2018 September Consulting Matters

SPRING 2018

Industry Convergence

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Arts West Redevelopment Project, University of Melbourne

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New consultancy models emerge as industry boundaries blur

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Convergence and the Internet of Things

click here to register wednesday, 10th october 2018 park hyatt melbourne, victoria 6:30pm til late • black tie

Consulting Matters

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CONTENTS

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Arts West Redevelopment Project, University of Melbourne Industry updates Industry updates

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New members

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What’s happening in Consult Australia

Solving plastic pollution: not just an environmentalist’s problem

New consultancy models emerge as industry boundaries blur

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Should you merge your firm? Probably!

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Strategy: should we stick to our knitting or diversify?

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Business essentials

From the President

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From the CEO

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Division updates

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Saving for your first home?

There's a new scheme in town

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Understanding Slip Resistance Laws

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Corporate Social Responsibility

Features Smart technologies are redefining infrastructure. Is this change an opportunity or challenge for our sector?

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Solving plastic pollution: not just an environmentalist’s problem

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The Move to Multidisciplinary Practices – What to consider from an insurance perspective

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Convergence and the Internet of Things 15

RedR Report: Martin O'Malley

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Project case study Arts West Redevelopment Project, University of Melbourne

Not a member of Consult Australia?

To find out more about how your firm can benefit from membership contact Consult Australia on (02) 8252 6700 or email membership@consultaustralia.com.au www.consultaustralia.com.au

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Consulting Matters

Industry updates

Industry updates APPOINTMENTS James Phillis has been appointed Chief Executive Officer, SMEC ANZ, following the appointment of Hari Poologasundram as CEO SMEC and CEO International, Surbana Jurong Group in March 2018. James has been a key member of SMEC’s leadership team since 2014, beginning as Regional Director (NSW/ACT) before being promoted to Chief Operating Officer of SMEC ANZ in September 2017.

Ian Ball has been appointed as CEO and Managing Director of Cardno. Ian has more than 30 years’ international experience in consulting and professional services in the fields of financial services, technology and innovation, and government. Ian, who began his career as a quality engineer for the Ford Motor Company, has developed international leadership experience in Australia, North America and Europe working with companies like IBM, Ernst & Young, Bain & Company and SilverLake Private Equity.

Aurecon has appointed Keith Chong (top left) as a Client Director for Infrastructure in Asia to meet the region’s increased demand. This increased activity, along with changing demographics, rapid urbanisation, technological disruptions and evolving customer expectations, is placing greater pressure on infrastructure projects in both government and private sectors. Based in Hong Kong, Keith will complement and collaborate with Scott Smith, who holds a parallel role as Client Director for Infrastructure in Asia. An expert in tunnelling, Scott has spearheaded Aurecon’s infrastructure market in Asia since 2015 and been involved in a wide variety of infrastructure projects such as the South Island Line in Hong Kong.

Former Infrastructure Australia Chief Executive, Philip Davies, has joined Deloitte Australia as a Financial Advisory partner in the firm’s infrastructure team, based in Sydney. Phil took up the role in September following the end of his three-year term at Infrastructure Australia and has also been appointed as the new Chair of the Australian Logistics Council and Chair of the University of Wollongong's SMART Advisory Council.

Aurecon has appointed Tim Spies as Global Service Leader, Building Mechanical, to connect the company’s global community of mechanical engineers and consultants. Having been involved in many high-profile projects including the Barangaroo development in Sydney, Tim will bring both business and technical leadership expertise to Aurecon with his role also encompassing Client Director-Commercial Property.

SLR Consulting has appointed Dehlia Goundrey as its new Environmental Principal and Western Australia Manager.

Dehlia has over 20 years’ experience in environmental management and sustainability within the transport, resource, utility and land development sectors in both WA and the UK. Arcadis has announced the appointment of Jonathan Taylor as its Australian Chief Financial Officer. Jonathon joins Arcadis with over 30 years’ experience with Fortune 500 companies and various high-profile brands across Australia, Europe, the Middle East and Asia.

Aurecon has appointed structural engineer and design scholar Evelyn Storey as Regional Director-South East Queensland. Evelyn will drive the strategic direction of Aurecon’s South East Queensland business, be responsible for overall operations including leading a team of 600 staff and progress her team’s unrelenting focus on bringing clients’ ideas to life.

Former VicRoads Chief Executive, John Merritt, has joined Arup as an Adviser.

John will work closely in the collaboration between Arup’s Transport teams and Australasia’s government operations to strengthen the development of road user policies, long-term strategic project planning and outcome-led solutions across the transport network. Prior to VicRoads, John held roles as the CEO of the Environmental Protection Authority Victoria, Executive Director of WorkSafe Victoria, and CEO of the National Safety Council of Australia.

Anna Chau has been appointed Acting Chief Executive of Infrastructure Australia and continues as the Executive Director of Project Advisory. Anna leads the on-going development of the national Infrastructure Priority List (IPL) and the assessment of project business case submissions which are considered by the IA Board for the IPL. Paul Goldsworthy has joined SLR Consulting’s Townsville office in the Marine Sciences team. A marine ecologist with over 30 years’ experience, Paul specialises in the assessment and analysis of ecological constraints for pre-feasibility and front-end engineering design for major infrastructure projects in, and adjacent to, the marine environment.

Aurecon has welcomed CK Tsang as a key member of its infrastructure business.

CK joins the company as Technical DirectorInfrastructure and brings 20 years of experience in the industry. As a project manager and director of tunnelling, metro and highway projects, he has worked on many world-renowned tunnelling projects. These include using the world’s biggest subsea tunnel boring machine (TBM) for the Tuen Mun-Chek Lap Kok Link project in Hong Kong, and the world’s longest immersed tunnel (6 km) linking two man-made islands for the Hong Kong-Zhuhai-Macao Bridge project in China.

Industry updates

SLR Consulting has welcomed Giorgio De Nola as Principal Consultant–Toxicology /Risk Assessment in the Land Quality and Remediation team in Melbourne. Giorgio is an experienced environmental chemist and toxicologist with almost 30 years’ experience and is proficient at preparing Human Health Risk Assessments and Ecological Risk Assessments consistent with the latest Australian guidance for risk assessment from enHealth and management of contaminated sites (NEPM).

Aurecon has strengthened its communication and stakeholder engagement capabilities through the appointment of six new leaders across the company’s global Advisory arm throughout Australia and New Zealand welcoming: Nicole Walton as Regional Service Line Leader, WA; Christine Ammunson as Global Lead Strategic Communications; Carol Greensmith as Regional Service Line Leader, New Zealand; Fleur Laurence as 2IC Regional Service Line Leader, NSW/ ACT; Tebogo Sebego as Global Lead Social (based in Tshwane, South Africa) and Belinda Coleman as Regional Service Line Leader, QLD/NT. SLR Consulting has appointed Richard Simmons to their growing Civil and Structural Engineering team in Brisbane, to assist in expanding and diversifying SLR’s services in surface water management.

Prior to joining SLR, Richard was a Principal Engineer at Brisbane City Council, where he was involved in flood planning and policy.

KBR has appointed Kathleen March as Digital Strategy and Delivery Manager for Australian Infrastructure Services. Kathleen will lead KBR’s digital engineering strategy and brings with her nearly three decades of experience in IT, Systems and Data Management having previously worked in a number of senior IT roles at Worley Parsons, Advisian and Queensland Law Society.

Consulting Matters

OTHER SMEC’s Urban Design team leader in Melbourne, Carolina Isfer, has received the honour of being selected as a member of the Urban Development Institute of Australia (Victoria) Women in Property Committee for the 2018-2020 season. Caroline will join 14 fellow committee members with the responsibility of promoting greater engagement, representation and exposure for women in the industry.

Editor Mark Rock

President Kiri Parr

Chief Executive Officer Megan Motto

Arcadis has released its first Reconciliation Action Plan (RAP). Endorsed by Reconciliation Australia, the Innovate RAP, contains a detailed and transparent range of strategies, targets and measurable actions they will take over the next two years to make a positive impact on Aboriginal and Torres Strait Islander employment at Arcadis and broader cultural change.

Aurecon’s Regional Director for South Australia and Victoria Louise Adams will join talented leaders from across the world to hone best-practice business approaches after receiving a prestigious scholarship to the internationally acclaimed Wharton School at the University of Pennsylvania.

The 2018 Chief Executive Women (CEW) Scholars awarded Louise the scholarship in recognition of her commitment to increasing diversity and inclusion in the male-dominated engineering profession.

Executive Assistant to CEO Eric Yang

Accounts Guillaume Marchand

Director – Membership & Commercial Services Kisanne Dulin

Director State Operations Manager SA & NT Jan Irvine

Director – Policy & Government Relations Nicola Grayson

Policy Advisor James Robertson

Marketing Manager Mark Rock

Corporate Designer Voltaire Corpuz

Administration Assistant Samira Yaldo

Editorial submissions mark@consultaustralia.com.au

Advertising enquiries info@consultaustralia.com.au Consulting Matters is produced by Consult Australia. Phone: (02) 8252 6700.

Website: www.consultaustralia.com.au

NEW MEMBERS (since June) SMEC’s client Salini Impregilo has won a prestigious Engineering News-Record Global Best Project award for the Sydney Metro Northwest– Skytrain (SMNW SVC).

