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The Future of Architecture and Engineering: A Q&A with AJCE Secretary General Yoshi Yamashita

Yoshi Yamashita
YoshiYamashita
Secretary General
Association of Japanese Consulting Engineers (AJCE)
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 Yoshi Yamashita, Secretary General of the Association of Japanese Consulting Engineers (AJCE), headquartered in Japan. Yoshi is a trained civil engineer and works to enhance the status and competence of private Japanese consulting engineers through his work at AJCE. 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? A:  Keeping the economic growth rate up--which is linked to budget on public works In Japan, the maintenance and renovation of social infrastructure from the past 50 years of development will be a significant project. Strengthening alliances and development through mergers and acquisitions (M&A). In Japan, there is a decreasing trend of young professional engineers’ participation in our industry, coupled with the aging of tenured engineers. 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? A:  From domestic to global. The demand and capacity of the domestic market is limited, though the domestic market is safer and easier in terms of long term survival. This makes AEC firms act protectively and conservatively. It’s important to remember that escaping from challenges cannot guarantee success in international markets. While the domestic market is in good condition, AEC firms should invest in business development in the overseas market – human resources, tools and systems (and know-how), experience, and investment. To be successful, AEC firms need a specialist’s advice, alliance with overseas firms, development through M&A, etc. 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? A: This is a difficult question. We should train ourselves to distinguish if we are doing or going to do something beneficial to people, not for money. However, proper service remuneration is necessary to keep firms sustainable and to gain rewarding future opportunities for young engineers. Q: What is the biggest challenge you are currently tackling within your firm or association? A:  Consolidation with related associations to better represent our industry to the client and to society. This will also create business opportunities. Education and capacity building of young professionals who can compete in the international market. Involvement in political decision making processes--this is a very tough challenge. 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.? A:  The effort of our association (AJCE) is to promote the opportunity of capacity building for young professionals and business development of member firms through an exchange program with overseas FIDIC Member Associations. FIDIC tools and trainings are used to facilitate challenges. Business development or deployment in domestic and international markets are basically in the hands of each firm. CEO’s policy and strategy are key to success. Association’s support on this matter is limited. To become a stakeholder is one of the most important objectives in future. Government has been leading and controlling the infrastructure market in Japan. To get out of this difficulty, we must expand our business overseas and increase competence of professionals. How? Education in school and firms (English proficiency, international way of thinking, more exchange with foreign people, business debates, risk awareness, integrity, etc.), alliance with FIDIC Member Associations, training of young professionals in foreign firms or through overseas projects, successful mergers and acquisitions (M&A), etc. Above all, motivation, seriousness, middle-long term strategy, and a financial perspective from CEOs are deemed to be the most essential factor. Author’s note: These answers are my personal opinion, and thus do not represent the opinions of AJCE. 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.

The Future of Architecture and Engineering: A Q&A with STD-företagen Managing Director Magnus Höij

Magnus Höij
MagnusHöij
Managing Director
Swedish Federation of Consulting Engineers and Architects
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 Magnus Höij, Managing Director of the Swedish Federation of Consulting Engineers and Architects (STD-företagen) headquartered in Stockholm, Sweden. Magnus joined the Swedish Federation of Consulting Engineers and Architects in 2014. He was previously editor-in-chief for several publications, including Computer Sweden and Internet World, covering topics on IT and online services. He has great interest in the technology, marketing, organization, and personal skills needed to make a successful business and has penned several books on IT and business. 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? A: Globalization and digitalization will probably be two the trends that we will talk a lot about and that will have big impact for our industry. The processes and legal frameworks will be increasingly global, which will lead to a global market for expertise and knowledge. Digitalization will not only help us work more efficiently, we will be able to construct new things and we will be able to participate in the dialogue with customers and other constructors in the building process even more than today. 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? A: The need for innovation in the world of construction and infrastructure is huge. As companies, we need to meet this need with a higher degree of new and provocative ideas, based on our deep understanding of the technological framework. But we also need to bring in new perspectives from not only engineers, but also architects, behavioral scientists, statisticians, political analysts, etc. in order to tie these trends and insights together. 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? A: I wasn’t in this industry at that time. However, I think that our industry is working with issues that could in many ways be needed to avoid this kind of crisis. A good infrastructure is a foundation of a modern society. Without it, the society is more vulnerable. Our ability to tell that story to politicians and decision makers will also determine how well we will manage the next financial crisis. Q: What is the biggest challenge you are currently tackling within your firm or association? A: Our ability to adopt to the rapid changes in the marketplace. Our companies are quickly becoming both more global, crossing borders to other industries and facing challenges from totally new players in the market. As an organization, we need to keep up with these changes, understand the new landscape, and try to lead the way for the industry in to the future, not be dragged there. 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.? A: The most important part of taking care of younger staff is about leadership. We must make sure that each and everyone can find his or her best way to contribute. Teamwork is so important in the modern work life. That could, in part, be done by adding new tools, hardware, physical planning of the office, work hours, etc. But everyone is unique in so many ways, that each leader must be able to adapt to each situation. Investing in leadership skills is priority 1, 2, and 3. 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.

