Ah, the AEC industry—where buildings rise, bridges span, and metrics… are often overlooked?
That’s right, folks! While architects, engineers, and construction managers excel in designing and executing intricate projects, tracking Key Performance Indicators (KPIs) can sometimes be an afterthought. But fear not! We’re here to bridge the gap between your projects and those pesky but powerful KPIs that keep you on track, profitable, and ahead of the game.
Let’s dive in.
The Lowdown on KPIs
First things first, let’s break it down: what are KPIs? KPIs are numerical or qualitative measures that gauge performance in a given area. Picture them as the speedometers and fuel gauges on your AEC industry road trip. Lacking these metrics? Well, you’re essentially driving blindfolded, which is not only dangerous but also a one-way ticket to Nowheresville.
Leading vs. Lagging Indicators
Now, before you run off measuring everything in sight, it’s essential to understand the dynamic duo of KPIs: leading and lagging indicators. Picture these indicators as the yin and yang of your data analysis universe.
Lagging Indicators: Your Rearview Mirror
These are metrics that tell you where you’ve been. They’re the historians of your dashboard, capturing things that have already happened. Whether it’s win rates, project completion times, or past revenues, lagging indicators help you make sense of your historical data.
They’re like that old high school yearbook you dig out when you need to analyze how far you’ve come—or what hairstyles never to revisit.
Leading Indicators: The Crystal Ball
On the flip side, leading indicators are your early-warning systems. These metrics give you insights into future outcomes. Whether it’s a spike in website inquiries or an uptick in requests for proposals, leading indicators let you adjust your sails to catch that favorable wind.
They can provide advance notice on trends, enabling you to make course corrections before you hit that metaphorical iceberg.
Why Both Matter
Leading indicators help you navigate the tricky waters of future market conditions, while lagging indicators help you understand the wake your ship has left behind. Together, they guide your strategic choices, from landing the right projects to driving the adoption of new technologies.
Measuring both leading and lagging KPIs is not an either-or situation; it’s a harmonious marriage of hindsight and foresight. So, get your yin-yang in balance, and let’s dive into the most important KPIs you should be tracking.
5 Key Lagging Indicators: Lessons from the Rearview Mirror
1. Win % Insights: Your Business Scorecard
Win % Insights are your company’s highlight reel, showing you where you’re slam-dunking and where you’re dropping the ball. This isn’t about luck; it’s data you can bank on.
Calculating win percentages is like using a Swiss Army knife—you can get as specific as you want. For example, if you’re acing healthcare projects in Texas but flopping in Michigan school assemblies, it’s a clear sign of where to put your time and money. Think of it as figuring out where you’re the LeBron of your industry.
2. Project Win/Loss Analysis: Your Own Business Reality Check
Skip the post-loss Ben & Jerry’s binge. A project loss is actually a treasure chest of wisdom. Think of the Project Win/Loss Analysis as your own post-game press conference.
The goal is to dissect what went wrong—or right. Did you lose because of pricing, or did you win because your pitch was the emotional equivalent of a Hallmark movie? Knowing why you won or lost is like getting solid dating advice; it helps you tweak your moves for next time.
So, instead of sulking, treat each project, win or lose, as a learning experience. Turn failures into stepping stones and successes into benchmarks. That way, your next project won’t just be a rebound; it’ll be the start of something special.
3. Project Team Profitability: Your Fantasy Football, but with Dollar Signs
Your project team is your A-list squad, except instead of scoring touchdowns, they’re raking in profits. This isn’t just about tracking hours or ticking off tasks; we’re diving into the nitty-gritty ROI of each team member.
Are they clutch players setting you up for that end-zone dance of profitability? Or are they benchwarmers missing the mark? Knowing this helps you draft or cut team members wisely, optimizing your lineup for peak performance and financial wins.
So, if you want to take your team from backyard scrimmage to Super Bowl status, pay attention to Project Team Profitability. It’s how you assemble your business MVPs for the big win.
4. Revenue Insights: Your Business’ Financial Thermometer
Revenue isn’t just the scoreboard; it’s the whole ballgame. But unlike sports, you can’t just eyeball the numbers and call it a day. Revenue Insights helps you break down whether you’re on the fast track to Fortune 500 or taking a scenic route to mediocrity.
Is your revenue growth a one-hit wonder or the start of a platinum record? Are certain segments pulling in more dough than others? This is the stuff that’s more exciting than a triple espresso for finance folks and CEOs alike.
Think of Revenue Insights as your regular business wellness check. If the numbers are looking good, fantastic—keep doing your victory lap. But if they’re skewing in the wrong direction, it’s time for some course corrections. You know, like finally ditching that squeaky office chair that’s been driving everyone nuts.
5. Average Project Size: Your Business’ Sorting Hat
In the AEC game, size matters—but not how you might think. Whether you’re dealing in petite, high-value remodels or jumbo multi-unit developments, your average project size is your business’s personal sorting hat.
This KPI tells you where you shine. Are you the Picasso of tiny, intricate projects, or the Spielberg of blockbuster developments? Knowing this guides your efforts better than a GPS on a cross-country road trip. It helps you dial in your marketing, sharpen your proposals, and negotiate like you’ve got the cheat codes.
So, the next time you’re wondering what kind of projects to chase, just check your average project size. It’ll tell you whether you should be gearing up for a sprint or a marathon.
5 Key Leading Indicators: Your AEC Crystal Ball
1. Number of New Projects Created: The Scouting Report for Your Cash Flow
Let’s talk new projects, the rookies of your business world, and potentially your future MVPs—Most Valuable Projects, that is. These aren’t just numbers to tally; they’re the VIPs at your revenue party.