The SMNW SVC Project Team is made up of experts across the globe with SMEC taking the role of Design Lead on the innovative, award-winning rail project.

DEP Consulting Pty Ltd Ian McIntyre & Associates Pty Ltd MBB Consulting SY Structures Venant Solutions Verstand Group

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Consulting Matters

Industry updates

From the President Have you listened to a futurist recently?

The most recent talk I had the pleasure of listening to came from the eminently entertaining Tim Urban of "waitbutwhy".

So, on a far more prosaic day to day level in the next few years:

I now have jangling through my head ideas of:

• I t is not enough to be a good engineer or quantity surveyor or any other profession any more, it is whether you can bring your skills to the table together with a suite of other skills that can meet the challenges before us.

• What if synthetic meat became a reality in the next decade. That would fundamentally change land use and transportation around the world. And would people still eat meat from a living animal. And then I really start going down a rabbit hole of what meat is OK to eat in the safe knowledge that it doesn’t come from a living animal.

• What if Artificial Super Intelligence becomes real really soon, as opposed to the Artificial Narrow Intelligence that we currently have lots of examples of. Will that ASI be compatible with humanity? ...and in the context of this issue about convergence, what we are engaging in is an examination of all the emerging possibilities that are coming from our age of digital disruption

• Our industry will be disrupted.

•T he skills you need at the table will be more diverse than ever before – bringing all of the things we possibly can do to the table (the technical input) mixed with whether we should do it (leadership) and how you should do it (human centred design).

Added to which I must say I loved Tim's advice about what the world will need in future more ethicists and philosophers.

So be curious and enjoy the ride.

Kiri Parr President

SAVE THE DATE 20-21 February 2019 Luna Park, Sydney

Industry updates

Consulting Matters

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From the CEO Each year at our Leaders Conference we refer to an old African proverb which states; “If you want to go fast, go alone, but if you want to go far, go together”.

Whilst when originally brainstorming the theme for this issue, I was thinking about convergence in the context of the continued march of mergers/acquisitions in our sector, I’m instead going to talk about a few examples of how our leaders are standing together to make meaningful change that will affect the entire industry.

On a chilly Canberra morning in late June, a handful of CEO’s, Managing Directors and other senior leaders in our sector gathered at Parliament House to participate in Consult Australia’s second annual Policy Dialogue. Together they met with a number of politicians and senior bureaucrats to represent our sector as a collective voice for action. Speaking on issues ranging from procurement to innovation to building product compliance and regulation, they collectively championed members views to policy makers.

I realise that many of our larger members in particular have the resources and capacity to meet with politicians in their own right (and they do), however it is when they come together that they convey the most powerful message. Ministers (and Shadows) clearly sit up and listen with fresh interest when the combined voice of our industry is galvanised around issues of common concern.

The day was a great success, with several senior policy makers seeking to follow up matters of interest to Consult Australia.

On the 29th of August, the Consult Australia Male Champions of Change came together to continue the important work they are doing to support the improved participation and promotion of women in our sector.

Once again, a committed group of leaders spent an entire day to learn from each other, continue a concerted path of action, and hold themselves and each other accountable for maintaining the momentum on equality and inclusion in their firms.

At the lunch to celebrate our annual Progress Report they were joined by doyens of our sector, international leaders, the CEO’s of Engineers Australia and RedR Australia, the Victorian Chief Engineer and over 160 others who were keen to hear about the work of the group.

Our keynote speaker, Laurice Temple blew the audience away with her presentation emphasising that we must connect our heart and our head on this issue and be both courageous and vulnerable if we are going to address the humanity of our industry.

The Champions have also come together with me in a collaboration with The Warren Centre for Advanced Engineering to promote our work and its importance which we will be sharing with members over the coming months.

In the competitive world of consulting, these leaders have come together to learn from,

On the 29 th of August, the Consult Australia Male Champions of Change came together to continue the important work they are doing to support the improved participation and promotion of women in our sector. Once again, a committed group of leaders spent an entire day to learn from each other, continue a concerted path of action, and hold themselves and each other accountable for maintaining the momentum on equality and inclusion in their firms.

support and encourage each other with genuine humility and authenticity. Many times I have heard them quote another famous proverb… ”the rising tide lifts all boats”. I am so proud to witness not only their individual commitment, but the spirit of collaboration with which they come to the table.

I hope it is this same spirit of support and collaboration (and yes, a bit of healthy competition) that will see many of you join me at this year’s Awards for Excellence at the Park Hyatt in Melbourne. It’s shaping up to be a fabulous night to celebrate our success.

Megan Motto Consult Australia

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Consulting Matters

What’s happening at Consult Australia

Division Updates With varying market conditions around the country Consult Australia’s state and territory managers share their insights on key challenges and opportunities for our member firms.

QLD

Jillian Carney Advocacy work in Queensland continues apace and we can report on a number of advocacy areas that are the current focus of the Queensland committee;

breakfast providing an update on the State Infrastructure Plan, part B, with Infrastructure Australia Queensland and Engineers Australia.

Check out our webpage for all upcoming networking, events and training.

Labour Hire Licensing Scheme QLD With the release of the Labour Hire Licensing Bill in 2017 Consult Australia wrote to the Minister for the Department of Employment and Industrial Relations raising concerns with the definition of a provider of labour hire services in the Bill. With the release of the Regulations on 16 April Consult Australia received confirmation that professional secondees are not intended to be captured within the Scheme. However, in July following meetings between Consult Australia and the Department of Employment and Industrial Relations it became clear that there are a number of contractual areas that will capture staff working for consulting firms. As a result, a Practice Note has been published to provide guidance to members.

For more information please click here to visit the Consult Australia website.

Model Client Policy Consult Australia Model Client Policy has landed well in Queensland.

With acknowledgement in writing from the Department of Premier & Cabinet, confirmation from the Department of Housing & Public Works that it will form the basis of their new Supplier Code of Conduct, and a number of agencies requesting that we provide feedback on how they measure against the model client principles.

The Model Client policy has also formed the basis of our recent submission on Procurement for Small Businesses.

Department of Transport and Main Roads We continue to foster a working relationship with the Department of Transport and Main Roads through quarterly meetings with the Senior Executive team. Items discussed include Procurement Models, BIM and Digital Engineering project outcomes, and a two (2) year Transport plan published to industry. Whole of industry briefings held in early August on TMR QTRIP saw Consult Australia acknowledged in speeches for the lobbying work we’ve undertaken and our engagement in assisting the departments future strategy and procurement practices.

So, what else have we been up to?

We provided a submission on Waste Management Paper through the Department of Environment and Heritage Protection. We have collaborated with QMCA on a proposal to Brisbane City Council on incentivising tender bids for Brisbane Metro. We have collaborated with Engineers Australia on running a number of workshops on Project Bank Accounts and on 31 July we jointly hosted an industry

State Infrastructure Update Breakfast. Working collaboratively with Engineers Australia, Infrastructure Association Queensland.

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What’s happening at Consult Australia

VIC

Nicola Grayson The Office of the Chief Engineer of Victoria is developing a report on the state of engineering in Victoria. Consult Australia was invited to discuss the report and provide input into its development. We have provided feedback on skills and capacity, based on our skills survey results, and the key challenges for the sector.

The Victorian Division Committee is working on a Victorian Election platform to be shared with Parliamentarians. This will include the following recommendations for the policies that Consult Australia would like to see embedded in Government policy: • Adoption of Consult Australia’s Model Client Policy; • Establishment of a Centre for Procurement Excellence; • A new Infrastructure Innovation Fund; • Create a 30-year State Development Strategy; • Incorporate placemaking principles into the Victorian planning system; • A strategy to encourage more people into built environment careers; • A strategy to encourage rollout of ‘digital engineering’ in Victoria.

The Division Committee continues to monitor the progress of the Engineers Registration Bill in Parliament, which if passed will introduce a mandatory registration system for engineers in Victoria.

The legislation has passed its first and second reading in the Legislative Assembly, but (at the time of writing) has yet to be debated in the Legislative Council. Parliament’s last sitting day before the election is Thursday 20 September 2018.

Upcoming Events: SEP 24: Fireside Conversation with The Hon David Davis MLC, Shadow Minister for Planning, Public Transport, Metropolitan Region SEP 27: FutureNet Professional Development Session: Improved Social Outcomes Please see the website for more upcoming events here.

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WA

Steve Coghlan The recent launch of Consult Australia’s Model Client policy has provided a great opportunity to constructively engage with key WA Government Clients, such as Building Management and Works, Main Roads and others, as we continue to push for fairer contracts for our members and the broader built environment. As a follow-on from our recent WA focused submission to the Langoulant Inquiry, this key national policy platform outlines key issues and areas of concern of relevance when working with aforementioned WA Government clients. Further to discussions through normal industry advisor group channels we have also recently made a submission to the Industry Advisory Group’s Security of Payment Reform (SoPR) and met with their Chair, Mr John Fiocco, to discuss many of the issues highlighted within the Model Client policy.

