Engineers and contractors, finding their traditional services in danger of becoming commoditized, are carving a place in an area traditionally thought of as belonging to consultants — and, they’re facing a few challenges along the way.

It’s no secret that consulting is big business. Recent reports estimate that the revenue in professional advising services could grow 18% in 2001, with construction programs being one of the fattest growing pieces of the pie. Fully aware of this projected growth, engineering and contracting companies have begun to acknowledge that a significant financial future lies in extending their traditional services to include consulting solutions. This is especially true as many of these companies are experiencing the increasing devaluation of what they had once thought of as their core services. The sweetest apple on the tree, for these crossovers, is to guide the upper level decision-makers at the very beginning of a project. For many engineering and contracting firms new to the consulting market, reaching for this fruit means setting up special in-house teams creating a concentration of talents and resources able to provide their potential clients with a set of more upscale services.

As an increasing number of engineering and contracting firms are branching out to include overall project management, situations can occasionally occur that create the potential for conflicts of interest. Another area of contention commonly mentioned by critics of the trend is the nepotism that can be practiced by contractor’s parent companies in their auditing procedures. Executives of these firms admit that the possibility of both these problems does exist. However, they remind critics that they have to market services internally as well and that no companies are ever guaranteed of walking away with a bid. As a result of this undue coziness perhaps, the U.S. Securities and Exchange Commission ruled last year for suspect accountant consultant firms to be broken up to avoid any compromised negotiations. On the heels of these breakups, however, some companies have reported healthy profits from the requisite selling off of their consultant divisions.

Another hurdle the engineering and contracting firms-turned-consultants face is one of proving their credibility to contractors on the site. Newly minted firms can establish this much-desired credibility by making sure that their project managers are educated individuals who are fully versed in the ins and outs of the projects they oversee. The opinion many engineers and contractors have is that their prior industry expertise is an asset that actually makes them better qualified to handle project management.

Finally, of course, engineering and contracting firms must meet the challenge of developing the quality of their services, particularly in regards to attracting the right personnel that will perform them. This means putting together a compensation plan that ensures the attraction and retention of the top-grade talent that such management positions require. Some executives are eyeing the veteran employees of failed dotcoms as a potential candidate pool. Traditional advisors may even be lured from the other side of the tracks as well, finding themselves working for companies that they might once have called clients.

Source: Consultants Vie for Owner’s Hearts, Minds & Purses
Debra K. Rubin & Mary B. Powers
Engineering News Record, February 12, 2001
http://www.enr.com/new/cover21201.asp