8 ways architecture leaders can improve results with KPIs

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["a",["href","https:\/\/info.deltek.com\/Clarity-AE?sourceid=80\u0026utm_source=blogs\u0026utm_medium=website\u0026utm_campaign=architecture-engineering-benchmarking\u0026partnerref=website_blogs_architecture-engineering-benchmarking","target","_blank"]],["a",["href","https:\/\/info.deltek.com\/ae-clarity-scorecard?sourceid=80\u0026utm_source=blogs\u0026utm_medium=website\u0026utm_campaign=architecture-engineering-benchmarking\u0026partnerref=website_blogs_architecture-engineering-benchmarking","target","_blank"]],["em"],["a",["href","https:\/\/info.deltek.com\/becoming-data-driven?sourceid=80\u0026utm_source=blogs\u0026utm_medium=website\u0026utm_campaign=architecture-engineering-benchmarking\u0026partnerref=website_blogs_architecture-engineering-benchmarking","target","_blank"]],["a",["href","https:\/\/info.deltek.com\/AEC-Demo?sourceid=80\u0026utm_source=blogs\u0026utm_medium=website\u0026utm_campaign=AEC-ERP%20Solutions-blog-20221004\u0026partnerref=website_blogs_AEC-ERP%20Solutions-blog-20221004","target","_blank"]]],"sections":[[1,"h2",[[0,[],0,"AIA partner Deltek explores how you can take a strategic approach to benchmarking and make better-informed decisions."]]],[1,"p",[[0,[],0,"As a project-based industry, architecture firms need to track and analyze a range of metrics to ensure they\u2019re operating efficiently and profitably."]]],[1,"p",[[0,[],0,"And yet, the most recent "],[0,[0],1,"Deltek Clarity A\u0026E Industry Study"],[0,[],0," suggests that firms are leaving some critical key performance indicators (KPIs) off the table. While 94% track net revenue and the same percentage measure profitability, only 32% are assessing on-time delivery and 39% look at client satisfaction."]]],[1,"p",[[0,[],0,"So, how can forward-thinking firms do more with their KPIs and start making even better-informed decisions? Explore eight best practices for taking a strategic approach to benchmarking."]]],[1,"h3",[[0,[],0,"Why are KPIs so important?"]]],[1,"p",[[0,[],0,"KPIs help team managers and firm leaders understand the performance of their people, projects, and business."]]],[1,"p",[[0,[],0,"With the right KPIs in hand, firms can better understand what\u2019s going on in their business, how to improve key processes, and what success looks like. KPIs also help a firm assess what is going well and what may need to be adjusted in a timely manner compared to established targets or past performance to keep the business on track before it\u2019s too late."]]],[1,"p",[[0,[],0,"So, how can you get started? We recommend these eight best practices for benchmarking:"]]],[1,"h3",[[0,[],0,"1. Ensure benchmarks are holistic and balanced"]]],[1,"p",[[0,[],0,"If the metrics you measure skew to one part of the business, you risk your data \u2014 and your view of your firm \u2014 becoming biased. Instead, aim for a balanced set of benchmarks across all areas of the business, not just traditional financial KPIs. It is also important to determine if the targets for your business are feasible and in line with industry benchmarks. It isn\u2019t realistic to expect 95% utilization from all employees, but what is realistic and what is the industry benchmark for companies like yours?"]]],[1,"p",[[0,[],0,"When selecting the benchmarks to evaluate and the KPIs to monitor for your firm, a balanced and holistic approach is critical. "]]],[1,"p",[[0,[],0,"To compare your KPIs to industry benchmarks, check out the "],[0,[0],1,"Deltek Clarity A\u0026E Industry Study"],[0,[],0,"."]]],[1,"h3",[[0,[],0,"2. Tie KPIs to business goals and strategy"]]],[1,"p",[[0,[],0,"There are hundreds of options when it comes to which KPIs to track. By tying your KPIs to your most pressing business goals, you can easily identify which KPIs you need to track to monitor progress toward your goal. You\u2019ll also know if you\u2019ve successfully met your targets and be more clearly focused on meeting your strategic goals."]]],[1,"p",[[0,[],0,"Likewise, any strategic plans you put in place in the future should also align with your KPIs to help drive the business forward. This requires senior leaders to be committed to using KPIs and external benchmarks as a part of their operational planning and strategy."]]],[1,"h3",[[0,[],0,"3. Support benchmarking with accurate external data sources"]]],[1,"p",[[0,[],0,"Any KPI you can measure will deliver more value when compared to an external data source. For example, by benchmarking your firm\u2019s performance against the "],[0,[0],1,"Deltek Clarity A\u0026E Industry Study"],[0,[],0,", you\u2019ll have a frame of reference to set the best targets and measure your own success. Just take care to select