The Future of Architecture and Engineering: A Q&A with CESA Manager Wallace Mayne

Wallace Mayne
WallaceMayne
Manager
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? A: 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? A:  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? A: 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? A: 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.? A:  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.

The Future of Architecture and Engineering: A Q&A with ICT Group Chairman Kiran Kapila

Kiran Kapila
KiranKapila
Chairman
ICT Group
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 Kiran Kapila, Chairman and Managing Director of Intercontinental Consultants and Technocrats Pvt Ltd (ICT Group) headquartered in New Delhi, India. Mr. Kapila is a chartered civil engineer, Chairman of the International Road Federation, Co-Chair of the Federation of Indian Chambers of Commerce and Industry (FICCI), and Member of the FIDIC Executive Committee. Mr. Kapila has strived to advance civil engineering and serve the ‘public good’ throughout his long and successful career. 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? A: The future of the AEC industry in India will be governed by the consulting opportunities available, the procedure for the selection of consultants, the capacity building of personnel, a commitment to quality and competitiveness for all selections, and the streamlining of payment procedures. 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? A: AEC firms must work to get policy issues adopted for all jobs with preference to Qualifications-Based Selection (QBS) or at least Quality and Cost-Based Selection (QCBS) for the selection of consultants. This will ensure due weightage to quality in selection and appropriate compensation for the services rendered. Whichever institution plays a dominant role in this regard will attract good experienced firms to work for them and deliver projects of high quality. 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? A: Post GFC, the overall opportunities available globally are reducing. To adjust, firms are reducing their staff strength, but at the same time trying to retain their capabilities through multitasking or collaborating with other firms through joint ventures or mutually beneficial collaboration in order to retain their market share. Q: What is the biggest challenge you are currently tackling within your firm or association? A: The biggest challenges facing our firm are: The burden of service tax, wherein a firm has to pay service tax, even if payments have not been received from clients. The retention of skilled manpower with limited opportunities available. The task of enlarging the scope of rendering services through partnership, etc. 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.? A: The office environment is moving towards automation, with the prevalence of IT, internet, software applications, etc. This ensures  our work force is fully up-to-date with the available technological solutions, in particular, with regard to the environmental sustainability. In addition, we are chartering new partnerships for enhancing skills in areas where in-house capabilities are not adequate. 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.

The Future of Architecture and Engineering: A Q&A with Consult Australia CEO Megan Motto