Again, this information has been well received and we are thankful for the opportunity to be able to provide information to the SoPR and other initiatives for which the current WA Government should be commended. To that end special mention and thanks to Nicola Grayson, Consult Australia Director of Policy and Government, who has provided copious amounts of quality assistance and support of late to us here in the West. Nicola’s valuable leadership, support and assistance in what we are trying to achieve for our members here in WA is greatly appreciated by all concerned.

As Consult Australia’s Model Client policy gains traction, and the push to improve the current contracting environment within State continues, we very much look forward to continuing our collaborative work with all concerned.

Events wise our annual combined Consult Australia and FutureNet event within WA occurred at the end of August. Focusing on the challenges and opportunities of Smart Cities, this was another excellent and well attended event.

To find out more on what events are happening in WA you can visit our website here, and you can download a copy of our aforementioned Model Client policy here.

As always feel free to email us at wa@consultaustralia.com.au for any further information.

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Consulting Matters

What’s happening at Consult Australia

SA

•P roviding policy advice, relating to infrastructure planning, delivery and use, including advice on appropriate funding and financing models.

Jan Irvine Consult Australia has long advocated for infrastructure bodies in each state and territory as part of a nation-wide approach to infrastructure planning and delivery and the SA Division included a specific call for the creation of Infrastructure SA. It was therefore pleasing to see the Liberal State Government introduce the Infrastructure SA Bill 2018 to parliament on 20 June.

Our priority now is understanding the makeup and setup of Infrastructure SA, and how it will assess, prioritise and progress major infrastructure projects in SA. We must have the right infrastructure body. This means a reporting mechanism to Parliament, as opposed to the Premier; a long-term plan developed, and project priority list published; and alignment with Infrastructure Australia on project assessment. To date limited detail on the above has been forthcoming.

It has however been announced that Infrastructure SA will undertake four key activities:

The Infrastructure SA Board will combine the expertise of the public and private sectors in developing our major infrastructure plans for the future.

The Board will be led by an eminent independent chair and three independent, non-executive directors with industry experience and relevant qualifications.

The Board will also include Chief Executives of core agencies—the Department of the Premier and Cabinet, the Department of Treasury and Finance and the current Department of Planning, Transport and Infrastructure—as ex-officio members.

The delivery of Infrastructure SA continues to sit with the Premier.

Meetings with both the Minister for Transport, Infrastructure and Local Government’s Chief of Staff and Senior Advisor have not provided further detail. Members will be updated as information on Infrastructure SA becomes available.

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• Developing a 20-year State Infrastructure Strategy using consistent and robust analysis from public sector agencies and infrastructure providers. This plan will be renewed every five years and will set the long-term vision for South Australia’s infrastructure.

• Developing annual Capital Intentions Statements that will prioritise potential major projects for government decisions over a five-year time horizon.

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• Maintaining oversight of delivery and performance for all projects with a capital value of $50 million and over.

NT

Jan Irvine The Department of Infrastructure, Planning and Logistics (DIPL) and Consult Australia Working Group quarterly meeting was held 11 July.

Issues discussed included: • DIPL currently trialling a post tender feedback chart. Trial material used by Department of Trade, Business & Innovation (DTBI) since October 2017 has been adapted to DIPL current VFT templates.

Generally, this has been well received however DIPL is revising this format to make terminology clearer and headings in different order to encourage tenderers to read the document. It is important to note these charts are not being used for Tier 2 procurements or for procurements with less than four fully assessed offers. The Department would be very pleased to receive any comments or feedback from our members • Advised DIPL are taking carriage for street light management and maintenance and as a result will be looking to consultancies for asset management of same.

• Review recommendations following the inquest into the Tiger Brennan Drive fatality are now driving changes to traffic management plans and there will be an increased focus on Safety in Design on projects • Action being taken to ramp up the Project Management Office.

Again, as information becomes available Consult Australia members will be advised via the working group meetings

The Division also meets regularly with the General Manager Infrastructure, Investment and Contracts Infrastructure, DIPL. Our most recent meeting was held 15 August and discussions included the forward pipeline of projects with Consult Australia reiterating the importance to industry that the pipeline is published well in advance to allow businesses to plan ahead to ensure capacity and capability – especially given the booming markets in some states were adding additional pressure on availability of skills to the local market.

A Boardroom Breakfast with the Buy Local Advocate, Mr Denys Stedman was held mid-August to gain a better understanding of the role, and clarity on how local content and benefits are identified, considered and evaluated at all stages of the procurement and contracting lifecycle. Also discussed mechanisms established to measure effectiveness and quantifiable items for assessment at the tender stage, and what this means for consultants.

The Hon Eva Lawler MLA was recently appointed Minister for Infrastructure, Planning and Logistics and Minister for Environment and Natural Resources. The Department of Infrastructure, Planning and Logistics released its Strategic Plan 2018-2021 on 24 July, which outlines the Department’s direction for the next three years.

A Boardroom Breakfast is being held on 18 September with the Minister to discuss the objectives of the Plan.

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What’s happening at Consult Australia

NSW

Jody McGann Since our last update, the NSW Division of Consult Australia has been busy working on a number of key state advocacy issues and ensuring our members have access to and connect with key stakeholders and influencers in the built and natural environment.

The NSW Division has promoted and continues to promote our Model Client Policy across key government agencies and with key State Ministers and Opposition. We met with Mr Clayton Barr, Shadow Minister Finance to discuss the Model Client Policy in detail and provided Mr Barr with insights into the challenges and barriers faced by the Consulting Industry with regards to NSW’s current approach to procurement. We also had the opportunity to present the Model Client Policy at the Local Government Procurement Engineering Workshop.

Over the last three months, we have continued to work closely with Transport for NSW (TfNSW) through our quarterly engagement meetings where we have had the opportunity to raise issues and concerns around procurement and contract conditions and also gain valuable insight into key issues and priorities for the agency. We are gaining traction on a number of contract conditions that have been raised and will continue to work with TfNSW to progress these and other identified opportunities for improved procurement practices.

As part of our partnership with the City of Sydney to explore Planning Pathways to Net Zero Buildings, the NSW Division provided representation at the first in a series of three industry forums to understand planning challenges and how to achieve low-carbon high efficiency buildings and precincts. We are now in the process on planning with the City of Sydney the second forum which will take place in November and focus on input from sustainability and planning consultants.

Consulting Matters

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We also provided representation at the Western Sydney Smart Cities Action Cluster workshop to scope potential action clusters for delivery smart cities projects.

Through our state events we have provided members with access to Jodi McKay, Shadow Minister for Transport, Shadow Minister for Roads, Maritime & Freight, Clare Gardiner-Barnes, Deputy Secretary Freight Strategy and Planning TfNSW, and Claire Howlett, GM, Cities Division, Department of Infrastructure, Regional Development & Cities and have undertaken industry briefings and networking seminars on Smart Cities, Managing Project Risk and Digital Engineering.

As we continue to work with and across the various governments, agencies and stakeholder groups to ensure that our key advocacy areas are progressed, the next three months no doubt will be just as busy and productive.

Upcoming Events: Members only Boardroom lunch with Graham Millet, CEO, WSACo – 24 September 2018 Digital and Innovations Seminar for SMEs – 26 & 27 September 2018 Punching Above Your Weight: How to Compete with Global Organisations – 9 October 2018 FutureNet Sydney: 5-5-5 Networking Event – 24 October 2018 Diversity & Inclusion Workshop – 25 October 2018 Win More Work from Existing Customers – 30 October 2018

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Consulting Matters What’s happening at Consult Australia

ACT

Caitlin Buttress The past three months have seen a lot of change for the ACT. First and foremost, we farewell Kevin Keith who was Manager for the ACT for over four years and thank him for all his hard work and dedication to the Division. Kevin is a passionate advocate for issues in the built environment sector and has been a real asset to the Consult Australia team. I am thrilled to take up the baton from Kevin and work with ACT members to deliver policy outcomes and exciting events for the Division—the next few months will see us engaging with the ACT Government, industry and our counterpart associations on issues of significance in this sector and I am keen to get feedback on our activities from local members as I navigate the coming challenges.

A key policy win for the ACT Division this quarter was the appointment of the Acting Chief Engineer for the ACT in June. The ACT Government has responded to calls from Consult Australia and other associations to appoint a Chief Engineer for the Territory. Public servant George Tomlins was appointed in a six-month placement to establish the role while the Government accepts expressions of interest to fill the role more permanently. It is a step in the right direction, but we continue to advocate for a more independent role going forward. We are already engaging with Mr Tomlins and are keen to work closely with Acting Chief Engineer to help shape the role for the future to be a conduit between industry and government.

changes and wishing to engage further with our members for future issues. We will continue to work with Icon Water on this and other processes to maintain a dialogue and engagement with our members.

The Inquiry into Building Quality in the ACT consultation period has been extended until the end of September with the local government inviting more submissions from industry. The inquiry was spurred by concerns that were raised in the community particularly regarding the quality of new apartment developments in the Territory. We have asked for comments from ACT members on the documents to make a coordinated submission to government which will be collated and provided in September.

In early August, the first regular newsletter for the ACT Division was published, including a message from the Chair, industry news, events, and professional development. The newsletter will provide a reliable platform to promote events and increase engagement with the ACT members and local industry. If anyone wishes to provide content for the newsletter, please get in touch with the Division at act@consultaustralia.com.au.