Break these projects down by value, industry, or whatever floats your business boat. Are you drawing in the cool crowd or the guy stuck playing “Wonderwall” on repeat? This helps you see which marketing channels are your Steph Currys, sinking every shot, and which are, well, left riding the pine.
This KPI isn’t just about counting projects; it’s about counting the right ones. Think of it as the bouncer of your sales funnel, checking the list and making sure everyone coming in vibes with your overall strategy. So, keep an eye on those newbies—they might just be tomorrow’s headline acts.
2. The Project Viability Suite: Finding Your Goldilocks Zone, Forecasting Your Future, and Cooking Up the Right Delivery Method
Ah, the “Project Viability Suite,” where we treat these three KPIs like they’re part of a finely curated tasting menu, each offering a distinct flavor but contributing to a harmonious overall experience.
The Goldilocks Zone: Value of Projects in Pursuit
Think of this as the appetizer, setting the tone for the whole meal. You don’t want to underwhelm or overwhelm, and this KPI helps you land in that just-right zone. Whether it’s a bustling tech park or a cozy residential complex, knowing the average value of the projects you’re courting lets you aim for the bullseye every time.
Your Financial Weather Forecast: Forecasted Project Revenue
Now we’re onto the main course, where the stakes are higher. The Forecasted Project Revenue KPI is your main dish, offering a hearty glimpse into your future earnings. It tells you if you’re set to be the Gordon Ramsay of your industry or if it’s time to revisit the recipe book.
The Chef’s Toolkit: Pipeline by Delivery Method
And finally, the dessert—the sweet finish that leaves a lasting impression. Knowing your delivery method options in advance is like deciding between a classic cheesecake or a daring molten lava cake. It prepares you to allocate the right resources and ensures you finish the meal—or project—on a high note.
3. Social Radar: Navigating the Networking Seas with Key Prospects and Clients
Let’s face it, business isn’t just about spreadsheets and PowerPoint slides; it’s a social game too. Your client interactions, or lack thereof, are a big deal. Consider this your social radar, helping you keep tabs on your business relationships.
You wouldn’t neglect your high school bestie when they’re in town, so don’t neglect those contacts that could be your next big project or referral source.
New Connections: Your Growing Social Circle
First up, the number of new contacts you’re creating. It’s like making new friends at a party but with more LinkedIn endorsements. These new connections are your future leads, partners, or even advocates. It’s like planting seeds today for a bountiful harvest tomorrow.
The Ghosted: Neglected Contacts
Then, on the flip side, there are neglected contacts—think of these as the ‘ghosted’ of the business world. You might’ve had a promising coffee meeting two years ago, but since then? Radio silence. This KPI shines a spotlight on these neglected contacts, reminding you to rekindle these relationships. Maybe they were just not that into your 2018 business model but will love what you’re doing in 2023.
4. The Project Time-Capsule: Tracking Your Out-of-Date and Inactive Gems
Meet the “Project Time-Capsule,” the KPI that ensures you’re not holding onto the business equivalents of your 90s beanie baby collection. These metrics help you shine a light on those neglected projects that you swore you’d finish, offering you a chance to either breathe new life into them or give them a dignified farewell.
The Eternal ‘Tomorrow’: Out-of-Date Projects
First, the infamous Out-of-Date Projects. These are the procrastinator’s bread and butter, perpetually pushed to “tomorrow,” which, as we all know, never comes. Each day these linger in your portfolio, they’re munching away at your profits, and not in a cute Gremlins way. Keeping track of these helps you not only reclaim lost profit but also improves data quality and user adoption. It’s a wake-up call to update those timelines and get the project back on track.
The Silent Money Drains: Inactive Projects
Then, we have Inactive Projects, the gym memberships of your business world. You’re paying for them in one way or another, but they’re just sitting there, collecting metaphorical dust.
Maybe you started them with great enthusiasm, but they’ve since fizzled out, like New Year’s resolutions in February. The key is to either kickstart these dormant projects back to life or officially retire them so they stop siphoning off your time, resources, and focus.
5. The Digital Roll-Call: User Logins as the Pulse of Tech Adoption
Investing in new technology without tracking user logins is like buying a state-of-the-art treadmill and then using it as an elaborate clothes rack. And let’s be honest, nobody wants to be that guy.
The True North: Why User Logins Matter
User logins are your true north in assessing how well your team is adopting new technology. If the login count resembles a bustling Times Square, you know your investment is paying off. However, if it’s looking more like a deserted ghost town, Houston, we have a problem.
The Remedial Action: Adjusting Training and Communication
Low login counts are a red flag that could mean a multitude of things: maybe the interface isn’t user-friendly, perhaps the team doesn’t see the value, or it could be that training was a snooze-fest.
Regardless, this metric gives you the info you need to adjust your training and communication strategy. Think of it as your opportunity to switch the teaching style from Ben Stein monotone to Bill Nye the Science Guy excitement levels.
Okay, it’s time to wrap this up like a burrito filled with wisdom and a dash of sass. We’ve sifted through the nitty-gritty to bring you the top 10 KPIs that every AEC firm should be best friends with—5 lagging indicators for when you’re feeling nostalgic and 5 leading indicators when you’re ready to conquer the future.
The Real Talk: KPIs are not just fancy jargon; they’re your GPS in the labyrinth of business. They tell you whether you’re navigating like a pro or circling the drain.
The Plug: Now, here’s where our product, TrebleHook, enters like a rockstar. It provides all these KPI measurements straight out of the box. No need to build from scratch; we’ve got you covered.
What’s Next?: Armed with TrebleHook, align these metrics to your firm’s rhythm. You’ll be less “garage band” and more “stadium tour” before you know it.
So, pop the champagne or, you know, a cold one with the team. Here’s to turning data into decisions and decisions into success. Cheers!