Value

We are a service company that provides an ill defined service. Its hard for us to even tell people what we do. Are we an engineering company or a project management company? Are we responsible for the engineering within a project or the execution of that project? Are we the Owner's consultant or his sub contractor? Are we responsible for our part of the scope or are we responsible for the scope? The answers to those questions have a big impact on us, but the answers are slippery. The answer, of course, is that we are what our Client wants us to be at any particular point in the project. And if what our client wants us to be conflicts with what the contract and payment terms negotiated by the client's purchasing group require us to be, we can only hope that the project turns out well.

But back to the question, what is our value? As a service company, that is an important question. It is the most important question; driving as it does, everything that we do. Yet again the question, what is our value? If we can't define our service, we may face some difficulty in measuring its value. We are left with the realization that our value is in the eye of the purchaser, i.e. our clients that own and operate the projects that we work on. And what is it that our purchaser sees? How does the purchaser of our services decide with whom to do business? How does he value our service? How do we compete for his business?

Those who purchase our services are virtually all engineers. They are people who deal in numbers and facts. A case for value, solidly built on numbers and facts is what engineers want to see when faced with purchasing decisions. So when an engineer from an engineering services company sells engineering services to an engineer (how much wood could a woodchuck chuck . . . .)!! What is the sales conversation? What data does an engineer use to prove to another engineer that his particular engineering services company is superior his competitors?

The sales conversation with the purchaser must be meaningful to the purchaser. What is meaningful to the purchaser? The answer always boils down to the Four Horsemen, i.e. Time, Money, Performance and Quality. Any engineer worth his salt should be able to measure time, money and performance in his sleep. Quality may present a greater challenge, but there are many standards from the API, AGA, ASTM, etal. that control quality. It might take more work, but "quality" can be measured by a determined engineer.

Since Time, Money, Performance and Quality can be measured, the naive observer would expect engineering service providers to have reams of data on their performance relative to those criteria. The naive observer would be correct if that data was an important criteria in making purchasing decisions. Since the data does not exist, the more world wise observer would deduce that data is not an important criteria in making purchasing decisions.

But logic cries out that engineers always use data to make purchasing decisions. What is wrong with the engineers that buy our services? Have they been seduced by the Dark Side of the Force, i.e. business development? They say and we believe that they buy based on hard numbers. Yet our sales literature is full of pictures and abbreviated resumes called bios, with numbers few and far between. Either we are fools or pictures are in fact something that influences our client's purchasing decisions. Neither answer is comfortable to either party in the transaction.

In the darker marches of the night, my mind conjures images of a Beauty Contest. We have replaced the Talent Competition with our resumes. Instead of the Swimsuit Competition, we parade pictures of our projects. And yet, what are we to do? For in truth, there are no numbers.

Pity the poor client. He has no reliable way to estimate what a project will cost until the engineering is done. How can he measure Money or Time? Engineering Services must be purchased and used before either Time or Money can be defined, let along measured.

Where is he to get historical numbers to base his decisions on? He can only get them from his suppliers, i.e. us, or he can use internally generated numbers. Yet both sources resemble fun house mirrors at the county fair. Our numbers are suspect for a number of reasons. One of the most important is that like Garrison Keilor's community of Lake Woebegon, the projects that we do as engineering companies are all above average. We tend not to talk about our problem children.

Even more to the point, we, both ourselves and our clients, suffer from a lack of numbers. It seems that client organizations operate on a "need to know" basis. Obviously engineering contractors are not in the "need to know" category, with the result that we hardly ever know how much it cost to build one of the projects we design. Even when we construction manage, procure and do the cost tracking for a given project, deference to the sensitivities of the construction contractor, as well as internal client stakeholders, require that much cost data is unseen by us. The common tendency to add operational costs into the capital accounts; or conversely, supplement the project budget from other accounts further clouds any project cost accounting or tracking.

As a result, both our clients and ourselves are without the historical project cost information that would allow for any kind of performance tracking or ranking. Thus, we dress up in our pictures of past projects and flash our resumes.