Challenges in Engineering Consultancy
Published on : Sunday 02-05-2021
Dr V P Raman presents a perspective of the challenges faced by engineering consultancy companies in the digital era.
The rationale for hiring an engineering consultancy company (or a consultant) is the many benefits that accrue in the process. Rather than the client (or company) investing in pricey technologies, consultants provide specialised technical expertise along with latest software tools, apart from recruiting and retaining the required staff, which in turn enables several cost benefits. Additionally, consultants provide an objective and practical viewpoint, which allows for more diverse ideas than that could be provided by employees within the organisation.
However, there are several challenges faced by every consultant, be it DEC, EPCM or EPC, and some of these challenges are listed below.
1. Talent Management – Recruitment & Retention: Attracting the best employees (and retaining them) is one of the top priorities of engineering consulting companies. Talent poses a major challenge, as employee engagement becomes very important with proper career opportunities being provided to the workforce by staffing them in the right projects and work assignments. Training and developing their technical skills are vital for the success for any consultant and is beneficial for the employee. For every project, right talent and resources as a team are required to take a project forward from concept to completion. The team should have the knowledge, passion and motivation to develop all deliverables within the stipulated schedule without compromising the quality and safety.
2. Aggressive Project Timelines, Scope Variations and Budget Constraints: As industries become more diversified and competitive, consultants face increasing pressure to meet corporate demands regarding project schedules and budgets. Clients have become more demanding, pushing back against concepts such as billable hours, and demand greater transparency on costs and due to digital innovation, clients expect more value, higher quality of work, and faster delivery.
The successful completion of detailed engineering for any project is influenced by the timely acceptance of design changes proposed by the consultant during design development, as they develop the Front End Engineering Design (FEED) based on that Licensor’s requirements and other available detailed engineering data. The main challenge is that the clients tend to be unfavourable towards the design optimisation proposals by the consultant. During detailed engineering, multiple design reviews are held and during these reviews, all design changes, like additions and deletions from the FEED design, are discussed. Often, clients insist on following the FEED design, even though the proposed optimisation by the consultant may offer improved design. Consultants develop the design, based on the detailed design data, including data from vendors and results from specialised engineering studies, safety studies, etc., which are not available at the FEED stage. Therefore, consultants are better equipped to analyse the design optimisation opportunities.
Even though the consultant is responsible for the detailed design and performance guarantees of the project facilities, they are often forced to forego their optimised designs. The consultants face a multitude of challenges like schedule, man-hours consumed, procurement, duration of site management (manpower deputed to site), etc., and all these challenges directly hit the bottom lines. Preparing a realistic schedule and budget for any project is of paramount importance and to ensure profitability, the business process must be designed in a way that minimises both initial capital costs and ongoing operating expenses and, most importantly, it must be built on time and within the budget. The total design must be vetted and verified before construction can begin, to combat the risk of failure and cost overrun.
3. Innovation, New Competition & Margin Control: In a world that is margin-driven, innovation in design utilising the latest tools is essential, even though they may be expensive. However, the latest software tools for design of process, mechanical, piping, electrical, instrumentation, etc., are vital to stay abreast amongst the competitors. Innovation is needed to discover the niche where a specific set of skills can be applied. This is one of the major elements in the competitive battle and faces the globalisation threat. Environmental rules impact the projects heavily, especially with regard to getting approvals from various statutory authorities.
Buoyed by innovative new technologies enabling them to do more with less, new players are entering the consulting market, bringing about digital-savvy business structures. Small specialist firms are not the only form of competition to be on the rise. The increase in independent freelancers and small-time consultants is also proving to be a major competitive force. They are putting pressure on prices, because they operate without the same overheads as the larger firms.
