Digital Transformation and AI in A&E Offers Gains Beyond Productivity

The Architecture & Engineering industry is at a pivotal point in its digital transformation. Past technology shifts, from hand drafting to AutoCAD, and later from 2D drawings to 3D modeling and BIM, were absorbed with limited disruption to either’s fundamental ways of working or business models. Artificial Intelligence (AI) and advanced digital platforms represent a more consequential shift with the potential to reshape design, construction delivery, and client services.

In response, companies need to develop clear, targeted, and actionable digital strategies. These strategies need to support efficient project delivery and enhance traditional services with digital offerings that create new value. Successful implementation will depend on effectively leveraging younger, digitally fluent staff paired with the experience and judgment of senior professionals.

Emerging Technologies in A&E

ChatGPT (launched in November 2022) and similar large language models have been widely adopted into the workplace. Some reporting, data analysis and internal workflows have been streamlined as a result. However, the full impact of AI is still unfolding.  It is poised to further automate drafting, clash detection, quantity takeoffs, and design optimization and it is expected that generative design tools will soon be able to produce multiple design alternatives based on cost, performance, and sustainability.

Major software vendors in the A&E space are investing heavily in practical AI and should be expected to deliver AI-enhanced tools into the marketplace. Any A&E firm’s digital strategy, its hiring plan, skill development priorities, and business models should be developed within this context.

AI technologies are likely to increase efficiency but at significant cost. It is critical that firms look for opportunities to leverage these third-party platforms while adding value to their clients to cover the costs, expand their role beyond traditional project delivery, and improve margins.

Implementation of Third-Party Software: A Growth Opportunity

Management consulting firms recognized their clients’ need for support in implementation, configuration, and customization of third-party software in the 1980s and 1990s as Enterprise Resource Planning (ERP) and business software became more widespread. Over time, these companies evolved from business and strategy consulting into full-service technology consulting.

A&E firms did not, typically, exploit the same market. Only a small subset of the large A&E firms offered software implementation or configuration services. This usually occurred when the software was directly tied to their engineering domain (GIS, asset management, digital twins, infrastructure modeling) or when the client needed engineering expertise to configure the system (e.g., utility networks, transportation models).

A handful of boutique firms carved out successful practices implementing niche environmental data systems. These examples suggest a broader opportunity for A&E firms to provide advisory services bundled with software implementation, especially where domain expertise is essential to unlocking the full value of the technology.

Enhancing Data Interpretation and Decision Support Services

Clients increasingly face challenges not from a lack of data, but from an overabundance of it. Models, monitoring systems, and reporting tools generate large volumes of information that clients lack the time and skill to interpret and act upon. A&E firms are well positioned to translate this data into actionable insight with a combination of deep domain experience and technological expertise.

A&E firms can increase revenue by enhancing their data interpretation, visualization, and advisory services. This has the added benefit of allowing them to move upstream in the value chain. These services can support better client decisions and can lead to follow-on work for more traditional A&E services.

In-House Software Development: Lessons Learned

Although AI had not yet entered the public consciousness, some in the A&E industry recognized in the 2010s that growing efficiency from digital tools came at significant cost in a profession still largely compensated by the hour. Seeing the potential for recurring revenue and higher valuations, some firms developed their own software. Many of these efforts have struggled to achieve financial success. Firms often underestimated the investment required to build secure, scalable products and over-customized solutions for individual clients, limiting repeatability.

More fundamentally, the traditional A&E business model does not align well with the economics of software development. Engineering firms prioritize predictability, profitability, and steady growth, while software businesses focus on rapid scaling and narrow product focus. Firms should take a “buy before build” approach to technology, reserving any internal development for cases where there is a clear, strategic rationale and path to commercial success.

Managing Digital Innovation in the Workforce

Recent graduates enter the profession with strong digital skills and expect to use modern technology in their day-to-day work. Many are developing scripts, automations, and lightweight applications to improve the efficiency and quality of service delivery and to offer services directly to their clients. Low-code, no-code, and AI-enabled platforms are accelerating this trend.

To capture the benefits while managing risk, firms should consider formal “citizen development” programs. An effective citizen development program provides governance, training, guidelines, and tools to A&E professionals (Citizen Developers) who are developing software. Expertise is provided by experienced software architects and developers.

The benefits are that a catalogue of citizen-developed tools can be generated. Effective tools can be standardized and distributed throughout the organization. Low value, duplicative, and excessively risky tools can be retired. Without this type of structure, firms risk investing in tools that are difficult and costly to maintain, insecure, or not scalable.

From Ad Hoc Adoption to Strategic Discipline

Technology adoption in many A&E firms remains opportunistic, driven by grassroots enthusiasm or the demands of specific client engagements. While this can foster innovation, it can also result in fragmented investments and tools that persist long after their strategic relevance has diminished or the commercial value proved to be limited.

Effective digital strategies are specific, easily understood, and anchored by clear objectives and measurable key performance indicators (KPIs). They emphasize disciplined initiative selection and continuous evaluation, while recognizing that meaningful learning occurs through execution. Organizations must retain the flexibility to incorporate lessons learned, adapt to emerging technologies, and refine the strategy over time. Attempting to define every detail upfront is both impractical and counterproductive.

Speed is critical. Leaders must empower informed and knowledgeable staff to make quick decisions, avoid unnecessary bureaucracy, and actively support execution. A culture of learning, not blame, is essential.

Regular reviews help ensure that technology investments remain aligned with business goals. Equally important is the willingness to discontinue initiatives that do not deliver sufficient value, regardless of sunk costs.

Architecture and engineering firms are entering a new phase of digital transformation. Unlike earlier technology shifts, AI and advanced digital platforms have implications that extend beyond productivity into service models and value creation.

The opportunity is to embrace the enthusiasm, curiosity and technological competence of younger, less experienced staff and couple it with the business-savvy and experience of more seasoned professionals to identify niche opportunities with clients who are overwhelmed by the volume of data they receive and lack the time or expertise to interpret and act on it. The greatest return on investment will likely come from solutions that combine domain experience with technology that can be codified into a standardized, repeatable framework that is configurable across a large number of clients.

Firms that manage innovation with discipline will be more likely to be successful. Just because something can be done does not mean it should be. Each prospective opportunity must be evaluated with a clear understanding that both time and capital are finite and must generate measurable returns. There should be focus on solutions that can produce repeatable revenue, strong margins, and rapid time-to-value and the discipline to cut losses and abandon those that don’t fulfill their promise. This will ensure that companies focus on offerings with sustainable impact, clear market demand, and alignment with the firm’s growth objectives

Alison Jones is a business and technology executive with more than 30 years of experience in the Architecture and Engineering industry. She has led operations, digital transformation, and global technology initiatives. Her focus is on aligning technology investment with business outcomes and client value. Formerly with Arcadis, Alison is currently the CEO of Order Penguin, an AI-powered equipment rental platform.

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