We have some exciting FutureNet events in the pipeline over the next few months as well as upcoming boardroom lunches for which details will be released soon, so please keep an eye out for the next newsletter and check the website for updates.

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At the end of June, Consult Australia provided a coordinated response on behalf of members to Icon Water’s Revised Asset Creation and Acceptance Process for consideration. This was received well by Icon Water with their incorporating some of the

Practice Performance Survey Participate in the FY2017/18 Practice Performance Survey to benchmark your firm against a range of key performance indicators.

Data collection is now live and will remain open until 5pm Sunday, 30 September 2018.

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Features Consulting Matters

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Smart technologies are redefining infrastructure. Is this change an opportunity or challenge for our sector?

There is no doubt that our infrastructure is transforming. With pressure to improve and futureproof the performance of our infrastructure (be it ‘hard’ or ‘soft’), there is a growing expectation that smart technology and innovation will be the answer to higher performing / longer life assets. All indicators are that this expectation will increase as we deal with the challenges of city planning and congestion, affordable housing, funding challenges (for example privatising assets), and the need for low-carbon infrastructure (to name a few examples).

When looking at this transformation, the golden question is how can consulting companies in the built and natural environment prepare for the change? One approach is industry convergence—breaking down traditional business barriers, looking for growth opportunities and addressing challenges facing the sector from these technological changes.

We are seeing a number of breakthroughs in how infrastructure is designed and built.

The use of drone technology is being used to monitor progress on projects and to undertake tasks in hazardous areas, with PwC estimating the global market for drone solutions for capital projects and infrastructure alone being worth US$45.2 billion. 3D printing is highlighted as a potential solution to save significant costs by shortening construction times, reducing logistic costs and waste, and using labour

resources more efficiently. Augmented reality has the potential to increase the efficiency of construction methods and to improve safety by providing workers with real-time ‘actionable context-specific’ information through new tools such as smart-glasses.

Smart technologies are also providing a number of efficiencies and service improvements for the ongoing management of infrastructure assets. The ‘Internet of Things’ (IoT) is improving the user experience and the effectiveness of assets through real-time analytics from sensor collected data. Other smart technologies are helping manage the carbon impact from assets, while we are already seeing considerable efforts to get our transport networks ready for autonomous vehicles.

These are all exciting prospects. However, a challenge that may be holding some within the sector back from embracing these changes are question marks about their commercial viability and the pace at which changes will take place. The movement and the arrival of new players in the sector providing services through these smart technologies and the growing appetite amongst clients who recognise benefits, suggests the appetite is high and the commercial viability is growing.

We are seeing a number of partnerships enter the infrastructure market to provide new or improved services through smart technologies. These partnerships tend to focus on bringing together complimentary

skillsets and expertise to deliver a better product for clients. For example, Google and KPMG have recently entered an alliance to help transform businesses and operating models with automated intelligence (machine learning) and advanced analytics technologies. In the United Kingdom, Mastercard has worked with Transport to London to improve the user experience with their ticketing system by enabling contactless payments through bank cards.

Globally, Microsoft also launched their ‘CityNext’ initiative in 2013 which provides a range of services to improve how the build environment operates, primarily focused on making cities and infrastructure more digital.

While there is a growing number of nontraditional new players who are joining the market to improve how infrastructure is delivered and managed, consulting companies with extensive experience in the built and natural environment are well placed to break down barriers and use emerging technologies to improve their existing services. The sector has the strongest understanding on how to deliver ‘hard’ infrastructure and this puts them in a strong position to embed complimentary ‘soft’ solutions that add the best value or deliver the most efficiencies.

The challenge for consulting firms is a need to compete with those who have the strongest understanding of how to deliver ‘soft’ digital and technology focused solutions. To be competitive on this front, there is a real need for the sector to become experts in new smart technologies by ensuring the workforce continues to have the right skills and expertise to meet future demands.

Just as many say sustainable services should be considered the new normal in infrastructure delivery and management, the same argument applies for smart technology. It is likely this thought will grow significantly when clients and the public see the benefits of isolated smart infrastructure assets becoming broader smart infrastructure networks. There are huge business opportunities in being experts delivering this change. The first step is building expertise in an area not traditional aligned with the sector. If this does not happen, others will fill the void.

James Roberston Consult Australia

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Consulting Matters Features

Solving plastic pollution: not just an environmentalist’s problem

The plastic pollution problem is a big threat to marine biodiversity and we need an ‘all hands on deck’ approach to save the world from succumbing to it. We need researchers, engineers, governments, educators, manufacturers and the public to closely collaborate to develop holistic and sustainable solutions.

It’s hard to imagine a world without plastics, but unless things change soon we might have plastics without a world.

The World Economic Forum predicts that by 2050 there will be more plastic in our oceans than fish. Research published by the UN Environment Program shows that eating plastic particles negatively affects sea creatures, reducing their activity, disrupting reproduction and weakening feeding and schooling behaviours.

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With this, governments can mandate reform and we can better educate the public. France has pledged to recycle 100 per cent of plastics by 2025.

Norway is the pace-setter in recycling plastic drink bottles. Bangladesh imposed a total ban on thin plastic bags in 2002, and countries from China to Denmark are imposing bans, taxes and charges.

The plastics that end up in the sea start out on land. They are produced by industry, consumed by people, and treated by government authorities. So, whose responsibility, are they? A lot of campaigns and calls to action have been launched by environmental organisations globally, but they can't do it alone.

This, however, requires a lot of research. For instance, while there have been numerous reports finding microplastics in fish and shellfish, researchers haven’t yet looked adequately at how these can affect human health in the long term. What happens when they pass into our water supply and go up into the roots of plants? We need more information.

The plastic pollution problem is a big threat to marine biodiversity and we need an ‘all hands on deck’ approach to save the world from succumbing to it. We need researchers, engineers, governments, educators, manufacturers and the public to closely collaborate to develop holistic and sustainable solutions.

With this, governments can mandate reform and we can better educate the public. France has pledged to recycle 100 per cent of plastics by 2025. Norway is the pace-setter in recycling plastic drink bottles. Bangladesh imposed a total ban on thin plastic bags in 2002, and countries from China to Denmark are imposing bans, taxes and charges.

Where do we begin? The source. The reason why manufacturers use plastic is because it’s cheap and durable, but the good news is there are now some initiatives to find alternatives to petroleum-based plastic. Some global brands have started producing products made from recycled materials with greener packaging and have pledged to help in cleaning up polluted islands.

In Australia, the plastic bags phase-out is a case study in how public education has an impact on the supply chain. Similarly, in New Zealand, if you get takeaways at a café, you’re now often likely to be given a compostable container in a paper bag.

They can also make changes on their own initiative, such as using fewer varieties of plastic. The international Resin Identification Code identifies plastic types with numbers from 1 to 7. It’s the ones numbered 3 and up that are harder to recycle or don’t have end-use applications. And with scientists and engineers’ help, manufacturers can create plastics that are more easily recycled or find organic alternatives that are broken down by natural processes in the environment.

The problem of plastic microbeads is a great example of this. At least 10 countries, including the Netherlands, Canada, the UK and New Zealand, have legislated bans and manufacturers are now looking at cellulosebased materials as alternatives. To put these alternatives into production, they’ll need the help of engineers.

To simply put it, we all have a huge responsibility to uphold to make it work and for us to succeed in solving the plastic pollution problem. A more ‘whole of life’ view needs to be taken on the production, use, and disposal of plastics. Shifting to a genuine circular economy will be the key.

It’s true that manufacturers are driven by the bottom line, but many are very serious about sustainability. The difficult part is linking the cost of treating the waste back to business.

We have to find a way to collect funds to close the loop.

The cost of plastic is marked against the price of oil. When the price of oil goes down, so does the incentive to recycle. When that happens, manufacturers prefer to make plastics out of virgin feedstock because they do not have to worry about contamination. New technologies are appearing that allow us to turn plastic back into oil but at a cost. This situation could be a candidate for government intervention.

Priyanka Bakaya is an Australian-American entrepreneur whose clean energy company converts plastic waste into fuel. Bakaya’s Renewlogy makes diesel, kerosene and light fuels in a chemical process that breaks the plastics down into their building blocks without creating toxic emissions.

And in the UK, scientists and engineers from the University of Bath have developed a way of making microbeads from cellulose, which is not only from a renewable source, but also biodegrades into harmless sugars.

Here, indeed, there is some hope on the horizon.

Paul Stephenson Aurecon

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Consulting Matters Features

The Move to Multidisciplinary Practices – What to consider from an insurance perspective In today’s highly competitive environment, innovation is often the key to survival for professional practices. Increasingly, consultancy firms working in the construction industry are looking to gain an edge on their competitors by offering clients a diverse range of services, spanning professions from engineering to architecture, as multidisciplinary businesses.

Multi-disciplinary practices allow for collaborative working across disparate professions within a single business structure, with professional staff benefiting from their combined ‘in-house’ knowledge and shared use of resources and technology.

Multi-disciplinary practices are attractive to clients looking to avoid the need to engage and manage separate consultants providing different professional services on their projects.

having a higher risk profile than others, such as geotechnical and structural engineering.

