Last week I had the opportunity to attend launch events for the Future of Consultancy, developed by the Association of Consulting Engineers (ACE) with support from the Transforming Construction Challenge. Having spent a lot of time immersed in many aspects of the Construction Sector Deal, I’m delighted to see a joined-up contribution from the consulting sector – an approach that recognises the scale of the opportunity to add value through better targeting of consultant skills on emerging challenges rather than legacy business models. Now that the dust has settled, will the vision make a difference to consulting businesses, and more importantly, are consulting businesses able to implement it?
Together with all businesses in the construction sector, consultants have seen their markets transform before their eyes. Automation and offshoring of volume design activities threatens the long-term sustainability of fee-based, output services, whilst events such as the Grenfell disaster have challenged underlying assumptions with regards to the assurance, value and benefit we provide. With the net-zero carbon agenda expanding and accelerating at an unprecedented rate, it is vital that consulting businesses rethink their role.
The ACE vision and strategy is very clear. In summary, proliferating data and new demands from stakeholders such as sector-wider carbon reduction will combine to create a growing range of opportunities for consulting businesses at different stages of the asset lifecycle. From policy and strategy through delivery to operation. In order to make this work, consulting businesses will need to combine skills in new ways as well as developing a range of business models in response to client need. The present core of our work – designing and managing the delivery of capital projects – will of course remain a big part of future workload. However, the greater potential for growth and for delivering even better outcomes to our clients and our stakeholders is likely to be found in the operation of existing assets.
One could argue that this is not a significant change. After all, consulting businesses have been offering asset management services for many years. However, such a view underestimates the pace of change in the world of asset operations and the way in which data could transform our ability to participate effectively in this market. ACE have wisely spotted that the development of the Digital Framework and Digital Twin concepts by Cambridge Centre for Digital Built Britain could be a market maker with as great an impact of the Big Bang in financial markets in the 1980s. Linking data to assets, integrating data across assets and systems and basing decisions on predictive analytics is currently a niche activity mostly undertaken by specialist consultants. How big could that market be if all asset owners saw data, analytics and advisory as their route to better outcomes?
So far, so good, but at the moment, the consulting sector doesn’t really have the capability to pursue this opportunity. Without action, the Future of Consultancy could become the lunch that a Tech Start-up devours. Thinking about the enablers necessary for competitive advantage is as important as identifying the target markets. Skills and innovation are naturally big enablers, but the one that intrigues me in the ACE strategy is business models. Not because business models are more important than skills or innovation, but because the development of new business models requires us to re-examine how we work with our clients and customers and how we add value to them and to wider society.
I’ve recently been working on the Procure for Value workstream with colleagues from the CLC and Construction Innovation Hub. A lot of our work is focused on finding ways for clients to value proposals that deliver different outcomes – carbon reductions or local jobs for example – so that it isn’t just the lowest price option that is selected and taken forward through a procurement process. This sounds quite abstract and goes a long way beyond Totex, but at the heart of the concept is a way of buying services that starts to recognise and pay for the different sorts of value delivered on projects. Finding new ways of delivering and demonstrating value, increased capacity of transport networks, improved air quality, even doing less new build work if it saves on carbon. These will be the opportunities that businesses like Arcadis need to pursue in future if we are to be financially sustainable and answerable to our wider stakeholders.
To navigate this shift, away from the comfort zone of fee-based project delivery to different models based on products or assured outcomes will take brains, money and courage. There is a danger that in doing so, the construction consulting sector could focus on too narrow a front – wasting scarce resources by competing against ourselves. This could happen if we concentrate on developing similar solutions for the challenges that we see today rather than those which will emerge in a few years’ time. So, a transformation in the business model may well go beyond how we earn our revenue to how we develop and test our ideas. Open, industry-wide innovation around standard solutions could be one way forward. Alternatively, one-on-one collaboration with clients, stakeholders and their eco-system could be used to access the data and customers.
The Future of Consultancy is a timely report. It highlights a data-driven innovation trend that is already underway amongst many consultancy businesses, including Arcadis. ACE predicts that our future will be increasingly focused on dealing with the existing portfolio – maintaining, optimising and decarbonising assets. It highlights how consultants can bring together asset knowledge and technology capability to make a valuable and valued difference. What the report cannot do of course is to set out how businesses should manage their own transition. For that, the future is most definitely in our hands.
Partner and Head of Strategic Research and Insight team, Arcadis / Construction Leadership Council Member
Blog first published in Building Magazine – Issue 41 | 25th October 2019