Consulting-Specifying Engineer - August 2007 - (Page 46)

Management Report Change or die: Delivering value in a changing marketplace BY DENYS H. OBERMAN, CEO, Oberman Assocs., Irvine, Calif. dapt, innovate, grow. These mandates are driving change in every type of firm, whether the mission is assisting clients with new product development and introduction, supporting global expansion, or helping them respond to a changing regulatory environment. Engineering firms are no exception. Across industries and regions, owners’ needs and perspectives concerning value have evolved significantly in the past several years. For example, some of the key current business trends that are taxing traditional approaches are: • Globalization: Gone are the days when a firm could remain just a niche local or regional player. Global markets and globalization of the A “Engineering firms are challenged to keep up with clients, and they need to make fundamental changes in their business models.” supply chain are changing ownership, market strategies, business processes and economics in every industry. • Shorter project life cycles: Clients need to develop and bring projects to market faster to achieve competitive advantage, and realize return on investment. • Increasing sensitivity to costs: Global competition, industry consolidation and increased scrutiny of budgets have intensified demands for accountability. • Industry consolidation equals client consolidation: Like most industries, the AEC industry is experiencing high levels of mergers and acquisitions. This is resulting in fewer, larger clients with more complex demands. Engineering firms are challenged to keep up with their clients, and they need to make fundamental changes in their business models to assure their own sustainability. Less than a decade ago, most firms believed that if they delivered good technical design, and provided consistent delivery, their position with clients was secure. Now, owners are looking for cheaper, better and faster. Firms must respond by changing their identities and core competencies if they want to continue as valued service providers. Service offerings go well beyond design to planning, consulting and finance, and management services, and can include a total outsource proposition. Service offerings need to be continually reviewed and revamped, in cycles frequently as short at two to three years. In trying to meet these new challenges, fundamental business models of many engineering firms are under stress. Vertical as well as horizontal integration is required to align a firm’s delivery approach with the client’s business. Firms are having to address identity, ownership and capital structure, and even their culture to remain relevant. Engineering firms are seeing themselves supplanted by other types of firms who can demonstrate financial and other management skills. Financial and management consultants are replacing the consulting engineer at the head of the table as the valued adviser and manager of significant projects. The changes facing consulting engineers require a new look at leadership. The conservative, risk-averse engineer who has built a loyal, longstanding client base and staff now needs to look beyond the historical success formula and development a new leadership initiative. Many firms struggle to develop the skills in their organizations to provide leadership 46 Consulting-Specifying Engineer • AUGUST, 2007

Table of Contents Feed for the Digital Edition of Consulting-Specifying Engineer - August 2007

Contents M/E Roundtable Giants 100 Pullout Poster Giants Stand Tall: CSE Giants 100 Report Electrical Design for Tall Buildings HVAC and Fire Safety for Elevator Systems How to Beat the Codes GAS Technology Supplement Recovering Waste Heat from Boilers New Applications for Tankless Water Heating Systmes Techniques Improve for Powder Coating MDF New Tools Available for Heat Treating Steel Direct Drive Engines

Consulting-Specifying Engineer - August 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.