The risk profile of the practice which you are considering acquiring or merging with may affect the insurance premium terms that are offered by your insurer and higher excesses for higher risk activities may be applied.

What is the claims history of the practice you are acquiring or merging with and what is the practice’s attitude to risk management?

If you are contemplating a merger with, or the purchase of, an existing practice, there are several issues which should be considered from an insurance perspective.

Comprehensive due diligence around the claims and notification history of the other practice is very important. Understanding the claims history of the practice you intend to acquire or merge with will provide you with an essential insight into the liabilities which the practice may be exposed to for its past work and may influence the preferred means for insuring that past work exposure following the acquisition or merger. The practice’s risk management philosophy provides you with an awareness of how complementary the practices may be and issues which may need to be addressed. The claims history of the other practice may also have an impact on your insurance premium, so it is very important to review and discuss it with your broker and insurer.

When should you inform your insurer about the merger or acquisition?

What is the best way to structure the merged entity?

To comply with your duty of disclosure under your existing policy of insurance, you should advise your insurer of any material changes to your business, including acquisitions and changes to your corporate structure, at any time they occur during the policy period and well before those changes are implemented.

Your insurance broker can assist you with what information is necessary to disclose.

There are many ways in which a multidisciplinary practice may be structured.

Always seek commercial legal advice in relation to the most appropriate structure for the new merged business. Once you have obtained legal advice regarding the preferred structure, speak to your insurance broker, as the type of structure/s that is used will affect the insurance advice that will be provided.

What impact will the nature of the professional activities undertaken by the practice you are purchasing or merging with have on your insurance premium?

If your business is being acquired, what should you consider from an insurance perspective?

One of the most efficient ways for a consultancy practice to diversify is to purchase or merge with an existing practice which has different yet complementary professional expertise.

Professional activities are profiled differently by insurers as part of their risk assessment process. Some professional disciplines within the construction industry are viewed as

Make sure that the issue of ongoing professional indemnity insurance is dealt with in your negotiations for sale of the business.

The acquiring business will usually require

you to take out run-off insurance for seven years which may come at a significant cost and impact your sale price. Sometimes it may be possible to negotiate with the purchaser of your business to cover your past exposure.

If you are interested in learning more about the insurance issues associated with managing a professional practice, please join us for an Informed by Planned Cover webinar https://informedprofessionals.com.au/eventsnew/webinar-lifecycle-of-a-design-practice/ on 8 November 2018. Consult Australia members can purchase discounted tickets using the code CONSULT1.

Merging with or purchasing a business with different professional expertise can present exciting new opportunities for a professional practice. Whilst the insurance issues associated with such a merger may not always be at the forefront of considerations, failing to address the issue as part of your negotiations may leave you with unexpected exposures which tarnish an otherwise exciting evolution of your business.

Simon Gray & Natalie Sullivan Planned Cover

Features Consulting Matters

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Convergence and the Internet of Things THE INTERNET OF THINGS HAS A KEY ROLE TO PLAY IN INDUSTRY CONVERGENCE. FORMING STRATEGIC PARTNERSHIPS CAN BE A WAY TO MANAGE CONVERGENCE RISK AND PUT YOU AHEAD OF THE PACK.

The Internet of Things (IoT) refers to business processes and applications that use sensory information, data and content generated by interconnected and uniquely identifiable embedded computing devices that exist within the Internet infrastructure.

It encompasses devices such as beacons, Radio Frequency Identification (RFID), sensors, mobile devices and Wi-Fi access points, and data management tools, predictive analytics etc.

IoT Analytics produces a ranking of top IoT segments, which gives some keen insight into how IoT is advancing in key sectors.

Their 2018 Insight shows that Smart City projects now make-up the largest IoT segment. IoT Analytics credits this growth to the volume of recent Smart City initiatives started by governments and municipalities around the world. The most popular Smart City application is Smart Traffic including projects such as parking systems, traffic monitoring and control, bike sharing, and smart bus lanes. Other Smart City initiatives evolve around utilities, lighting, environmental monitoring and public safety. Europe accounts for the greatest number of Smart City projects identified (164).

Smart Cities (23%), Connected Industry (17%) and Connected Buildings (12%) are the top three IoT projects in progress. IoT Analytics found that nearly half of the Smart City projects (45%) are in Europe. The Americas are leading the world in Connected Car IoT projects as well, with 54% of them worldwide.

Growth Enabler analyses the business impact of disruptive technologies and digital innovations. Growth Enabler’s review of those primary industrial sectors using IoT, which will be at the forefront of disruptive value creation, includes infrastructure: Municipalities worldwide will increase their spending on IoT systems at a 30% CAGR (Compound Annual Growth Rate), from $36bn in 2014 to $133bn in 2019.

Particular benefits include: increased productivity, improved safety, predictive maintenance, reduced asset loss – self diagnosing devices will identify product issues early, from temperature and environmental changes to predicting machine failures.

Source: Market Pulse Report 2018, Growth Enabler

Source: IoT Analytics, The Top 10 IoT Segments in 2018 – based on 1,600 real IoT projects.

In the UK, the London Borough of Greenwich worked with the GSMA, Digital Greenwich, and DG Cities on a project called 'Smart London' with the aim of improving the understanding of air quality across the Borough using a combination of mobile sensors and Big Data analytical techniques.

Unlike many air quality monitoring infrastructure, which is limited to fixed monitoring stations, the GSMA and Greenwich deployed a range of low-cost static and mobile IoT sensors in a variety of different ways (e.g. attached to bikes, carried by people on foot and attached to vehicles).

Data was collected in addition to the air

quality data from existing Greenwich air quality monitoring stations.

Collectively these sensors provided air quality data from across Greenwich from multiple different locations throughout the day.

Additional air quality data was gathered using a roving laboratory in a battery-powered van dubbed ‘The Smogmobile’ as it drove around Greenwich.

It is not hard to make the connection between the collection of this data and the potential benefits to city planning and development. Arguably substantial community and environmental benefits could

Arguably substantial community and environmental benefits could be achieved more quickly if consultants were engaged in partnership with the technology providers and the Council to consider for example, how better traffic planning could reduce the build up of emissions, or how increased ‘greening’ might counter-balance the air quality.

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Consulting Matters Features

be achieved more quickly if consultants were engaged in partnership with the technology providers and the Council to consider for example, how better traffic planning could reduce the build up of emissions, or how increased ‘greening’ might counter-balance the air quality.

There are significant opportunities that arise from the convergence of design and IT disciplines across the smart cities space, including infrastructure, transport, buildings, green space etc. Working with technology providers to assist clients to solve complex problems can increasingly give a competitive edge to consultants.

A key reason to look to strategic partnerships is that it will ensure that your business has access to the data. A significant issue for professional service providers now and into the future is how to access the richness of data being collected, if you have little or no relationship with either the technology provider collecting it or the owner? This will significantly constrain your business’ ability to value add, and for governments and policymakers looking for guidance on smart

A significant issue for professional service providers now and into the future is how to access the richness of data being collected, if you have little or no relationship with either the technology provider collecting it or the owner?

city solutions, it will allow others to market their services in this space or at the very least charge a premium for access.

• Reduce time-to-market by utilising partners’ existing resources and relationships;

In an industry which has used joint venturing successfully to enable two consultants to work together on major projects, the principles of joint venturing can be used to form strategic partnerships with technology providers to deliver exciting solutions for clients.

• ' Test drive' a solution to assess the feasibility of bringing in-house;

•A lign solutions with the platforms and ecosystems that clients are interested in;

Partnering can help to:

•B etter prepare the business for the growing competition in the marketplace, through the experience and insights gained.

• Overcome capability gaps and operational gaps;

Nicola Grayson Consult Australia

New consultancy models emerge as industry boundaries blur In 2016, 60% of CEOs told IBM’s annual C-suite study that industry convergence is their primary concern. The boundaries between industries are blurred as incumbents and new entrants race to create more value, better experiences and more relevant solutions for clients.

Here are five ways we see industry convergence impacting the built environment sector.

In almost every sector, new competitors are emerging from adjacent markets to solve customer problems in different ways – often leveraging new technology. Traditional business models are under pressure, and have been democratised by digital’s reach and ever-increasing client expectations.

Uber, Airbnb and Amazon are some well known examples—and their impact on the transportation, travel and retail sectors has been well documented.

This is not new: the built environment has always shared a symbiotic relationship with the construction industry and as any consultant knows only too well, it tends to be subject to a cycle of boom and bust.

So what does this mean for built environment consultants? It’s certainly becoming harder to predict who you’ll be up against next for an RFP or tender. And we’re seeing significant impact on business values—with potential financial implications for business owners.

1. Economic convergence

We have seen a prolonged boom phase, especially in NSW and Victoria, and this is expected to continue for the next three to five years. Given the forecast for infrastructure spending in these states, the scope and scale of construction projects is also increasing.

2. Global convergence One impact of the increasing scale of these infrastructure projects is the increasing

appetite of foreign firms for Australian operations, with a large number of local firms acquired over the last 18 months. It’s also increasingly common to see collaborative models for large projects, spreading the risk across local and multinational firms.

