The construction landscape is changing fast as companies of every size rush to keep up with shifting trends in customer tastes and government regulations. Alongside increased competition in a resurgent construction industry, these factors have spurred many construction firms to bring their engineering and architectural resources in-house.
The rules instituted in 2012 increased the total worth of businesses that could still qualify as "small." As a result, more organizations are able to compete for government contracts than ever before.
If you are an architect at a mid-sized construction firm, you benefit from uncommonly close relationships with the project managers who eventually executes your work. That tight-knit relationship allows you to deliver a strong and differentiated product to customers, but it doesn't mean your life is without stress. Several trends are poised to impact how architects and engineers at midsize firms do business, and the coming years will bring even more change.
Look out for these pending market shifts to stay ahead of the curve.
The rise of in-house architecture and engineering departments is one sign of growing consolidation throughout the industry, but it's just a single part of a larger trend. In the next few years, there will probably be even more consolidation as organizations grow larger to better compete in an increasingly crowded market.
A litany of issues contribute to the trend toward consolidation, but Architectural Record highlighted a single factor that's motivating a high number of partnerships: growth. Small firms simply have difficulty competing in a market where competitors who have already gone through a merger can offer a more comprehensive solution for clients.
At the same time, many small to mid-sized architecture and engineering firms are grappling with the lack of a clear succession plan in their current organizational structure. These organizations don't have the recruiting muscle that larger firms do, and may have difficulty attracting the type of managerial talent required to stay competitive. By partnering with a larger firm, these smaller companies gain access to critical organizational resources and potentially increase their capability to meet with bigger clients.
All of this means that architects and engineers at mid-sized firms should remain conscious of the potential for mergers down the line as their current organization adjusts to modern conditions.
Design-Build Gains More Steam
One of the other reasons for mass consolidation is the rise of design-build projects in which a single firm handles every piece of the construction process. These efforts are likely to become even more popular in the near future because they offer sizable efficiency gains when compared to traditional models.
In a study of design-build processes for future infrastructure work, the U.S. Department of Transportation discovered that these systems were effective at cutting down the total time spent on a project. They also noted that design/build may result in increased cost efficiency and had no negative impact on overall project quality.
Many projects can benefit from the perks identified by the DOT study––possibly driving increased business to firms that offer a cohesive design-build pipeline for future projects.
Increased Competition for Government Projects
Since 2012, competition for government contracts has been fiercer than ever before.
Government agencies have to give a portion of their contract work to organizations that qualify as small businesses. The rules instituted in 2012 increased the total worth of businesses that could still qualify as "small." As a result, more organizations are able to compete for government contracts than ever before. This makes it more important than ever for architects and engineers to work closely with the contracting elements at their firms to create projects that can be executed within a tight budget and timeline.
Technology Comes to the Fore
Computer-based systems have been a crucial part of architectural and engineering workflows for years, and technology solutions are rapidly becoming a standard for other parts of the construction industry as well. Particularly in design-build scenarios, cloud-based communication systems are a crucial tool that keep all the members of a construction firm on the same page.
Countless issues that arise on construction sites require input from an engineer or architect close to the project. By integrating modern technology solutions into a project, a firm can get feedback quickly and maintain a digital paper trail that protects them from potential legal action. Firms of all sizes can benefit from increased technological integration.