Insight Blog

Architecture | Engineering | Construction: Strategic Initiatives

The A/E/C industry is stabilizing itself and firms are focused on advancing themselves and enhancing their growth. While the industry will continue to see mergers and acquisitions, joint ventures and public - private partnerships, other new initiatives are gaining momentum including: technological innovation, alternative project delivery methods and strategic business development (BD) practices.

Helbling's clients are involved in diverse geographic and vertical markets with each having their own dynamics and goals. A similarity among them is that they all took a proactive approach during the past few years by analyzing their processes and procedures to streamline operations; focusing on and expanding their niche markets; and integrating advanced technologies into their services. All of these initiatives are now paying off, increasing their level of sophistication and strengthening their positions in the marketplace.

Strengthening competitive advantage through innovation.

Advancing technologies are continually encouraging A/E/C firms to consider new ways of improving and streamlining the design and construction process. Many companies believe in the potential of technology to increase their revenues and to differentiate themselves in the marketplace. Some of the advancements that have taken center stage have been in green building, Building Information Modeling (BIM) and new software applications.

Much innovation in A/E/C industry targets green building due to owners wanting to integrate sustainability and energy efficiency into most (if not all) of their new construction and renovation projects. Entities that are unable to offer these approaches to owners, especially to healthcare and higher education institutions, are (and will remain at) an extreme disadvantage. Healthcare and higher education organizations are particularly performance-driven and are increasingly demanding green construction and LEED-certified projects.

New technologies also continue to shape the way projects are designed and delivered. Pressures continually mount to keep project costs down and to increase operational efficiency which is why BIM applications have gained much traction in recent years.

With tablets being adopted quickly throughout the industry, a new generation of applications is emerging. Some of these applications are being designed by construction entities using in-house project teams and by partnering with vendors. Mid-sized firms say there is a need and a desire to build applications that fill gaps currently not served by enterprise vendors.

Offering alternative project delivery methods.

The companies who sustained themselves in recent years and who are now in growth modes adapted their services to meet the needs of their customers. Because the primary objectives of owners are maximizing their return on investment (ROI) and generating revenues as quickly as possible, new alternative project delivery methods have become very attractive in certain situations.

Integrated Project Delivery (IPD) is expanding its presence due to its reputation for providing an efficient construction management process. This method gathers architects, contractors, facilities staff and major subcontractors together early to easily provide "design-assist" services, mitigate potential problems and streamline the entire process.

Prefabrication and modularization, effective methods in Europe, are emerging concepts in the U. S. that are expected to accelerate due to owners wanting to shorten schedules, decrease costs and address the worsening labor shortage.

"Lean" methods caused a revolution in manufacturing many years ago and emerged in the A/E/C industry only in recent years. Lean construction is more focused on control, maximizing value and minimizing waste and is effective on certain types of complex projects.

Value-based contracting is a collaborative concept that offers a drastically different approach to projects. Instead of negotiations revolving around costs, they are based upon contractual performance-centered arrangements.

Improving business development practices.

Many companies are experiencing lower profit margins due to limited opportunities and increased competition. Because acquiring work has become a major challenge, organizations need to be adaptable, strategic and responsive. Therefore, firms are redefining their BD efforts and implementing practices that generate the best ROI.

A significant number of entities have increased the involvement of their principals, senior executives and owners in their BD while others now involve key operations and estimating personnel. Although these measures can be helpful, they are not comprehensive solutions to developing, building and nurturing relationships with new and long-term clients.

Organizations that have closely analyzed their BD processes have learned that, to achieve the greatest ROI, they have to selectively pursue projects that support the long-term goals of the company and provide the proper training and guidance to employees while clearly defining expectations and following through with accountability.

There are many positive trends in the A/E/C industry that are presenting opportunities for organizations to be innovative and proactive in their operations, project execution and BD. The companies who are most adaptable and progressive in their initiatives will experience the most success.