3. New competitor convergence Market growth has encouraged other external consultants into the space, including the big four accounting firms. They are taking over some of the peripheral work traditionally performed by specialist built environment consultants—such as asset management and advisory and planning process.

At the same time, we are seeing the growth of multi-disciplinary practices, bringing together specialist functions such as town planning, environmental approvals, community engagement and quantity surveying services. Whether it’s through partnerships or in-house acquisitions. This

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Australia’s labour shortage has forced up the price of skilled local labour – however globalisation makes it easier to access cheaper overseas labour. Offshoring is allowing some firms to become extremely cost competitive, making it easier for them to win work and also increase their margins.

Jane Jansen family

Warren

‘one stop shop’ model is challenging the niche specialist go to market strategy.

4. Offshoring convergence Australia’s labour shortage has forced up the price of skilled local labour—however globalisation makes it easier to access cheaper overseas labour. Offshoring is allowing some firms to become extremely cost competitive, making it easier for them to win work and also increase their margins.

For example, one trend we see is the combination of overseas-based labour and technology to outsource specific parts of complex projects—with efficiency and cost-saving benefits.

We expect outsourcing to become standard practice for firms of all sizes, as they send more administrative-based functions offshore and use technology to streamline and automate their work.

5. Technology convergence Technology is reshaping the way work is executed, and with the increasing use of technology like BIM all but the most advanced technological jobs are becoming homogenised. It also gives your clients far more information, choice and knowledge than ever before.

All these factors make it increasingly important for consulting firms to understand their core strengths, and focus resources on opportunities and markets where they will have the highest chance of success.

Unless you understand why clients value your service, you are far more likely to be impacted by convergence over the medium to long term. We see many firms look at merger options to quickly build scale and expertise in specific markets. But the biggest issue of all, for the short to medium term, remains staff retention.

Losing talented staff is more likely to disrupt your business than any convergence of technology or industry trends. That’s why we often support owners with succession planning funding, so younger staff can buy into the business without the need for property security.

Not only does this ensure a leadership pipeline, with committed staff who think and act like business owners, it ensures business continuity—and, ultimately, a consistently high-quality client experience.

Danny Chung Macquarie Bank

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Nick

David and Sarah

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Consulting Matters Features

Should you merge your firm? Probably!

In Australia there are approximately 10,800 architecture, engineering, planning and related consultant and design businesses.

Of these: • 60% of practices have less than 5 people • 80% of practices have less than 10 people • 90% of practices have less than 20 people.

This is just under 10,000 businesses who have a heavy reliance on the principals to bring in the clients, recruit and manage the people, design and deliver projects and control the finances. Ultimately, it doesn’t leave a lot of headspace, time or capacity to build and grow the practice. It also doesn’t allow much time to deal with success and the increasing risks that result from demanding contract conditions, finding and retaining the right people, lower fees, investment needs, and the changes in an increasingly global economy.

Most, Engineering practices have a desire to develop their businesses and watch their practices prosper. But what’s holding them back from achieving this?

Today, some forward-thinking businesses are considering how they break the mould. As BDP’s alignment with Japanese consultant Nippon Koei in March 2016 demonstrated, size, it seems, does matter.

The benefits of merging Merging—the coming together of two businesses and becoming a new business— is an increasing trend worldwide, an approach that Australia is slow to embrace. In our region, we are a long way behind what’s happening in other parts of the world—in particular, Asia and the US. In the past six years alone, approximately 600 architecture and engineering firms have been either sold or merged in the US.

The total number of engineers in Australia far exceeds the commercial demand for services. There are too many businesses competing for a diminishing service in an increasingly competitive market place.

The number one concern for leaders is the diminution of fees and services — the consequence of high and increasing competition for clients and projects from a myriad of sources. This includes other professions, the construction sector, the impact of technology and the forces of globalisation.

professionals. Add to this the reasons above, and merging becomes a recipe for success!

Our advice is to start with the premise that you should merge your practice—not why you shouldn’t. By merging with like-minded businesses, you will accelerate your path to success and break the innate tendency to incrementally improve the way you do things.

• Stronger and more talented leadership

As Nick Schumann, UK Board Member Rider Levett Bucknall and ex Shumann Consult says “After three and a half successful years developing and growing SCL we have now merged with Rider Levett Bucknall, a global multi service line consultancy which will provide further opportunities for success.

In my experience, a merger gives a better chance of having a long-term influence and continuing business as usual”.

• Increasing your skill base

The downsides

• Increasing productivity

Engineering businesses are different to most in that each has a clear identity, a distinctive design proposition and unique culture. Merging with another company and maintaining that uniqueness is ultimately seen to be especially difficult to overcome for many business leaders.

The advantages of merging / combining your business in today’s increasingly competitive and oversupplied market place include: • Increasing the client base

• Economies of Scale • Increasing the capacity to invest in technology, innovation and systems • Building scale to engage experts in business • Improving the firm’s competitive position • Expansion into other geographic regions • Adding new practice areas

Below are a few of the primary reasons that Management for Design regularly confronts with businesses who are hesitant to merge:

• Greater capacity to devolve and spread the client relationships

1. L eaders not wanting to lose control of design and clients

• Diversification of work to mitigate the risk

2. L ack of outside trusted advisors – “who do I go to?”

• Sharing the workload and improving work / life balance • Increasing your influence in the marketplace

3. A nswering and being accountable to others

• Succession and exit strategy

4. I nability to step away from the day to day

Although it is often overlooked in our industry, one of the greatest strengths of leaders of engineering businesses is their innate capacity to work with others and collaborate more effectively than most

5. N ot knowing where to start and how to go about it

The number one concern for leaders is the diminution of fees and services — the consequence of high and increasing competition for clients and projects from a myriad of sources.

6. N ot knowing potential partners / targets 7. Culture of independence and freedom.

Let’s look at some of these reasons in more detail.

Losing Control 'Control' is a crucial factor for the sense of satisfaction and accomplishment that leaders achieve from running their own practice

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and producing their own work. The ability to influence your own environment and change what you don’t like is critical for the sense of satisfaction an owner gets from their work. Unfortunately, when you are part of a team you surrender some of that control in exchange for the resources and support of your team.

If you are insistent on not having to argue your decisions and explain your reasons every step of the way then you will hold your business at its present level. You can’t expect your business to grow. If it does, and you are holding onto control, then you are embedding yourself in a job and not building your business as a result.

Lack of outside trusted advisors Simply put, there isn’t a great deal of merger and acquisition expertise readily available in Australia in the AEC sector. Partners that have expertise and specialism in AEC businesses are few and far between in our region, primarily because of the low level of activity. Having said this, they are out there and there are businesses that have the required criteria, including: • Australian presence and expertise • In depth knowledge and experience in the marketplace

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Having said this, be assured, there are a myriad of businesses that should merge or be absorbed by more developed businesses—you just need to put in the work to find them.

David Clark Management for Design Management for Design has developed a unique approach to developing and executing a merger strategy that, if implemented, effectively ensures alignment of strategy, brand, aspiration and results.

At the core is a methodology and system to ensure successful execution that involves the key people in the business. For more information, contact Rob Peake on rpeake@m4d.com.au.

• A track record of closing deals • Target sourcing and screening

Inability to step away from the day to day More often than not, leaders are engaged in the here and now—the current and next project; the current and next client etc. Yet, at the same time, they bemoan the fees they are receiving for their services, the lack of business acumen and project management expertise in their businesses and wonder why they’re not attracting and retaining great people.

The ability to step away from the here and now is not innate in leaders— “there is too much to do!”. As a business leader, this is your challenge—more notably, your obligation—to your clients and people. They are looking for you to discover and implement innovative ways of working; designing; collaborating; more exciting work and more opportunities.

• Valuation and transaction negotiation • Due Diligence • Strategy development and execution.

Not knowing potential partner/targets 45% of AEC businesses that have conducted a merger in the past five years identified finding quality partners to be their biggest challenge (PSMJ 2016 M&A Study). Sifting out the businesses with tarnished brands, poor strategic alignment and ineffective systems, it is evident that people issues are a huge challenge. Not only that, finding a business that shares common aspirations, cultural values and is a fit financially makes it even more difficult.

MANAGEMENT FOR DESIGN `

Management for Design has developed a unique approach to developing and executing a merger strategy that, if implemented effectively, ensures alignment of strategy, brand, aspiration, and results.

We have developed a unique approach to developing and executing a merger strategy

At the core is a methodology and system to ensure successful execution that involves the key people in the business.

Get in touch and book a complimentary business review, and find out how we can help you to achieve your business goals. www.m4d.com.au

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Consulting Matters Features

Strategy: should we stick to our knitting or diversify?

A long-held school of thought in business strategy has been to pick a point of comparative advantage, invest in it, specialise, and develop excellence in that strategic position. This must be based on core capabilities, that provides that advantage. In plain English this means that strategy and business assets, human and physical, should be specific. The conventional wisdom has been to keep the strategic scope narrow! Yet recently we have seen behemoths such as Amazon and Google entering a range of industries, albeit with mixed success, but definitely with some big wins, and with overall positive financial outcomes. Are the implications of this that we should forget about strategic focus and specialisation and enter unrelated industries that seem new, attractive and profitable?

