Division of Labor
Twenty-five years ago, Stephen J. Hegeman, AIA, currently a principal at Francis Cauffman Architects, was working on a project in Philadelphia with CAD drawings produced by a firm in Palo Alto. The practice of outsourcing – contracting professional services to a third party – is not new, but has evolved substantially since then, and the implications of this trend are far-reaching for the A/E/C industry. According to the 2006 AIA Firm Survey, more than 60% of architecture firms outsourced work at least occasionally, and 8% of these engaged in offshore outsourcing, the practice of sending work to third parties overseas. It is estimated that 20% to 30% of U.S. architecture jobs will be offshore by 2015.
During an offshore outsourcing roundtable held by the AIA International Practice Committee in 2006, attendees cited the domestic shortage of skilled junior architects and high-quality interns as a primary driver of offshore outsourcing.
Is outsourcing helping or hurting?
In addition to saving money, outsourcing enables firms to manage multiple projects, especially during peak periods, which increases competitive advantage and profitability. Having 24/7 project documentation in multiple time zones by multiple labor shifts allows fast-track production and adherence to aggressive project schedules.
FXFOWLE Architects’ New York office has been engaged in offshore outsourcing for almost two years. According to Krishna Rao, the firm’s digital design manager, the transition to BIM was turning point. The procurement of a large contract in the Middle East, the firm’s first experience with Revit modeling requirements, caused management to look outside its borders for assistance, specifically, to CADForce, a Los Angeles-based outsourcing firm with production centers in Pune, India. FXFOWLE views CADForce technicians as an extension of its junior production team; Rao considers them an integrated unit of the in-house staff, giving him the flexibility to adjust staff resources as project demands change. Offshoring is also augmenting the practices’ business development, providing an opportunity to leverage a local resource and make connections on the ground in expanding markets. The firm’s work in Latin America, for example, is buttressed through its collaboration with the Argentinean production firm, Estudio Libovich Arquitectura, providing FXFOWLE with credibility in a region where they do not have a local office.
Quality control and risk management are common concerns associated with outsourcing. Steve Whitehorn, managing principal of Whitehorn Financial Group, a professional liability and risk management practice, strongly advises his clients to carefully review the quality of work received from third parties. Overlooked issues such as incorrect dimensions, errors in construction detailing, and omissions can be detrimental to budget, schedule, and professional reputation. While FXFOWLE recognizes that in-house management yields better quality control, it allocates time and establishes protocol to manage document review of outsourced work as soon as it arrives. “We align expectations at the start of a project,” says Rao.
FXFOWLE’s long-term goal is to acquire and train in-house staff to meet BIM needs; in the interim, however, offshore outsourcing allows the design-oriented practice to focus resources and enables staff to gain Revit skills through osmosis and collaboration with CADForce.
Work-sharing and outsourcing business savvy
With 25 offices across the U.S., U.K., Europe, and Middle East, the engineering firm Buro Happold does some limited outsourcing, but it also engages in work-sharing, which allows it to take advantage of the firm’s global resources. According to Craig Schwitter, PE, a principal based in New York office, the goal of work-sharing is to shift work across offices to leverage talented and top-performing staff. Hubs of expertise exist in specific locations, and they are sourced for skill according to project needs. “Work is sent to where it is most efficiently completed,” says Schwitter, “which is more important than where it is completed the cheapest.’ While there are varying labor rates among offices – staff rates in Poland are roughly a third of those inNew York – Schwitter says the firm’s work-sharing doesn’t have a huge impact on the bottom line. It does, however, help Buro Happold’s engineers across the world develop competitive skills. In turn, this allows the firm to become more marketable in a global economy and capable of pursuing work in international markets.
TEK Architects does not engage in outsourcing of architectural services, as Princpal Charles Thanhauser, AIA, rationalizes that architects should be experts in their trade. But the firm, which has been a client of Whitehorn Financial for more than 20 years, does take advantage of not only the company’s practice-management services, but also its help in developing strategies to improve business, extend professional networks, and market. In areas where architects are less knowledgeable, such as risk management and business development, “bringing in an expert is just good practice,” says Thanhauser.
Jacqueline Pezzillo, Assoc. AIA, LEED AP, is the communications manager at David Brody Bond Aedas and a regular contributor to e-Oculus.