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Gulnaz Aksenova<\/a> recently shared with me a research paper that discusses business model innovation (BMI) in AEC consultancies in the age of AI. She and co-author Rich Synott CEng FICE<\/a> refer to several timely studies and examine why and how BMI is necessary to achieve a competitive advantage through the use of AI.<\/p>\n Boosting efficiency and cutting costs is not the right strategy for long-term advantage, the authors claim.<\/p>\n Labour-based, project-specific services have long dominated the AEC consultancy sector. The hourly billing model, coupled with procurement practices that prioritize the lowest cost over the highest value, has led to the commoditization of design services.<\/p>\n While firms have invested in technologies like BIM, these tools often serve to optimize outdated processes rather than enable fundamentally new ways of doing business.<\/p>\n As the paper notes, many firms are stuck in the \u201cmature stage\u201d of the business model lifecycle. Margins are thin, growth is slow, and new tech is mainly used to squeeze out small gains in productivity. As a result, the firms are more vulnerable than ever to disruption.<\/p>\n The authors argue that succeeding in the AI era requires two sets of capabilities: dynamic capabilities and coordination flexibility capabilities (CFCs).<\/p>\n Dynamic capabilities<\/strong> refer to an organization\u2019s ability to sense<\/em> opportunities, seize<\/em> them through investment and collaboration, and reconfigure<\/em> its structure to deliver new forms of value.<\/p>\n CFCs<\/strong> are what help turn those good intentions into real change. They enable teams to coordinate across silos, challenge old assumptions, and implement new strategies effectively.<\/p>\n In short, you might spot the opportunity, but without CFCs, you can\u2019t act on it.<\/p>\n These are not just theoretical concepts. I\u2019ve seen both in action during my tenure at the companies I\u2019ve worked for.<\/p>\n If you\u2019re running or advising an AEC consultancy, this means re-evaluating how your firm creates value. The paper offers several strategic recommendations:<\/p>\n The authors also emphasize that strong leadership<\/strong> is a critical prerequisite for CFCs and the delivery of intended outcomes. I have previously discussed <\/a>visionary leadership and its role as a key driver in innovative companies.<\/p>\n There\u2019s an important warning in this research: AI used purely to improve productivity won\u2019t differentiate you in a market where every firm has access to the same tools. <\/strong>True competitive advantage lies in creating new forms of value, rather than simply doing the same work faster.<\/p>\n If AEC consultancies are to thrive, not merely survive in the AI era, transformation must begin at the business model level, the paper suggests. This is challenging, for sure, but it may be the only path to a sustainable and differentiated future.<\/p>\n I recommend checking out the paper Business Model Innovation of Architecture, Engineering, and Construction Consultancies in the AI Era\u2019<\/em> and its insightful illustrations. It\u2019s available for download at the ICE Virtual Library<\/a>.<\/p>\n<\/div>\nWhy Traditional Models No Longer Work<\/h2>\n
From Capability to Competitive Advantage<\/h2>\n
Rethinking Value Creation<\/h2>\n
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Beyond Productivity<\/h2>\n