It is true that IBM transformed itself from being a mainframe and PC company to being successful in completely different sectors. But this occurred over decades, came at great cost and effort, and does not say anything about the many companies that have tried and failed to achieve similar transformations. BHP transformed from steel-making to resources twenty years ago with great success, so is it a good thing to enter new industries or transform as IBM and BHP did?

The evidence is that most companies that have significantly diversified have done badly, with GE and Amazon being exceptions.

Consider ‘Coles Myer’ as an example that was unsuccessful and broken apart, even though it stuck to limited diversification, being different segments of retail. Trying to achieve convergence of a department store

For professional services firms, especially those who excel at engineering design and construction/ project delivery, how far is too far to diversify? Will there really be convergence at a sustainable profit?

(Myer), discount houses (Target and Kmart) and grocery (Coles) proved to be too much complexity to bear. Wesfarmers is now shedding Coles this year and BHP shed noncore assets (South 32), which are strategies aimed at achieving focus, concentration of capabilities and renewed specialisation for their businesses.

Like so many strategic matters, it boils down to risk and return. Generic expansion strategies that can make sense are to enter adjacent or new markets with existing products and services, or to introduce new products/ services into existing markets, but to not change both! The reason is risk, we should recall how many local companies have failed when they went overseas, and that the majority of new business developments, innovations and new products actually fail to achieve an acceptable return on investment and sustainable position. For every Amazon, GE, BHP and Google, there are dozens, probably many hundreds of failures.

So, what works? The keys to strategic success, learning from BHP, Amazon, IBM, GE and others, are strong determined leadership, long term commitment to the strategy, core capabilities that carry across the strategic portfolio, and deep pockets. In many of the successful cases the expansion

was accomplished by acquisition, and not growing new businesses from scratch, because then we see a demonstration of core capability in the new industry or region, as well as the leadership capability of the target business. Compare the failure of Coles Myer within retailing to the great success of Toyota when it created and built Lexus: Toyota had all the key capabilities it required to make luxury vehicles and kept a distinct focus between mass market Toyotas and luxury market Lexus. In contrast, Coles Myer tried to create shared buying and back office services across its divisions (that served different markets), which was a recipe for complexity and confusion.

Without the ability to bring core capability to a new industry or market, convergence or diversification strategies will be like throwing money down the drain. Consider recent disasters such as Woolworths attempt with Masters and Bunnings going to Europe.

For professional services firms, especially those who excel at engineering design and construction/ project delivery, how far is too far to diversify? Will there really be convergence at a sustainable profit? As long as the leadership is strong, and the new core capability is acquired or maturely developed, there is no reason why for example, that some management consulting might not work well, especially if it is built on existing client relationships and service capabilities, but we should beware that it is riskier than sticking to the existing knitting.

This means that the expected returns from such a venture would need to be high. And if it must be done, then like Toyota did with Lexus, it should be kept substantially distinct in its focus, marketing and operations, while making sure that the core capabilities are always in place!

Danny Samson University of Melbourne Professor Danny Samson, University of Melbourne, conducts Consult Australia’s professional services excellence program. Inquiries: d.samson@unimelb.edu.au

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2018 ECONOMIC FORECAST An economic forecast for consulting in the built and natural environment On sale now To purchase your copy go to http://bit.ly/2018economicforecast

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Consulting Matters Business essentials

Saving for your first home?

There's a new scheme in town

To help more first home buyers get into the property market, the Government introduced a First Home Super Saver (FHSS) scheme.

The FHSS scheme allows you to make voluntary contributions (before or after tax) into your super, which you can then later withdraw for your first home deposit. You can contribute up to $15,000 per financial year, up to a total of $30,000.

The main benefits of the scheme are taking advantage of reduced tax rates through super and potentially higher earnings on your savings – which all helps in saving up for a deposit!

You may be eligible if you: • have never owned property or land in Australia • intend on purchasing a property for residential purposes; and • will live in the property for at least six of the first 12 months you own the property

The main benefits of the scheme are taking advantage of reduced tax rates through super and potentially higher earnings on your savings – which all helps in saving up for a deposit!

How does it work?

Any voluntary contributions you’ve made into your super from 1 July 2017 could be eligible savings as part of the scheme—there’s no need to open a separate account.

Any before-tax contributions (for example, salary sacrifice) will be taxed at 15% on the way in, and any investment earnings on these contributions will also be taxed at 15%.

From 1 July 2018, you’ll be able to withdraw these funds by applying to the Australian Taxation Office (ATO). Once determining

you’re eligible, the ATO will arrange for your money to be paid to you from your super fund. You then have 12 months to sign a contract—or you may be able to ask the ATO for a 12-month extension. Alternatively, you could recontribute the amount into your super.

Benefits of the scheme •T ax savings. Before-tax contributions into super (for example, through salary sacrificing) will be taxed at 15%. For most people, this will be less than their marginal

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tax rate - which could be up to 45% plus the Medicare levy.

• Potentially higher earnings on your savings.

You might earn a higher return on your savings if the deemed rate is higher than what you’d get in your regular savings account or term deposit.

Want to talk it over?

If this scheme interests you, it’s a good idea to talk to a tax agent or financial adviser to see whether this suits your situation. Cbus members can access qualified financial advisers over the phone as part of their membership on 1300 361 784 or get more information at www.cbussuper.com.au

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Disclaimer The information is about Cbus. It doesn’t take into account your specific needs, so you should look to your own financial position, objectives and requirements before making any financial decisions. Read the Cbus Product Disclosure Statement and related documents to decide whether Cbus is right for you, or call 1300 361 784 for a copy.

Meagan Ketkas Cbus If you need help, you can call CBUS Superannuation on 1300 361 784 or visit www.cbussuper.com.au.

BUILDING A SUPER FUTURE WITH CBUS Through Cbus Property*, we:

• Invest in property developments across Australia

• Create jobs in the building and construction industry

• Contribute to the Australian economy and deliver returns

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24

Consulting Matters Business essentials

Understanding Slip Resistance Laws In a recent article, we looked at how to reduce public falls and accidents. One point we championed for the reduction of public falls was the need for small slotted slipresistant grates in public areas. Well, it looks like legislators agreed with us, because new legislation surrounding slip resistance has been implemented. In this article, we’ll examine the real life implications of the test methodologies defined by recently released AS 4586 Slip resistance classification of new pedestrian surface materials, and explore how they are relevant to your next project.

The classifications are explained in the handbook HB 198 Guide to the specification and testing of slip resistance of pedestrian surfaces with a view to aid the designer in assigning the correct level of slip resistance for an application.

These tests determine ratings of slip resistance that are important to understand when undertaking a commercial or industrial project that requires drainage systems to be installed. They ensure that the appropriate level of slip resistance is applied to avoid slips and accidents.

Which level of slip resistance is right?

NSW Angel Place Sydney photo courtesy of ACO Australia.

When are slip resistance standards required?

All slip resistance standards and safety requirements must be rigorously adhered to in commercial and industrial projects in order to maintain public safety, increase access and avoid compensation claims. Pedestrian areas such as walkways, shopping centres, hospitals and other public areas require various levels of slip resistance as outlined by the classifications in HB 198. But it pays to keep in mind that standards for one project, for example an outdoor architectural installation, might be vastly different to, say, those for an indoor food service environment. Furthermore, the compatibility of floor finishes with adjacent grates is critical to avoid undesirable trip hazards. The safety requirements for such spaces will also vary greatly depending on WHS and disability access requirements.

ACO’s Heelsafe® Anti-Slip grates cover a range of slip resistant ratings to cater for drainage projects in a wide range of sites.

What are slip resistance ratings?

In order to assess the slip resistance of a grate or floor surface, three tests are specified in AS 4586 which measure slip resistance in various areas.

• The wet pendulum test can be applied for areas that become wet in the rain, such as stormwater grates.

• The wet-barefoot inclining platform test is designed for wet areas where shoes are not worn, such as water parks and beach areas.

• The third kind of test is designed for commercial and industrial areas that can become dirty with oil or grease. It is called the oil wet inclining platform test and is applied in internal industrial and commercial environments such as kitchens and food processing areas.

With the increase in litigation and compensation for injuries caused by slips and falls, designers must now closely consider specifying grates and floor surfaces that comply with the appropriate standard for slip resistance. However, this does not always mean installing a grate with a high level of slip resistance. Specifying a grate which is too slip resistant can be dangerous for the public and in fact contribute to an increase in public accidents and compensation claims.

Designers need to weigh up slip resistance ratings against other potential hazards.

For example, if a grate has a higher slip resistance rating than the surrounding floor surface, it could catch a toe or heel and cause a trip hazard.

The important thing is for designers not to lose sight of the main objectives when installing grates: ensuring the safety of patrons and providing exceptional surface drainage solutions.

How can I make my project slip resistant?

To help prevent public injuries, ACO believes that slip resistant grates should be implemented where possible. Each of our commercial grates complies with AS 4586 legislative requirements for slip resistance.

Our Heelsafe® Anti-Slip grates are available in stainless steel, ductile iron and plastic designs to suit applications in a wide range of projects. The grates feature raised mechanical nodes for tread durability and are designed to prevent small heels from becoming trapped. These industrial, residential and commercial grates comply with a number of Australian and international standards for pedestrian, wheelchair, bicycle and cane use.

