘solving big problems’ (12%) is cited as one
of the strongest determining factors of a successful
project – something not identified as a priority at the
outset of the project.

‘Solving Big Problems' is a Defining Characteristic of Successful Projects

Strongest three determining factors of the success of a project, ranked 'first'

15%
14%

12%

Sustainability/resilience Environmental impact Solving big problems

of the build

The findings generate more questions. Given the
importance placed on it retrospectively, why is problem
solving not a consideration or priority at the beginning
of the process?
Of course, not every problem can be anticipated. And in
other cases, teams are solving challenges or navigating
roadblocks that have previously stumped the industry,
sometimes leading to groundbreaking outcomes. They
are taking risks and reaping the rewards.
It is understandable, therefore, that with the benefit of
hindsight, respondents indicate a degree of satisfaction
at overcoming such hurdles.

Deltek | Clarity Architecture & Engineering Industry Report 29

Regional Variations
There are some interesting regional variations within
the results. Looking at the most common project
priorities, for instance, New Zealand places the greatest
importance on profitability and cashflow being a clear
determining factor for success when looking back on a
project (54%). Still, it’s not something they consider a
priority at the outset (32%).
Singapore grades operational efficiency – the use of
technology and data – the lowest of all the countries
at the beginning of a project (2%), but this increases
significantly as a factor for success by the end (26%).
We see the biggest drop regarding the importance of
social impact in Norway, with 38% of firms considering
it a priority when kicking off a new project, but only 8%
feeling the same way at the end of the process.
Germany is the most consistent of the countries
surveyed, with the least fluctuation across the board
between their priorities when starting out and their
post-project opinions.
Determining the Success of a Project
There are of course many ways by which the
success of a project can be judged. However, in any
successful project, it is crucial that architects and
engineers leverage each other’s strengths, rather
than disregarding them. For this, collaboration and
cooperation are important, as we discuss elsewhere in
this report.
Each party will have their own concerns and priorities,
but project work is a collaborative process that involves
working as a team on problem solving. This means the
architect’s initial concept should be treated as a first
draft of an idea that can evolve in line with the project.

Architects and Engineers want the Same Thing when Embarking on a Project
Top priorities when starting out on a project by a ranking of 1, 2 and 3

Industry approval 25%

(winning awards) 22%

Building effective partner- 48%

ships/industry collaboration 43%

Sustainability/resilience 50%
of the build 45%

39%
Environmental impact
47%

34%
Social impact
33%

Financial: profitability 33%

and cash flow 38%

35%
Solving big problems
32%

Creativity/avant- 26%
garde thinking 27%

Operational efficiency, i.e. 10%

use of technology, data 14%

Architecture or A/E Engineering or E/A

Collaborate to Dominate
A significant proportion of companies encounter problems with cross-functional cooperation,
which could prove an obstacle in the modern working environment.
Modern organisations spend more time collaborating
than ever before and have a more distributed
workforce. It has therefore never been more important
for employees to communicate and cooperate
seamlessly with team members, whether in the office,
on-site or on-the-go.
32%
of respondents believe ‘fulfilling
client demands’ is a key barrier to
change within their organisation
32 Deltek | Clarity Architecture & Engineering Industry Report
However, 20% of A&E respondents maintain that the
biggest barrier to success is ‘little cross-functional
cooperation’. This is despite ‘ample cross-functional
cooperation’ being cited by almost the same number
(21%) as a key facilitator for success.
The second biggest barrier also indicates a problem
with collaboration: 17% of firms are concerned about
informal processes, insufficient rigour and consistency
in executing processes, insufficient knowledge transfer
from project to project and weak project monitoring.
Elsewhere, 32% of respondents believe that ‘fulfilling
client demands’ is a key barrier to change within their
organisation.
Collaboration and High Performance
In addition, while 39% of organisations claim to be
‘connected’ – where there is some collaboration
and communication between departments but
only for large-scale or company-wide matters –
only 2% of respondents describe their firms as
‘completely integrated’.
Conversely, the level of collaboration within the
workforce can be linked to high performance and
success rates. The top three facilitators for success
are strong project monitoring (24%), ample cross-
functional cooperation (21%), and sufficient
nowledge transfer from project to project (18%).

