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How small AEC firms can conquer digital transformation

In Australia, the architecture, engineering, and construction (AEC) sector is essential for developing and maintaining infrastructure, such as roads, bridges, railways, airports, and public buildings.

In the past, the AEC sector has been viewed as somewhat of a digital laggard; today, however, digital transformation is a key conversation, especially as the adoption of AI picks up. Within the broad industry, it’s important to not forget the small or mid-size businesses (SMBs) who may not have the same resources as big companies to embark on their digital journey.

But that doesn’t make them less important. AEC SMBs in Australia are valuable because they bring specialisation into niche areas, local knowledge, and economic impact to their industry. They contribute to job creation, drive regional development by operating in smaller towns, and enhance industry resilience through their adaptability and community engagement.

Their role in fostering a diverse and competitive sector cannot be overstated. Steeped in tradition and legacy processes, they are changing rapidly and experiencing a rapid shift towards innovation. In fact, according to a recent survey, 25% of all SMBs in Australia are currently using AI, and 60% will adopt AI within the next two years.

Challenges to be addressed

While larger AEC firms have a significant advantage in implementing modern technology due to their greater resources, budgets, and dedicated IT departments, SMBs often encounter greater challenges in their digital journey. 

However, by thoroughly analysing the risks that could affect their digitisation efforts, SMBs can be better equipped to identify the most effective strategies for overcoming these obstacles. There are three key challenges that impact mid-sized AEC firms:

  • Investment efforts: SMBs typically operate with tighter budgets, compared to larger enterprises. Allocating funds for digital transformation initiatives may compete with other priorities, such as day-to-day operations, marketing, and employee salaries. Recent research from YouGov revealed alarming statistics: one in five Australian small businesses have exhausted their cash reserves, and nearly one in three owners are using personal funds to cover business expenses.
  • Legacy systems: Many small and medium-sized companies rely on outdated or inadequate technology infrastructure, which may require significant investment to upgrade or replace. Upgrading or replacing these legacy systems can demand substantial investment in terms of finances, time, and human resources.
  • Skills shortage: Recent changes in Australian skilled migration policies have brought attention to the skills shortage in the AEC industry. This challenge is underscored by data from Engineers Australia, indicating that overseas-born engineers accounted for 70% of the growth in the engineering labor force between 2016 and 2021. This shortage can pose a big recruitment challenge for AEC SMBs, as they might not be able to offer rewards that big companies do. 

The starting point

It is most likely that not all the AEC firms’ clients are prepared for the highest level of digital maturity. However, businesses must be prepared for any type of need to offer greater operational efficiencies and maintain competitiveness. But how can they do this?

  • Focus on recruiting talent

SMBs in the AEC industry need the right people in key roles to drive digitisation effectively.

Executive sponsorship, typically led by the C-suite, is essential for setting the vision, allocating resources, and ensuring alignment with business goals. Without this leadership, digital initiatives may fail.

Skilled project managers are also crucial for successful execution, ensuring initiatives stay on track and potential issues are addressed promptly. Collaboration with external delivery partners, such as vendors or consultants, can further accelerate the digitisation process by bringing in expertise and resources that SMBs may lack internally.

Additionally, SMEs should also prioritise recruiting other crucial roles. At Bentley Systems’ Illuminate event in May, Steven Coyle, mobility digital lead at Arcadis in Australia, underscored the importance of integrating data scientists into company frameworks. He also emphasised the value of exploring beyond traditional engineering roles to identify what works better to generate successful outcomes.

  • Changing how things are done

Changing processes can significantly benefit SMBs in the AEC industry as they embark on digitisation. Initially, it’s crucial to set up rules and processes to manage their digital applications properly. This situation helps to figure out which projects are most important and where to start.

Next, businesses must find ways to use their digital applications across different parts of the company, creating standards for how information is stored and organised to make it easy to find and use. 

Lastly, SMBs need to measure how well their digital efforts are working. They need to track things like project progress and effectiveness. By keeping an eye on these metrics, businesses can see what’s working well and what needs improvement, helping them make smarter decisions for the future.

  • Picking the right technology

SMBs can benefit from a strategic approach to digitisation. They can start by creating online spaces for storing and accessing project files, focusing first on new projects and gradually including older ones. This helps keep everything organised and accessible.

Exploring new design methods, such as using computer models and simulations, can improve efficiency and accuracy in project planning and execution. Trying these methods on new projects shows innovation and keeps up with industry trends.

Additionally, using pre-made parts and designs from suppliers can save time and streamline design processes. Establishing a shared library of these parts promotes collaboration across projects, making work faster and more consistent.

The importance of SMBs in AEC

The agility, innovation, and entrepreneurial spirit from SMBs are essential for fostering competition, driving innovation, and meeting diverse market needs within the AEC sector. Recognising their importance highlights the need for policies and support mechanisms that promote their growth, sustainability, and competitiveness. By fostering an environment conducive to SMB success, Australia can ensure a vibrant and resilient AEC sector that continues to drive economic growth and development for years to come.

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Rob Malkin

Rob Malkin

Rob Malkin is the Senior Regional Director of ANZ, Bentley Systems

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