To learn more about proper slip resistant grate specification, refer to www.heelsafe.com.au or call ACO on 1300 765 226.

ACO's Stainless 5 Star Heelsafe® Anti-Slip grate.

Consulting Matters

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Consulting Matters

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Photo courtesy of Seb Zurcher

28

Consulting Matters Corporate social responsibility

RedR Report: Martin O’Malley

Since 2011, over 88,000 refugees have flooded into Duhok, in the Kurdish Region of Iraq, escaping Syria’s protracted conflict over the border. Spread over four camps, the population requires ongoing support for the water, sanitation and hygiene infrastructure that service the basic needs of the population.

In May this year, engineer Martin O’Malley was deployed by the Australian Government’s Australia Assists program through RedR Australia to Duhok, where he is now embedded into the United Nations High Commission for Refugees (UNHCR) as a Sanitation and Waste Water Specialist.

With over 20 years’ experience in Water, Sanitation and Hygiene (WASH) engineering, Martin is focusing on transition strategy for the camps’ emergency WASH infrastructure to a more environmentally sustainable, longterm solution, with particular focus on the Domiz 1 camp, population 42,000, which was the first camp constructed.

“In the early emergency phase of the operation when the camps were established —and this is the usual case when camps are being set up—there are many agencies working to provide WASH as quickly as possible to the affected population in life saving interventions,” says Martin.

“With the benefit of time, after the main emergency period has passed, we can look

Reusing the wastewater is a possibility, however without a current wastewater treatment facility for blackwater waste, it’s a long way off realisation. Martin is sceptical of some of the suggested treatment plant options, as these produce large amounts of sludge on a daily basis, which can create another environmental problems if not planned for properly. at the infrastructure from a more long term perspective and make recommendations on how to improve the situation.”

Currently, the camps are serviced by septic tanks that discharge into cesspits, or through a network of gravity pipes from shelters to a holding tank which needs regular desludging.

“The septic tanks would be considered massively overloaded by Australian Standards, with up to 16 families connected to each,” Martin says. “The desludged material is also currently being dumped at a hilltop, which then makes its way into the natural drainage and eventually into Mosul Dam, which is a major source of drinking water for large populations.”

It’s a difficult arrangement for the population of Duhok’s camps, who are likely to remain in the camps for the foreseeable future with Syria’s humanitarian crisis now in its eighth year. Reusing the wastewater is a possibility, however without a current wastewater treatment facility for blackwater waste, it’s a long way off realisation. Martin is sceptical of some of the suggested treatment plant options, as these produce large amounts of sludge on a daily basis, which can create another environmental problems if not planned for properly.

Understanding the particular wastewater characteristics in the Domiz 1 camp is Martin’s current priority. This involves a

Corporate social responsibility Consulting Matters

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Consulting Matters Corporate social responsibility

Cost is also a major consideration—with UNHCR’s Iraq response just 17 percent funded, Martin’s strategy needs to be maintainable for the long term health and sanitation of the camps’ populations while maintaining low operating costs. condition assessment of tanks, measuring black water flows and testing the black and greywater to understand the load (strength) of the material. “The people in the camp receive between 60 and 100 litres per person per day and so before we consider any type of treatment, we need to understand how this low volume of water affects the wastewater produced,” says Martin.

“Whatever the treatment selected, these components need to be fully understood to ensure the proper selection and sizing of options.”

Cost is also a major consideration—with UNHCR’s Iraq response just 17 percent funded, Martin’s strategy needs to be maintainable for the long term health and sanitation of the camps’ populations while maintaining low operating costs.

“My preference is to create simpler solutions, like pond or reed bed solutions,

where we can solve issues within the camps for a lower capital and operational cost,” says Martin. “We can always upgrade these later when there is a greater financial ability to support other solutions. Of course this means accepting that the final treated effluent is not as high quality, but it also means there is less likelihood that the system will have to be abandoned if humanitarian funding continues to decline.”

A recent success for Martin has been his assistance in the design for the sanitation infrastructure of 154 new shelters in one of the camps, which will be semi-permanent structures. The main achievement has been in the modification of the design of the septic tank to incorporate internationally accepted standards in Septic Tanks and Onsite Domestic Wastewater, which Martin is adapting from the Australia/New Zealand Standards. “The upgraded design will help

to improve the quality of the final effluent from the tank and thereby help to reduce the negative impacts on the immediate environment,” says Martin. “This updated design for these shelters will be the one used by the local UNHCR WASH team in the area from now on.”

Scheduled to remain in Iraq until November, Martin remains optimistic about the challenges ahead. “The various engineers in the departments were delighted to see that UNHCR has brought on someone with experience in municipal systems, particularly the planning and financial considerations, which is experience that is lacking here.

The confidence in my ability, considering the challenges, is a little daunting,” Martin laughs. “It will be all about good coordination between different expertise, clearly understanding the problem in its entirety and bringing others on the journey to get a financially and environmentally sustainable wastewater solution that looks after the people of the Duhok camps in the long term.

I’m definitely up for the challenge.”

Laura McCormack RedR Consult Australia is a founding member of RedR Australia. For more information about RedR Australia, take a look at their website at www.redr.org.au.

Martin’s role is funded by the Australian Government through the Australia Assists Program.

Project case study Consulting Matters

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Arts West Redevelopment Project, University of Melbourne The $66 million Arts West Redevelopment Project was one of the University of Melbourne’s most significant infrastructure projects in recent years.

A major component of the Arts West Redevelopment project was the renovation of the university’s Faculty of Arts building on Macleod Road. The new building— constructed over seven levels on Professors Walk opposite the heritage Old Arts Faculty Building—provides the University’s Arts Precinct with a dedicated, high-quality teaching and learning environment.

ARM and Architectus worked with the University of Melbourne’s Faculty of Arts to tailor the building so that it reflects the latest pedagogical thinking as applied in the Faculty of Arts curricula. In an era when campuses must offer something beyond online study, Arts West’s spaces are tailored to projectbased collaborative, interactive, seminar, discursive and didactic modes of teaching and learning.

One of the most stunning and distinctive visual features of the new Faculty of Arts building is its louvered façade, which involved ground-breaking use of steel. The building effectively has two skins: a glass wall and a structure of parallel horizontal steel fins or louvres—resembling deep exterior Venetian blinds.

The steel sections of each fin or louvre were shaped so that they form a series of 3D images.

The images are ‘pressed’ into the façade and reveal themselves to viewers at different times of the day and from different viewpoints.

The images feature selected objects from the University of Melbourne’s 23 Cultural Collections. The façade is both a passive solar-control element and an architectural manifestation of the Faculty of Arts.

ARM and Architectus pioneered the 3D virtual modelling techniques used to design the façade by adapting gaming software.

They used these techniques to design the steel fin array and images and communicate them to the fabricators.

To protect the steel from corrosion and add visual appeal, the project team opted to galvanize the louvres. Galvanizing was selected due to its durable nature; the stability of the galvanized surface means that the time between maintenance inspections is much longer than other products, thus reducing the overall life cycle costs of the

The $66 million Arts West Redevelopment Project at the University of Melbourne.

Credit: John Gollings.

One of the most stunning and distinctive visual features of the new Faculty of Arts building is its louvered façade, which involved ground-breaking use of steel. The building effectively has two skins: a glass wall and a structure of parallel horizontal steel fins or louvres—resembling deep exterior Venetian blinds. structure Valmont Coatings was engaged to coat the 480 individual steel sections in zinc prior to their delivery to the University of Melbourne construction site.

According to Aaron King (Managing Director of Valmont Coatings), “The fins on the façade serve two main purposes, to provide sun

shading to the tall glass curtain wall behind and to house images of objects from the University’s Cultural Collections.”

“The steel plate was laser cut in plan to form the negative relief of the images. Utilising steel for the purpose of sun shading is reasonably unique, as many buildings with

32

Consulting Matters Project case study

a second skin use aluminium instead. Steel was chosen as it allowed us to use very thin steel, only 8mm, which performed well in shading the teaching spaces, but also allowed minimal interruptions looking out.”

“Galvanizing is—of course—a wonderful way to protect steelwork, but the project team also liked the mottled and crystalline effects that galvanizing provided. It will change over time, from a bright reflective material to a dull grey.

Galvanizing provided the façade with the kind of raw surface that the project team was after,” said King.

Together with ARM Architecture, Architectus and Fab Metal Specialists, Valmont Coatings Australia recently won the Global Galvanizing Award for the University of Melbourne’s Arts West Building. The Global Galvanizing Award is presented by the European General Galvanizers Association (EGGA) every three years for outstanding hot-dip galvanized steel architecture.

According to King, “With 36 projects submitted from 13 different countries, we are thrilled the project has taken out this prestigious international award.”

Sally Wood Wordly

Top: T he steel louvres are shaped to form a series of 3D images that are ‘pressed’ into the façade and reveal themselves to viewers at different times of the day and from different viewpoints. Credit: Warick Baker.

Above: Inside the new Faculty of Arts building on Macleod Road. Credit: John Gollings.

Consulting Matters

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The $66 million Arts West Redevelopment Project at the University of Melbourne.

Credit: John Gollings.

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