Keys to Continued Success

In 2022, the engineering sector flourished as construction engineering projects bounced back, following a dip during the pandemic. The outlook for 2023 is a little more complicated. 

According to a recent survey, 23.4% of firms expect revenue to decline in 2023, and 34.4% think it will stay flat. There may be reasons to be pessimistic: recession fears, inflation, supply chain delays, and labor shortages continue to make the engineering sector look volatile. But there are plenty of bright spots as well.

Many sectors of the economy are booming right now and show no signs of slowing down, creating a solid and sustained demand for engineers of all types. Global construction output is projected to grow by 50% between 2020 and 2030. For example, major infrastructure and defense spending bills in the United States will pour hundreds of billions into building projects. Likewise, a growing tech sector will need more data centers and research facilities, and eCommerce will increase demand for warehouses and logistics hubs. 

With many firms experiencing both headwinds and tailwinds, it creates dynamic conditions that could lead to major competitive realignments in the engineering sector. Ambitious firms have the opportunity to capture market share and grow (rapidly) through innovation and efficiency. Alternatively, previously successful firms, even those with a long legacy, risk eroding their advantage because they’re unable or unwilling to adapt.

How 2023 (and beyond) turns out has less to do with the economy and more with forces inside each individual firm. This year will be critical for updating the tech stack, the staff mix, and even the engineering business model for the coming years. Here are a few ways we expect to see these trends converge in the coming months: 

Moving Towards Digital Transformation

Digital transformation allows data to move seamlessly between systems to uncover new insights and enable greater efficiencies—but it’s only possible when critical processes are digitized and synchronized. Engineering firms in 2023 will add technology that has not been utilized before, such as field service management (FSM) software, to enable engineers to work in the field better. Firms will also move to link together crucial systems. For example, when FSM software syncs with business management tools, like NextService does with NetSuite,  field service data flows directly to billing. Digital transformation gives engineering firms a powerful tech toolkit and an early lead over slower-moving competitors. 

Raising the Bar for Service Delivery

Another way firms will distinguish themselves in 2023 is through exemplary service delivery. Firms that can get engineers on site faster and with less friction for the client will keep their customers more engaged and lower the cost of service delivery in the process. They will spend less to make more – but it takes tools that can integrate and optimize all aspects of service delivery. Field service management software for engineers will become more common in 2023 as firms look too perfect and distinguish how they deliver services to stand out in the market. 

Making Profitability the Priority

The coming year will explore where firms are and aren’t profitable—followed by an effort to realign the service offering, revenue expectations, and business model around what’s most profitable. Traditional profit centers may not be as lucrative as before, while new ones may be emerging. For example, office construction is slowing down while green development is going gangbusters. As the opportunities in the engineering sector evolve, companies will need to understand what drives their profitability and make it their priority. That may mean offering more “green” services, subscriptions, or specialized services. 

Creating Resilient and Scalable Processes

Recent years have reinforced the need for companies to be resilient against sudden, sweeping, and surprising forces. This is especially true in the engineering sector because it’s closely connected with construction, which goes through constant ups and downs. To take the next pandemic or downturn in stride, engineering firms will spend 2023 making their processes more adaptable and scalable, primarily by adding technology where it hasn’t existed before. Tech alone doesn’t make firms resilient. However, it allowed them to be flexible enough to change and informed about how. 

NextService – Field Service Management for Engineers 

Transform an engineering firm for the better by implementing the NextService FSM software in 2023. It comes with a complete toolkit for service delivery, making it easier (and more profitable) than ever to send engineers into the field. Plus, it runs on-platform with NetSuite, so both systems work as one. For the engineering and manufacturing company STH, NextService replaced the functions of 4 different legacy systems. By implementing NextService with Oracle’s NetSuite, STH gained ease of navigation, efficient data management, data consistency, and robust reporting and analytics across multiple applications. See how NextService helps engineering firms do everything for the better. Contact us.