Top Factors to Success and Meeting KPIs

Level of collaboration can make or break high performance and success rates

Top Three Facilitators to Success/Meeting KPIs

24%
21%
18%

Strong project monitoring Ample cross-functional Sufficient knowledge transfer

cooperation from project to project

Top Three Barriers to Success/Meeting KPIs

20%
17%
15%

Little cross-functional Informal processes/ Conservative company

cooperation insufficient rigour and culture
consistency in process
execution/ Insufficient
knowledge transfer from
project to project / weak
project monitoring

Deltek | Clarity Architecture & Engineering Industry Report 33

There are several theories as to why collaboration levels
are still relatively low among the A&E industry. It could
be a lack of knowledge-sharing between the different
partners working on a project. Or it might be that many
in the industry think of collaboration only within the
context of BIM – but the potential for collaboration goes
beyond this.
Information exchange during the concept and feasibility
stages is essential to a successful project. It enables
designers to have a positive influence on the design,
which can benefit the project in numerous ways. For
example, early in the process it is possible to take
environmental factors into consideration, such as
improvements in carbon reduction or energy usage.
Norway has the Highest Level of Collaboration than Any Other Region
% of respondents rating their firms ‘somewhat/completely integrated', by country
Norway
Germany
Australia
Denmark
Sweden
UK
Singapore
NZ
34 Deltek | Clarity Architecture & Engineering Industry Report
Successfully implementing change, or embarking
on any project, requires a significant degree of
collaboration and cooperation. The good news is
that improvements are now slowly being made, with
some regions setting an example to others when it
comes to collaborative working. Norway is the most
collaborative country surveyed, with 58% saying
their organisations are somewhat or completely
integrated, leaving the UK (32%), New Zealand (28%)
and Singapore (28%) trailing behind.
In this new world of remote and flexible working,
implementing effective collaboration tools and
processes is more important than ever.
58%
43%
37% 37%
36%
36%
32%
28%
28%
SECTION FOUR

Benchmarking and KPIs

While most project managers see competiting priorities as their biggest challenge,
there are significant variations across key performance indicators.

Key Data Points from the Survey

• The KPIs most measured by firms are net revenue and profitability
• Denmark takes the lead, tracking an average of 74% of the listed KPIs
• Strong project monitoring is the greatest help in meeting KPIs

92% 62% 73%

measured net revenue of respondents ranking of projects are
and profitability as “competing priorities” on or under budget
main KPIs as one of their top three
challenges
Monitoring KPIs
While benchmarks are important for seeing how firms measure up to their peers and position themselves
in the industry, KPIs provide invaluable targets to help them improve their performance.

Most Measured KPIs by Firms

Profitability 92%

Net revenue 92%

Multipliers 80%

Average collection period (days

74%
sales outstanding) for A/R Aged

Average billing rate 71%

On-time delivery 70%

Effective billing rate 68%

Win rate or capture rate 64%

Utilisation rates 63%

Estimate to complete 59%

Employee turnover 57%

Cost variance 54%

Client satisfaction 54%

Firms from different regions provided varying results
on how they are performing against specific KPIs.
The list of KPIs the respondents track is extensive.
Those most measured by firms are net revenue and
profitability (both at 92%), followed by multipliers
(80%) and average collection period (74%). The least
tracked was schedule variance (36%) and earned value
management (33%).
The survey also uncovered some interesting regional
variations. New Zealand tracks the average billing rate
(90%) more than any other country, for example.
Denmark takes the lead in tracking the listed KPIs,
with an average of 74%.
Across the board, the most frequently ranked
challenge for project managers in the next three years
is ‘competing priorities including project management,
design, business development, etc.’ with 62% of
respondents ranking this as one of their top three
challenges, on average.
US respondents face the same challenges with project
management, with 55% of respondents identifying
competing priorities as one of the top three challenges.

36 Deltek | Clarity Architecture & Engineering Industry Report

 Business Performance Around the World
Sweden Denmark Norway Germany Australia NZ Singapore UK
Average
billing rate
74% 88% 62% 56% 73% 90% 64% 70%

Average collection
period (days
sales outstanding)
for A/R Aged 74% 84% 78% 68% 83% 78% 62% 71%