Megan Motto
MeganMotto
CEO
Consult Australia
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 Consult Australia CEO Megan Motto based in Sydney, Australia. Megan Megan is also currently a Director of the Australian Construction Industry Forum (ACIF), Councillor of the Australian Chamber of Commerce and Industry (ACCI), Councillor and Treasurer of the Australian Sustainable Built Environment Council (ASBEC) and sits on the NSW State Advisory Council for the Committee for Economic Development of Australia (CEDA). She was named as one of the 2014 AFR/Wespac 100 Australian Women of Influence.  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? A: Globalization will be the biggest trend to affect this sector (and region), as it has already to date. As projects become bigger in scale, value and complexity, the consulting community is responding by pursuing stronger balance sheet growth so as to both spread and manage risk. Whether this risk is due to the imbalance of power between consulting firms and international construction consortiums, the cost of tendering, or sourcing adequate capacity for jobs, rapid growth strategies (usually through acquisition and merger) are fundamentally shifting the structure and culture of our industry. This is forcing change on a number of fronts, whether it be firms embracing technology to drive operational efficiency, or understanding the resulting cultural and behavioral changes that will impact project management and partnering relationships. The industry is never likely to look the same as it did a decade ago. 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? A: There is a growing gap between those consulting firms that are attempting to elevate their advisory services to compete with the management consultants in the built environment sector, and those that merely provide downstream services. This is partially driven by the size and capacity of the new global players, and a desire to reclaim the more lucrative and rewarding elements of the services supply chain. It is also driven by a desire by the industry more broadly to both participate more fully in higher order public policy and to remain relevant in an increasingly global, competitive and complex environment. This will mean, however, that firms playing in this space will need to develop new capability with regards to delivering fit for purpose policy advice rather than technical advice. The two might converge on the same information, but the delivery systems will be wildly different.  At the other end, it will be increasingly important for firms to demonstrate best practice technical services and have a clear strategy for talent attraction and retention, so as to remain viable for the future.  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? A: I think for most Australian companies the biggest shock of the GFC was that our organizations didn't have exponential growth paths. In Australia we are now in our third straight decade of economic growth, and this has meant that many middle and even upper level managers had been lulled into a false sense of security that the good times would last forever and that we were innately resilient from external shocks. Thus we did not react fast enough to the changing conditions. We had become bullish in our budgeting, buoyed by past successes, and underestimated the speed with which we could react to income collapses with expenditure controls in professional services companies. In future I think the industry will budget more cautiously, and look more closely at lead indicators in the broader market.  Q: What is the biggest challenge you are currently tackling within your firm or association? A: Maintaining relationships with the senior leaders of the industry is actually a real challenge at present. The turnover and movement of individuals in the Australian AEC sector is astounding - partially from mergers, partly from more immediate financial return demands from shareholders, partly through demographic and intergenerational change. For Consult Australia this means being more connected to the members via social media as well as traditional communication channels.  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.? A: Well although we are certainly not paperless yet, we certainly have LESS paper than a decade ago! I think the biggest change is of course the difference technology is making in terms of the autonomy of how work is packaged and delivered. Mobile connectivity means that work can be done any time, any place, and this is fundamentally changing our entire work culture. It means that we have more fluid boundaries between work and life, and this encourages more diverse workforces and more diverse working styles. This is a challenge for organizations as it necessitates more sophisticated management capability focused on outcomes rather than inputs.   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.

The Future of Architecture and Engineering: A Q&A with Past FIDIC President Geoff French

Geoff French
GeoffFrench
Past President
FIDIC
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 Geoff French, Past President of the International Federation of Consulting Engineers (FIDIC) and Past Chairman of the Association for Consultancy Engineering (ACE) based in the UK. Geoff was also the 149th President of the Institution of Civil Engineers (ICE). He holds a Bachelors degree in Civil Engineering from the University of Southampton. 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? A: Making appropriate use of improved technology. 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? A: The scale of the firms has increased very rapidly. It seems that our sector will become much more like the accountancy and audit sector where a few, very large firms, dominate. 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? A: Better diversification of both markets and business sectors would have helped – as would cutting deeper and faster. Q: What is the biggest challenge you are currently tackling within your firm or association? A: Helping clients get the right solutions to their problems by ensuring they are asking the right questions of their consultants. 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.? A: There has been a lot of change in what we use at work but relatively little in how we work. People still come together to work in offices both large and small – and seem to enjoy working in that way. 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.

The Future of Architecture and Engineering: A Q&A with SKOL Managing Director Matti Mannonen

Matti Mannonen
MattiMannonen
Managing Director
SKOL
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 Matti Mannonen, Managing Director of the Association of Finnish Consulting (SKOL) and Director of the Federation of Finnish Technology Industries based in Helsinki, Finland. Matti has over 30 years of international experience in consulting management. He specializes in sustainable development, transportation planning, and the construction of water and energy systems. He holds a Masters degree in Civil Engineering from the Helsinki University of Technology.   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? A: The AEC industry will become fully global. There will be new competitors, but also more work. Sustainability will become a determining factor in all industries.     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? A: Under a new competitive model, we can only survive by providing the best value to clients.  We must also be able to demonstrate value to our clients.  This will come in the form of innovative solutions, cost-efficient sourcing and networks, co-creation with clients and stakeholders, turn key services, digitalization, alliance formation, and risk sharing.    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? A: 2008 was a paradigm shift. Until then, you always had good markets somewhere. In 2009, every market was experiencing a recession, so being in many markets did not help.  Companies must be more agile than before and be prepared for continuous uncertainty. Outsourcing and flexible agreements should be used as a buffer. As the life cycle of products and services gets shorter and shorter, renewal in companies must be constant.    Q: What is the biggest challenge you are currently tackling within your firm or association? A: In Finland, we are fighting for good procurement practices. This will occur through better information capture and an improvement in the quality of the resources and skills of procurement units and individuals.  We want members to take a holistic view of projects that looks at life cycle costs and sustainability.    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.? A: We have shifted to a multi-space, flexible office with all of our IT in the cloud. All employees have the choice to work wherever they like--at home, in a cafeteria, or on the beach.  We work very collaboratively. Informal information flows are fast and efficient and the atmosphere is good. We also have a retention officer who is in charge of the continuous development of skills and practices.   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.

