The design institute is transforming into an engineering company; 4 issues need to be addressed urgently

Update old concepts and unify understanding of development. Transformation is a process of change; the first thing that needs to be addressed is the issue of attitudes. That is, everyone within the company must clearly recognize the necessity of transitioning from a design firm to an engineering company, as well as the difficulties involved, and work together to overcome these issues. In the early stages of a design institute’s transformation, due to a lack of experience, disconnects among design, procurement, and construction are inevitable; however, the root cause often lies in the lack of consistency in perspectives among the employees within the company. Even within the senior leadership team, there is uncertainty regarding whether general contracting is the company’s future direction of development. Under such circumstances, whether it is the design of the internal organizational structure, the infrastructure for managing general contracting operations, or the personnel and technical support for general contracting projects, there will be a lack of clarity and relative chaos. To address conceptual issues, it is necessary to focus on the shift in design awareness. As design institutes that originated from the traditional public institution system, they tend to have a certain degree of conservatism in their mindset. This is typically reflected in their design approaches: they prioritize responsibility and place excessive emphasis on safety factors, while paying less attention to costs ； Design institutes have an overly strong sense of technical superiority, which leads them to ignore design optimization suggestions from clients or contractors. As an engineering company, one of the key sources of profit in general contracting is reducing costs through design optimization, with an emphasis on giving full consideration to the economic viability of the solutions. Even as competition in the design industry intensifies, future clients will tend to focus more on return on investment and pay greater attention to costs. All of these pose an urgent need for a shift in design awareness.

Optimize traditional designs to improve operational efficiency. The advantage of carrying out EPC projects with design as the core lies in the ability to minimize investments and reduce project implementation costs through design optimization； Through the rational arrangement of design plans and the implementation of constructability-driven design, procurement and construction schedules are effectively coordinated, enabling deep integration of design, procurement, and construction processes and thus reducing the project construction time ； The design institute has a thorough understanding of the technical characteristics of the project, enabling it to approach the project in an integrated and systematic manner; this facilitates guidance during construction and commissioning, and ensures optimal overall technical performance of the project. However, to transform into an engineering company, a design institute must possess the following design capabilities: overall planning ability, cost control ability, procurement control ability, construction organization ability, and communication and coordination skills.

Adhere to the talent strategy and re-plan traditional design institutes; over 80% of their staff are professional technicians, resulting in a relatively homogeneous talent structure. However, international engineering companies need more interdisciplinary talents. Taking mature and successful domestic and international engineering companies as examples, for engineering firms that focus on design, the proportion of designers is generally kept around 60%, while there is a need to hire a large number of staff in areas such as business, procurement, construction, and project management. How to fill the gap in the talent structure is a major challenge facing design institutes undergoing transformation at present. It is impractical to rely entirely on external sources in terms of cost and personnel management. Furthermore, some management positions (such as procurement) require a high level of expertise to be carried out effectively, and it is difficult to find suitable candidates simply by recruitment. Therefore, for large design institutes, it is necessary to consider establishing career paths in project management alongside traditional professional and administrative pathways. By designing reasonable and incentive-based human resources policies, these institutions can encourage some designers to voluntarily shift their career directions; this, combined with the recruitment of external talent, can help to achieve a smoother transformation in the talent structure.

Standardizing basic management and optimizing project operations: For design institutes, transitioning into engineering companies requires the improvement of various management capabilities, such as project management skills, business and legal expertise, professional procurement and subcontracting management abilities, as well as skills in information technology development and utilization. These represent new challenges for traditional design institutes, and companies need to address them by making plans and allocating resources, just as they do when focusing on the development of their core professional services. Among these, project management capability is the most urgent aspect.

It seems that the poster is the main character in the engineering company, explaining issues in a simple and clear way: victory:

It seems Professor He gave us a similar lecture

It seems the poster is a dean-level figure! Look at issues with a long-term perspective! :victory:

Read a little at a time; as long as you gain some insights or learn something, that’s enough.