Client satisfaction
64% 70% 36% 49% 53% 60% 48% 55%

Cost variance
60% 62% 36% 71% 57% 48% 48% 50%

Earned value
management 60% 30% 42% 36% 30% 32% 26% 27%

Effective billing
rate
78% 86% 74% 71% 59% 72% 48% 67%

Employee
turnover
66% 82% 56% 63% 48% 56% 44% 53%

Estimate at
complete
44% 60% 60% 52% 46% 58% 52% 54%

Estimate to
complete
50% 70% 70% 51% 53% 70% 44% 63%

Multipliers
86% 88% 68% 81% 76% 80% 74% 81%

Net revenue
88% 98% 88% 85% 89% 94% 96% 95%

On-time delivery
78% 84% 82% 80% 59% 76% 54% 63%

Profitability
84% 96% 96% 83% 89% 94% 92% 96%

Schedule variance
42% 24% 22% 48% 38% 34% 32% 38%

Utilisation rates
64% 84% 62% 65% 65% 64% 64% 55%

Win rate or
capture rate
86% 72% 44% 69% 55% 68% 56% 67%

Deltek | Clarity Architecture & Engineering Industry Report 37

Benchmarks
There are also some interesting comparisons to be
made from the results of the benchmarking questions
across geographies. It is notable that firms in Australia,
for instance, have a low utilisation rate compared
to their counterparts in other regions (58%), yet have
such a competitive proportion of projects on or under
budget (73%).
However, while Danish firms have the highest
utilisation rate, this doesn’t seem to equate to stronger
performance of projects on or under budget – both
stand at 67%.
When listing their biggest barriers to success, 20%
of firms reported that a lack of cross-functional
cooperation holds them back. Informal processes,
insufficient rigour and consistency in executing
processes, insufficient knowledge transfer from project
to project and weak project monitoring are a concern
for 17% of firms, while 15% consider a conservative
company culture their biggest hurdle.

Top Factors to Success and Meeting KPIs

Level of collaboration can make or break high performance and success rates

Top Three Barriers to Success/Meeting KPIs

20%
17%
15%

Little cross-functional Informal processes/ Conservative company

cooperation insufficient rigour and culture
consistency in process
execution/ Insufficient
knowledge transfer from
project to project / weak
project monitoring

38 Deltek | Clarity Architecture & Engineering Industry Report

 Business Performance Around the World

Average Average Percentage of projects Employee

utilisation rate overhead rate on/under budget turnover rate

UK 58% 125% 71% 12%

North America 60% 154% 71% 13%

Sweden 65% 128% 74% 12%

Singapore 65% 100% 70% 11%

New Zealand 65% 100% 67% 10%

Norway 63% 150% 64% 11%

Germany 60% 140% 73% 14%

Denmark 67% 100% 67% 11%

Australia 58% 100% 73% 12%

Deltek | Clarity Architecture & Engineering Industry Report 39

Top three ‘action points’ to improve profitability
1. Use technology to drive efficiencies within The study has also revealed a difference in how
processes as much as possible, removing human small and mid-size companies and enterprise firms
effort. view technological change – or disruption – to their
2. Finding new revenue streams. Where automation organisations. But with the right technology solutions,
has freed employees from repetitive, manual there is an opportunity for any firm, regardless of its size,
tasks – or merely ‘keeping the lights on’ – they can to close that gap and tap into new revenue streams.
now devote their time and skills to other revenue-
generating or value-adding activities.
3. Think long-term. Digital transformation is an iterative
process rather than a big bang implementation.
You will need to incorporate the cost of technology,
training, implementation and day-to-day operation
of activity. While short-term returns may not be
immediately obvious, eventually the benefits of
investing in technology will have a positive impact
across many areas of the business. Failing to invest
can put firms at a disadvantage.
Conclusion
Digital transformation is challenging, but if A&E firms are to grasp the opportunities
ahead, they must embrace technology.
The world is changing rapidly. Technological innovation
and modern working practices are fuelling disruption
across many industries.
During this period of uncertainty, firms may naturally
feel the need for caution, or to step back from investing
in the future. But this report shows that if A&E firms
across EMEA and APAC want to reap the rewards, they
must continue to innovate.
Transformation involves changing workplace practices
and culture as much as implementing new technology.
Key takeaways
• 40% of A&E firms envision themselves as being
advanced in their digital transformation efforts
in five years’ time. To achieve this goal, they must
rethink their relationship with digital technologies
in the long-term, or risk falling behind.
While there are certain industry-specific challenges, as
we have highlighted in this report, there remains huge
potential to leverage technology for growth.
Firms that prioritise digital transformation, focus on
the financial fundamentals and leverage business
intelligence to clearly understand the state of their
business will be in the best position to continue to drive
their business forward.
• While there is a link between the level of
understanding of key technology trends and their
value to the business, a shortage of quality data
is currently impeding technology adoption in the
A&E industry. This too needs be overcome for
organisations to advance on their digital journeys.
About Deltek
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businesses for 34 years.

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Architecture &
Engineering Firms
Learn more about the Deltek Clarity Architecture &
Engineering Industry Study at deltek.com/clarity-emea
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