The Future of Architecture and Engineering: A Q&A with ACE CEO Nelson Ogunshakin

Nelson Ogunshakin
NelsonOgunshakin
Chief Executive Officer
ACE
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 environmental consultancies. Over the next few months, follow along with us as industry leaders share their thoughts. In this post we spoke to Nelson Ogunshakin, President and Chief Executive of the Association for Consultancy and Engineering (ACE) based out of London, United Kingdom. Nelson has 30 years of experience in engineering and construction. He has advised numerous organizations on commercial and financial transactions deals in the UK, Europe, Africa, Middle East, Asia, and North America.  He has extensive experience with construction, telecommunications, free trade zone development, mining, transportation, oil and gas, real estate, and hospitality related investment projects.   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? A: The use of Cloud technologies to facilitate remote working and increase flexibility in the working environment will have a major impact on the future of the AEC industry. Technology as a driver of change in working methods – for example, smart mobile phones – will also be significant.   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? A: Larger firms are better at understanding this technological imperator than mid-sized ones, while smaller ones are somewhat in denial. There is a consensus on the importance of BIM (Building Information Management) Systems. Still, the need for global operating platforms to deliver across different business landscapes will be critical to future success.    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? A: More attention to global trends and a better understanding of the true impact of globalization would have helped to prepare for the GFC of 2008. A sharp re-adjustment in risk appraisal by the financial system was overdue, but the timing was hard to predict. Since the crisis? We work to diversify portfolio and service offerings, expand geographical reach, broaden market diversification, and use technology to gain competitive advantage.   Q: What is the biggest challenge you are currently tackling within your firm or association? A: Firms are integrating vertically and horizontally into fewer, but larger practices. Managing the wider strategic implications of this market consolidation is a major challenge. In addition, we are working to increase demand for high quality and competent engineers and consultants in emerging markets. We hope to establish social and economic infrastructure development programmes across these major growth markets.   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.? A:  Our office environment now requires more agility and dynamism. Technology is a game changer. The use of newer technologies for communication, measurement, and relationship management lets us make decisions faster than ever. It also allows the flexibility to work from home or anywhere to complete projects/tasks without distraction. Today, it is necessary to be politically astute and aware of foreign markets. This knowledge helps predict trends and better deploy strategy. More and more, we involve members/clients in the development of future infrastructure research. 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.

The Future of Architecture and Engineering: A Q&A with KENCA Chairman, Jae Wan Lee

