Digital transformation is proving to be a difficult challenge for design firms across Australia, Europe and the Asia Pacific, the latest survey has found.

In the latest Deltek Clarity report prepared in conjunction with B2B marketing agency Raconteur, enterprise software and solution provider Deltek surveyed 600 respondents from architecture and engineering firms across Australia, New Zealand, Germany, United Kingdom, Norway, Sweden, Denmark and Singapore.

It found that firms recognised the importance of digital transformation but were experiencing challenge in deploying this throughout their organisation.

All up, 84 percent of respondents indicated that the Internet of Things was ‘very important’ to their business.

This was followed by geolocation (83 percent), big data (69 percent), artificial intelligence (61 percent) and data science (60 percent).

Moreover, 89 percent felt they understood their firm’s digital transformation strategy whilst 92 percent expect to at least have technology related goals, objectives and actions which align with their broader business goals within five years.

As things stand, however, progress is limited.

Of those firms surveyed, almost six in ten (59 percent) view their current digital maturity as either ‘nascent’ (9 percent) or ‘exploratory’ (50 percent).

This means that either there is no alignment of digital IT initiatives to company strategy or there is a recognition of the need for digital transformation but no clear strategy in place and execution of digital initiatives is limited to ad-hoc projects.

Moreover, only one percent of architecture and engineering firms described themselves as ‘advanced’ with their digital maturity – a point at which digital transformation is a strategic focus at the executive level, there is a culture of innovation and digital initiatives are used to boost revenue, improve customer experience and expand operating margins.

According to the report, common barriers to digital transformation and overall change within firms involved the speed of technological advancement, fulfilling client demands and change management.

Initiatives to help firms tackle change involve hiring staff or acquiring companies with the necessary skills which need to be acquired, identifying and developing technology subject matter experts and identifying champions to lead initiatives and change.

The survey also found that:

  • 21 percent of financial leaders within A&E firms cited increasing profitability as one of their top challenges over the next three years
  • Collaboration levels within architecture and engineering firms are low. Only 2 percent of respondents believe their firms are ‘completely integrated’ whilst only 39 percent more say they are ‘connected’ (some collaboration and communication between departments but only for larger-scale projects).
  • Compared with their international counterparts, Australian design firms are less active in benchmarking firm performance. Only 48 percent of Australian firms surveyed measured employee turnover. This compare with 82 percent in Denmark, 66 percent in Sweden and 63 percent in Germany. Only 55 percent of Australian firms measure their win rate or capture rate. This compares with between 86 percent and 67 percent for Sweden, Denmark, Germany, New Zealand and the UK.

In the report, Deltek said firms are starting to embrace technology to help secure a competitive advantage but are experiencing challenges in doing so.

“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,” Deltek stated in the report.

“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.”

Deltek says the importance of digital transformation should not be underestimated.

“Senior business leaders face a dilemma as to the best path to profitability, and how technology can best enable that journey,” the company said in the report.

“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.”

The survey was conducted between February 26 and March 24 and does not reflect the full impact of COVID-19.