Introduction & Part I: Streamline systems to control costs
How AEC can succeed with digital: Introduction
The COVID-19 pandemic has brought global business to a halt, and the architecture, engineering, and construction sector (AEC) is no exception.
To find out more about how mid-market Architecture, Engineering & Construction (AEC) companies can get more competitive through their digital strategies or how to streamline your company’s systems to control costs, please visit our AEC Knowledge Centre.
Our priorities, of course, should be to stay healthy and do everything we can to help our businesses weather the storm. But we also believe it’s healthy to look beyond the crisis.
Believe it or not, we’re optimistic. Despite all the uncertainty in 2019, mid-market AEC businesses enjoyed overall growth. And before the interruption of the pandemic, we saw strong indications that growth would have continued into 2020.
The worrisome trend in AEC was the intensifying pressures on the bottom line. A Deloitte report claimed that profitability would be threatened by intensifying competition, supply-chain constraints arising from tariffs, and talent shortages.
In other words, in recovering from the crisis, AEC will face the same pressures it always had, only more so.
There isn’t much any mid-market AEC company can do about all of these problems. But there is a straightforward way to make your business more competitive: streamlining your systems with a comprehensive digital roadmap.
Two things you can be sure of: first, that the recovery is going to be long and difficult; and second, that IT is central to navigating it. The companies who get IT right will see great opportunities. Those who hesitate are in danger of being left behind.
Over the next few weeks, we’ll explore how AEC can use digital strategies to improve the bottom line. Please feel free to get in touch with questions and comments; we’re always up for a low-pressure chat. In the meantime, we hope you’re staying healthy and productive.
How AEC can succeed with digital
Part I: Streamline systems to control costs
First and foremost, mid-market AEC companies must streamline their systems to improve the bottom line. Here are three places to start.
Project management. It’s a no-brainer: project management is at the core of the AEC industry, and you reduce costs by getting better at planning, executing and managing. In our experience, this is often at heart a reporting issue, a company unable to plan and execute well because it lacks access to straightforward, timely information on scheduling or pricing.
Payment systems. In the AEC sector, we often see inefficiencies in payment systems that drive up cost. For example, a site manager under deadline pressure often deals directly with suppliers, securing a good deal and a quick turnaround. But then the delivery driver can’t find the site. Or the paperwork is inaccurate or lost. Or nobody is quite sure how the delivery fits in with the schedule. Everybody’s doing their best, but the lack of a simple, flexible system creates hidden admin costs, not to mention a lot of frustration all around.
Health and Safety. Many mid-market firms see H&S as a kind of necessary evil. But it’s an excellent idea to reconsider your H&S systems when looking to control costs. It’s critical to have clear, user-friendly processes, systems, and technology for a number of reasons:
- This may seem obvious, but the right systems make it easier to ensure that the staff has the necessary training and that appropriate safety equipment is onsite.
- Chain-of-command. Streamlined systems ensure that all activities are properly authorised and managed.
- Risk mitigation. Again, the primary goal is safety. But at the same time you’re reducing liability risks, and with readily attainable documentation, the risk of fines.
In terms of specific software, much of the AEC industry runs on COINS, Netsuite and SAP. These may not be the best packages for a particular company. Or they’re not used well, so they don’t deliver the promised efficiencies. Either way, don’t assume you’ll have to start again from scratch. The idea is to take a careful look at your company and find the inefficiencies. Look for ways to tweak or repair before letting a salesperson talk you into scorched earth.
If you have questions about how to streamline your AEC company’s systems to control costs—or any questions at all about how mid-market AEC companies can get more competitive through their digital strategies—feel free to get in touch. You’re always welcome to contact us for an informal chat.
In the meantime, keep your eyes out for our next AEC post: Getting onsite IT right. If you would like to access the full series sign up here.