external data that\u2019s consistent and trustworthy."]]],[1,"p",[[0,[],0,"Looking at the Deltek Clarity A\u0026E Industry Study, you can see how your own metrics compare to industry benchmarks, and the average results of \u201chigh performing\u201d firms. For instance, a utilization rate above 60% could put you above the industry average, but when setting a target, be sure to balance setting an aggressive goal like 75% utilization with the potential downstream impacts like burnout and employee turnover. Meanwhile, if your win rate dips too far below industry average, that could be a sign that it\u2019s time to take a closer look at your business development and pursuit processes to inform future pursuit decisions."]]],[1,"h3",[[0,[],0,"4. Get the right people involved"]]],[1,"p",[[0,[],0,"Any benchmarking process needs to include a wide array of people. In particular, you\u2019ll want to get the people closest to the metrics you\u2019re measuring involved to ensure you\u2019re measuring the right figures, in the right way and can understand the processes that may need to be adjusted."]]],[1,"p",[[0,[],0,"Once you have a core team in place, you also need to devise a way to clearly communicate KPIs and goals across the business and drive company-wide alignment."]]],[1,"h3",[[0,[],0,"5. Get a full understanding of the numbers"]]],[1,"p",[[0,[],0,"Simplicity should be your guiding star when identifying the right KPIs. Whether it\u2019s the numbers themselves, the way they\u2019re measured, or what a meaningful rate of change looks like, everyone involved should have a full understanding of your process for measuring and monitoring your KPIs."]]],[1,"h3",[[0,[],0,"6. Understand what change looks like"]]],[1,"p",[[0,[],0,"The underlying purpose of monitoring KPIs is not to measure static results, but to understand change over time. To do that, you\u2019ll need a clear understanding of what meaningful change looks like \u2014 and what activities cause it. If your people don\u2019t know how to move the needle, it\u2019s likely they won\u2019t be able to do so effectively."]]],[1,"p",[[0,[],0,"If your current metrics fall short of the industry average on our "],[0,[1],1,"Deltek Clarity A\u0026E Scorecard"],[0,[],0,", then getting your numbers up to the industry median is a great place to start. But it may not be realistic to go from where you are today to the industry average. You may need more incremental targets with the goal of reaching the industry average or high performer average."]]],[1,"h3",[[0,[],0,"7. Don\u2019t just look at the numbers, look at what they tell you"]]],[1,"p",[[0,[],0,"Every KPI should directly tell you something about your firm, projects, or performance. If it doesn\u2019t, your KPI may be too complicated or you may need to change the data supporting your KPIs. That\u2019s why all KPIs should be easily understood, and all expected results should be reasonable. After all, it\u2019s not realistic to expect a 100% utilization rate."]]],[1,"h3",[[0,[],0,"8. Develop and review your KPIs regularly"]]],[1,"p",[[0,[],0,"As your firm evolves over time, so must your metrics and KPIs. To ensure this happens, many firms create standard dashboards or reports to monitor KPIs in real time and establish regular meetings to discuss their performance and find ways to improve them."]]],[1,"p",[[0,[],0,"The frequency of and attendees to this meeting will need to flex depending on your KPIs and the needs of the business."]]],[1,"h3",[[0,[],0,"How to make the most of your data"]]],[1,"p",[[0,[],0,"By following these eight best practices, you\u2019ll create a strong foundation for your KPIs and the essential insights they deliver. From there, you\u2019re not far from delivering future-facing reports that can help your firm leaders make the most informed decisions."]]],[1,"p",[[0,[2],0,"Explore more benchmarking best practices "],[0,[3],1,"in our white paper: The Top 10 A\u0026E Benchmarking Best Practices"],[0,[],1,". \n\n"]]],[1,"p",[[0,[2],0,"To learn more about KPIs, and how you can measure and manage them with the right solutions, "],[0,[4],1,"take a look at how Deltek ERP solutions help architecture and engineering firms make smarter, faster decisions"],[0,[],1,"."]]],[1,"p",[[0,[2],1,"AIA does not sponsor or endorse any enterprise, whether \npublic or private, operated for profit. Further, no AIA officer, \ndirector, committee member, or employee, or any of its component \norganizations in his or her official capacity, is permitted to approve, \nsponsor, endorse, or do anything that may be deemed or construed to be \nan approval, sponsorship, or endorsement of any material of construction\n or any method or manner of handling, using, distributing, or dealing in\n any material or product."]]]]}