Getting involved in major projects, in a multi service engagement, and at a competitive rate, gives little room for error. Staying lean with absolutely essential and focussed technical personnel, capable of doing multitasking is one of the keys to increase the bottom line. Many consultants do not monitor the productivity and the quality requirements in a transparent way, resulting in severe hit in revenue. KPI’s should be set, based on past project learning and experience. Automation and standardisation is the key – a trend likely to continue.
4. Cybersecurity: Consulting firms handle an enormous volume of confidential client information. This ranges from strategic information to commercial and personal data. Such high-value information can be very damaging if it falls into the wrong hands. That makes professional service firms obvious targets for hackers, and data breaches, and pose a serious threat to consultants. The business environment is becoming increasingly digitised, with information and transactions moving faster and manual tasks becoming automated. This digital transformation affects every part of the consultant’s work, changing the nature of competition, proposals, contracts, and deliverables. Embracing digitisation and automation is about more than just using technology. It’s also a mind-set.
5. Give complete details to Construction Teams: There are several cases, where the detailed design along with all the deliverables and drawings after handing over to the construction team – only to be stymied by thousands of questions from the construction teams. This is where many teams lose substantial amounts of money and can prevent it by bringing an engineering team into the mix before construction. Change Orders are more than a nuisance – they are a costly pain point that often extends the schedule, adds to the project cost, and generally frustrates management. The way to prevent the bulk of costly and impactful Change Orders from taking place is to apply detailed engineering concepts before construction, including constructability review, interference checks, safety reviews, etc. Taking care of these steps early on allows the team to build a detailed, holistic project plan and effectively schedule all necessary milestones to keep the project on track.
Covid-19 pandemic has created unprecedented challenges to every consultant, as it involves work-from-home and other guidelines issued by the government and under such circumstances, there are several new challenges.
Normally, engineering for any project is done by an engineering team comprising various disciplines, which is reviewed internally by the team and externally by the client. Here an effective way to exchange the design documents safely without compromising the quality and safety has to be followed, which is extremely difficult and will be difficult to convince the clients, especially about security. Though various video conferencing software tools like Zoom, Google Meet, Microsoft Team, etc., can be used, this requires an effective work processes and workflows to be developed. It would be ideal for the consultant to place all the design details in dedicated servers within the organisation, where every team member can login and extract what is required by them, with a high level of cybersecurity and firewalls.
Another major problem would be regarding internet connectivity and speeds of the various team members, as many design files would be large. Design drawings after review and approval cycles, need to be issued on time to the site construction team to prevent delays in the project. The idea of design review, safety studies, procurement management, vendor data review, constructability review, etc., becomes more challenging.
Hopefully, with the vaccine roll out, the pandemic will be controlled at the earliest, so that the engineering consultants can be back on track and the government and clients coming out with new projects to ensure the economy gets the desired boost.
Dr V P Raman is a post graduate in Instrumentation Engineering and has over 40 years of experience, with various Engineering Consultancy Companies, EPCs and end users in areas like Oil & Gas, Petrochemicals, Fertilizers, Refineries, Cross Country Pipelines, Polyester Plants, Water & Wastewater, etc. He has wide exposure in FEED, basic and detailed engineering, procurement, project management, construction and commissioning. He has the expertise in managing the total engineering and project cycle, covering all engineering disciplines, using latest software tools, and has travelled worldwide on various project assignments.
Dr Raman has worked with reputed organisations like UHDE, ADNOC, Chemtex Engineering, Chemtrols Engineering, Mott MacDonald, TECTON Engineering, etc., holding very senior and responsible positions. Presently, he works as an Engineering Consultant with some of the companies.
Dr Raman is associated with various professional bodies like – ISA, IEC, IED, etc. He was the past District Vice President for District 14 of ISA and is actively involved with ISA-Maharashtra Section for the last 20 years. He is associated with ISA in various Standards & Practices Committees. He was the recipient of “Excellence in Enduring Service Award” from ISA-USA in the year 2018. He has published several technical articles in reputed magazines like Control Engineering, Automation World, INTEQ and Industrial Automation, among other.