The Future of Architecture and Engineering: A Q&A with CESA Manager Wallace Mayne
Consulting Engineers South Africa (CESA)
In an industry centered around innovation, the question always remains – what’s next?
To help answer this, we’ve launched a series of blog posts exploring the past, present, and future trends in architecture, engineering, and construction consultancies. Over the next few months, follow along with us as industry leaders share their thoughts.
In this post we spoke to Wallace Mayne, Principal Engineer and Manager of Contractual Affairs for Consulting Engineers South Africa (CESA). As manager, Wallace provides assistance to member firms and clients relating to new legislation surrounding procurement and contracts as well as other legal matters affecting CESA. Wallace is a trained civil engineer and has worked on the City Council of Johannesburg as well as the Water Institute of Southern Africa. Wallace holds a Bachelors and Masters in Civil Engineer as well as an MBA from the University of Witwatersrand in Johannesburg, South Africa.
Note: The latest Biennial Economic Capacity Survey (BECS) compiled by CESA for the period January-June 2015 provides an overview of the engineering sector and forms the basis for most of the answers provided below.
Q: What do you think is the most significant trend that will impact the future of the AEC industry in your region over the next 5 years?
The most significant trend impacting the future of the South African AEC industry is the poor state of the national economy. The economy has a very low growth rate (between 1.5-2.5%) and may take 5 years or longer to recover.
The low growth rate/depressed economy is exasperated by the problems that have beset public sector procurement. The public sector accounts for 57% of the fee income of CESA member firms. Problems include:
Procurement irregularities/ corruption (including award of tenders to middlemen who ‘on sell’ the tenders to competent AEC firms)
Discounting of fees (average level 25%),
Mismanagement of budgets (slow release of projects into the market-place),
Relegation of quality standards for firms and a focus on Price and Preference (an award of preference points for achieving transformation e.g. black ownership, training spend, etc.)
Slow or non-payment by clients (by both Public and Private Sector, but especially Private Sector)
Another major trend (threat) impacting our sector is the diminishing number of experienced engineers in our sector
Q: How do you see the current role of AEC firms shifting, what do you think is causing that shift, and how must AEC firms react to survive?
Regarding the shifting of the current role of AEC firms and what might be causing that shift:
The true role of consulting engineers (planning, design and monitoring) has not significantly altered except in the sense that:
Firms have had to struggle for work and focus on business principles in addition to technical expertise
The majority of Public Sector clients have an acute shortage of managers with technical expertise and where possible/permitted the firms are assisting the clients in this regard
Firms are assisting clients in arranging finance for their projects e.g. Public Private Partnerships (PPPs), approaching development banks, arranging loans
Considering how AEC firms must react to survive (and how they have reacted):
Consolidation of firms (bigger firms ‘buying up’ smaller firms’)
Entry of multi-national firms into South Africa to merge with the bigger South African firms
Firms are looking for work elsewhere, beyond South Africa borders, mainly in Africa and the Middle East, where 24% of the total fee income was derived
Many firms are forming joint ventures with and developing wholly black-owned firms to boost their preference points in the public sector procurement process
Smaller firms are cutting back on training, mentoring, and coaching investment as these are no longer affordable in the current environment of ‘tight/very low margins’.
Q: Knowing what you know today, are there things you would or could have done differently to prepare for or react to the Global Financial Crisis of 2008? Are there things that you are doing differently now because of the GFC? How have you evolved your processes or policies post-GFC?
This is a difficult question to answer as the effects of the GFC were largely countered by massive investment in the construction sector required for the staging of the 2010 Soccer World Cup in South Africa. The effects of the GFC were not felt until after the World Cup event.
In South Africa, the construction sector is familiar with the 'boom/bust’ nature of the sector and is well-geared to making changes to accommodate these economic phenomena, so it was ‘business as usual’.
CESA has not adopted any special processes as a result of GFC.
Q: What is the biggest challenge you are currently tackling within your firm or association?
CESA is focusing on addressing the following challenges in the sector:
Improving the public sector procurement system e.g. separation of construction procurement process from the procurement of standard goods and services process, the inclusion of quality in the procurement system.
Effective reporting of procurement irregularities
Slow progress of identification of engineering work currently ‘sitting’ with the Competitions Commission. Cannot outlaw non-qualified people undertaking engineering work until approved
Q: How has your office environment changed, and how is your firm continuing to evolve your workplace environment, procedures, and technologies, to accommodate the evolving demands of the incoming millennial workforce? What considerations and changes are you making regarding collaboration, efficiencies, work/life balance, technologies, etc.?
CESA has recently undergone changes in executive leadership and at the moment is focusing on “working better and smarter” (like a well-oiled machine):
In getting the basics update e.g. organisational structure, job descriptions, performance contracts, profit-centres
In meeting/serving the needs of its members e.g. newsletters, events, advisory services, representation
Raising industry awareness of the Association e.g. interacting with clients, organising conferences and meetings
Ensuring its sustainability (financial and relevance) e.g. budgeting and cost controls
What considerations and changes are you making regarding collaboration, efficiencies, work/life balance, technologies, etc?
Collaboration – interacts with the Engineering Council of South Africa (ECSA), built environment professional groupings, other voluntary associations
Efficiencies – no major changes
Work/life balance – have not considered this aspect
Technologies – no changes envisaged, have modern IT and Office Equipment
This post is part of a question and answer series with global industry leaders on the future of the architecture, engineering, and environmental consulting industries.