62% of Firms Expect Artificial Intelligence to Improve Their Operational Efficiency
Herndon, Va. – May 7, 2024 – Deltek, the leading global provider of software and solutions for project-based businesses, has unveiled the 45th annual Deltek Clarity Architecture & Engineering Industry Study. The results, based on a survey of more than 650 A&E firms of all sizes in the United States and Canada, deliver industry-specific key performance indicators, identify key challenges impacting the industry, highlight bright spots and forecast future trends.
Produced in collaboration with ACEC, ACEC Canada, AIA and SMPS, the Deltek Clarity study serves as a benchmarking tool to help firms understand the state of the A&E industry and provides detailed insight and analysis into technology trends, business development, financial statements, project management and human capital management.
The latest report shows that firms effectively navigated economic uncertainties and rising costs to achieve healthy, although essentially flat, operating profit margins year-over-year. Reaching that steady state, relative to the volatility firms experienced in the past few years, enabled A&E leaders to focus on driving operational efficiencies, staff utilization and exploring technology to provide an additional edge.
Key findings from the report include:
-
Win rates are stable, and firms are cautiously optimistic about growth, but balancing that with decreasing proposal value. Firms project nearly 11% net revenue growth in 2023, up slightly from 10.2% last year. The number of proposals submitted and awarded also grew year-over-year giving firms an optimistic outlook for the year ahead, although they are still facing challenges. Firms cited finding time to nurture client relationships, increased competition and identifying new prospects as their main business development challenges.
-
Use of AI-powered tools is gradually increasing across firms of all sizes, but there is an urgent need for targeted educational opportunities and support for employees to see benefits from this technology. 62% of firms expect artificial intelligence to improve their operational efficiency, and firms are already leveraging generative AI for marketing and proposal creation (24%), data summarization (17%), 3D modeling and rendering (15%) and data analysis (14%). However, there is still a need to refine internal processes and invest time into providing education, and working with experts to prioritize which types of emerging technology will be most impactful, to yield any potential cost savings and operational improvements.
-
Finding a balance between cost containment and investment to enhance project performance is paying off. With an emphasis on training project managers and providing better tools to improve project delivery, firms report that 69% of A&E projects are on or under budget. However, staffing shortages are presenting challenges and competing priorities continue to present challenges, especially for project delivery with 40% of projects behind schedule.
-
Firms are focusing on leveraging existing workforces to their fullest extent to pursue operational efficiencies and improve cost-effectiveness. Firms are adjusting to the “new normal” of reduced workforce sizes as post-pandemic voluntary turnover has stabilized and focusing on how to do more with less when it comes to managing workloads with existing teams. Firms with formal career development planning increased across all sizes and increasingly expanded their focus to all employees, although professional development remains one of firms’ top challenges.
“Firms continue to have an optimistic outlook. The A&E industry had a fairly flat but stable year in terms of financial performance in 2023 and is continuing to see revenue growth year over year, which was welcome after several years of economic volatility. It’s great to see firms continue to focus on upskilling existing talent and strategically investing in technology like AI to improve efficiency,” said Megan Miller, Director of Product Marketing at Deltek. “For the year ahead, firms should continue to focus on engaging employees, and invest resources into education and expertise to identify which emerging tech tools to take advantage of and how best to deploy them.”
The full report is now available to download. To learn more about this industry market research, join the Deltek Clarity Architecture & Engineering webinar on May 9.
About Deltek
Better software means better projects. Deltek is the leading global provider of enterprise software and information solutions for project-based businesses. More than 30,000 organizations and millions of users in over 80 countries around the world rely on Deltek for superior levels of project intelligence, management, and collaboration. Our industry-focused expertise powers project success by helping firms achieve performance that maximizes productivity and revenue. www.deltek.com