Jae Wan Lee
JaeWanLee
Chairman
KENCA
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 Jae Wan Lee, Chairman of Korea Engineering & Consulting Association (KENCA). Jae Wan is also the CEO of Sekwang Engineering Consultant Co. Ltd., as well as the President of the International Federation of Consulting Engineers (FIDIC). He holds Ph.D. and Masters degrees in international transportation, as well as a Bachelors degree in civil engineering.   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? A: The future of the AEC industry can be divided into two parts: business and technical. The business aspect of the industry is good in that the establishment of the Asian Infrastructure Investment Bank (AIIB) will increase opportunities in the Asia-Pacific region, including North Korea. Moreover, the Iranian economic sanction relief will not only create projects, but also will make firms more competitive to enter the Iranian market. As for the technical side, there are no new trends that we are not already aware of. The forces which have been causing a major transformation in the AEC industry for the last several years are still in effect. Some of the most powerful catalysts for these changes include: information technology (IT) and environmental issues. The firms’ core business strategies are being made through the use of IT, such as internet, intranet, and extranet, which may lead to the evolution of new business models in the AEC industry. Moreover, these new trends are also leading to changes in the way firms conduct business with regards to collaboration and competition with other firms. An example of this is the use of Building Information Modeling (BIM) for communication and management purposes. In recent years, global appreciation for environmental issues has been shifting priorities for many industry leaders, emphasizing the need for conservation of natural resources and minimization of waste. Issues such as natural disasters, sea levels rising, and climate change need countermeasures and restorations. Moreover, where the industry was primarily focused on infrastructure and economic development, it has now shifted its focus to sustainability.   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? A: In previous years, the primary role of AEC firms was the design and construction of facilities. However, with the trends mentioned above, their role is shifting to maintenance, management, and monitoring of facilities and people. Project management consulting (PMC) is becoming a popular service provided by global AEC firms, and they are adopting practices such as green procurement to appeal to their clients. The reason for such a shift in the industry is due to various environmental issues and the need for sustainable infrastructure to combat these issues. Moreover, as people are becoming more aware of these problems, there’s a greater demand for highly trained experts in the AEC industry to consult and manage global facilities and infrastructures. Much of the decision-making in the AEC industry is knowledge and experience-based, hence individuals with such expertise become highly sought after by competing organizations. AEC firms must invest in ways to manage information, transform it into knowledge, and promote corporate learning to share the expertise across the organization. It is important that AEC firms recognize the benefits offered by new technology and use it to remove barriers in the physical world of business, thereby gaining competitive advantage in the global economy.   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? A: Until half way through the new millennium, Korean AEC firms were denied large-scale project opportunities in the global market. The reason being that they could not meet the prequalification requirements without forming a consortium with other firms. Instead, they built their presence in the global market by starting with smaller-sized projects and by successfully delivering these projects one by one. They gained the confidence of their customers and established a positive reputation in the industry. Korean AEC firms suffered low contract volume in 2008-09, mainly due to the global financial crisis. The worsening engineering contract environment was attributable to demand decline for products. This unfavorable turn of events intensified competition for the dwindling numbers of engineering contracts. Ultimately, Korean AEC firms were not discouraged and successfully overcame the crisis. While experiencing the recent crisis, we learned that the Korean AEC industry had to eliminate a low pricing strategy to win contracts and abandon construction-oriented business models only for contract value consideration. In my opinion, risk management is a crucial factor to leading a successful project. Risk taking and its management is key to staying competitive in the global engineering business. Diverse risk factors exist in overseas markets. Currently, with their very survival at risk, Korean AEC firms have made sweeping changes to improve their capabilities in areas from engineering to project management, while weeding out deficiencies in their business to find better solutions. Korean AEC firms are trying to diversify by looking overseas from the Middle East and Asia to other regions in order to mitigate business fluctuation. More than anything else, they are trying to develop high value engineering capabilities such as Front-End Engineering Design (FEED) and PMC to secure profitability and sustainable growth in an integrated global engineering market. Korean AEC firms are also focusing on nurturing global standard engineers who have extensive global experiences and diverse language skills. They actively invest in talent development and attract talented people by proactively recruiting promising new graduates and professional engineers who can compete at the international level.   Q: What is the biggest challenge you are currently tackling within your firm or association? A: One of the biggest challenges being faced by KENCA is that there are too many AEC firms within the country competing with each other. In the past, when Korea was experiencing rapid economic growth and infrastructure development, there were enough projects for the growing number of AEC firms in the country. However, the domestic market has been slowing down gradually since 2010. Due to the fact that there is no concept of mergers and acquisitions (M&A) in Korea, too many firms still exist and continue to grow despite a dwindling global economy. For example, even Samsung Heavy Industries Co Ltd and Samsung Engineering Co Ltd, who are affiliates of the South Korean conglomerate Samsung Group announced their merger in 2014, but then canceled. Moreover, as Korea’s procurement policy does not meet the global standards, firms are receiving earnings shock when conducting foreign business.   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.? A: As our member firms are slowly changing their business models and practices to accommodate the changes in the industry, KENCA has also been striving to meet their needs by rearranging our organizational structure and updating our technological resources. We are currently relying on the internet to conduct market research and to form alliances with national, as well as international, associations and firms. However, we still have a long way to go as Korean firms are still using traditional management methods for all types of projects. Hence, we must conduct research on the types of projects conducted by our member firms as well as their management styles to provide them with better alternatives. We also need to introduce a new financial management system to our member firms that is more widely used by global firms today.   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.