2.jpg The transition of design institutes into engineering companies: 4 issues that need to be addressed urgently ——Zhi Zhe Ming. In an increasingly competitive field of survey and design, it is an undeniable fact that international engineering companies represent the future development direction for large-scale design institutes. In recent years, the proportion of revenue generated from EPC projects in large domestic survey and design firms has been on the rise. In industries such as power, metallurgy, pharmaceuticals, and chemicals, where transformation occurred earlier, EPC has gradually become the dominant model for project construction. However, for many small and medium-sized design institutes, the process of transforming into engineering companies is fraught with difficulties, and even after the transformation, there are numerous operational and management obstacles that are difficult to overcome in the short term. To achieve a smooth transition from a design institute to an engineering company, managers need to pay close attention to and address the following four issues. 1. Standardize basic management and refine project operations. For design institutes, transitioning into engineering companies requires the improvement of various management capabilities, such as project management skills, business and legal expertise, professional procurement and subcontracting management abilities, as well as skills in information technology development and application. These represent new challenges for traditional design institutes, which need to allocate plans and resources to address them with the same emphasis given to the development of their core professional services. Among these, project management capability is the most urgent aspect. 2. Adhere to the talent strategy and re-plan traditional design institutes; over 80% of their staff are professional and technical personnel, resulting in a relatively homogeneous talent structure. However, international engineering companies need more interdisciplinary talents. Taking mature and successful domestic and international engineering companies as examples, for engineering firms that focus on design, the proportion of designers is generally kept around 60%, while there is a need to hire a large number of staff in areas such as business, procurement, construction, and project management. How to fill the gap in the talent structure is a major challenge facing design institutes undergoing transformation at present. It is impractical to rely entirely on external sources in terms of cost and personnel management. Furthermore, some management positions (such as procurement) require a high level of expertise to be carried out effectively, and it is difficult to find suitable candidates simply by recruitment. Therefore, for large design institutes, it is necessary to consider establishing career paths in project management alongside traditional professional and administrative pathways. By designing reasonable and incentive-based human resources policies, these institutions can encourage some designers to voluntarily shift their career directions; this, combined with the recruitment of external talent, can help to achieve a smoother transformation in the talent structure. 3. Update old concepts and unify understanding of development. Transformation is a process of change, and the first issue that needs to be addressed is the aspect of mindset – both those at the top and bottom of the company must clearly recognize the necessity of transitioning from a design firm to an engineering company, as well as the difficulties involved, and work together to overcome these issues. In the early stages of a design institute’s transformation, due to a lack of experience, disconnects among design, procurement, and construction are inevitable; however, the root cause often lies in the lack of consistency in perspectives among the employees within the company. Even within the senior leadership team, there is uncertainty regarding whether general contracting is the company’s future direction of development. Under such circumstances, whether it is the design of the internal organizational structure, the infrastructure for managing general contracting operations, or the personnel and technical support for general contracting projects, there will be a lack of clarity and relative chaos. To address conceptual issues, it is necessary to focus on the shift in design awareness. As design institutes that originated from the traditional public institution system, they tend to have a certain degree of conservatism in their mindset. This is typically reflected in their design approaches: they prioritize responsibility and place excessive emphasis on safety factors, while paying less attention to costs ； Design institutes have an overly strong sense of technical superiority, which leads them to ignore design optimization suggestions from clients or contractors. As an engineering company, one of the key sources of profit in general contracting is reducing costs through design optimization, with an emphasis on giving full consideration to the economic viability of the solutions. Even as competition in the design industry intensifies, future clients will tend to focus more on return on investment and pay greater attention to costs. All of these pose an urgent need for a shift in design awareness. 4. Optimize traditional designs to enhance operational efficiency. The advantage of carrying out EPC projects with design as the core lies in the ability to minimize investments and reduce project implementation costs through design optimization ； Through the rational arrangement of design plans and the implementation of constructability-driven design, procurement and construction schedules are effectively coordinated, enabling deep integration of design, procurement, and construction processes and thus reducing the project construction time ； The design institute has a thorough understanding of the technical characteristics of the project, enabling it to approach the project in an integrated and systematic manner; this facilitates guidance during construction and commissioning, and ensures optimal overall technical performance of the project. However, to transform into an engineering company, a design institute must possess the following design capabilities: overall planning ability, cost control ability, procurement control ability, construction organization ability, and communication and coordination skills.

I believe that design firms focus on the aspect of design, while higher-level management emphasizes the management of design processes. Engineering companies, on the other hand, concentrate on project management. These two areas belong to different categories; in terms of management, they are also not within the same sphere. Engineering is a multifaceted field – aside from technical expertise, project management places more emphasis on organizational skills, communication abilities, and coordination skills. In terms of the objects of study and service, design firms mainly provide design documents and drawings, transforming the client’s requirements into more detailed and professional documents. Engineering companies, meanwhile, turn designs into tangible products by allocating funds for their implementation. Of course, there are also aspects such as market analysis and business forecasting. In short, engineering companies must serve their clients wholeheartedly. From a conceptual standpoint, engineering requires a systematic, end-to-end, and comprehensive approach, whereas design tends to be more independent and specialized.