The School of Economics and Management, Tongji University  July 10

“ It is useless for Party B to be enthusiastic if Party A has no demand.”

—— Ding Shizhao

The document entitled Opinions on Promoting the Sustainable and Healthy Development of the Construction Industry that was issued in 2017 stated that “enterprises for investment consulting, surveying, design, supervising, bidding services, and costing should be encouraged to develop whole process engineering consulting services through joint operations and reorganization (mergers and acquisitions)， thus to cultivate a batch of world-class whole process engineering consulting companies”. Since these opinions were put forward, whole process engineering consulting has become an industry hot topic.

However, the market for whole process engineering consulting is still relatively small. Most people attribute this to unclear policies. In fact, relevant policies have been introduced. However, there is still not much demand for whole process engineering consulting.

“It is useless for Party B to be enthusiastic if Party A has no demand.” Ding frankly pointed out that eliminating the industry’s “misunderstanding” of whole process engineering consulting, correctly understanding the “whole process”, and stimulating the client demand are the keys to promoting the development of whole process engineering consulting.

Eliminate “Misunderstandings” to Meet Party A’s Demand

“Whole process engineering consulting promotion requires correct understanding based on a reform trend of marketization and internationalization”
According to his analysis, Ding said that the following two concepts have been clarified in the definition of whole process engineering consulting. The first is the time scale for the service. Whole process engineering consulting runs through the entire life cycle of a construction project from preliminary research and decision-making to implementation and operation. The second is the scope of the service. Whole process engineering consulting provides engineering consulting services (including planning and design) that are concerned with various aspects such as organization, management, economics, and technology.

“Some projects may take hundreds of years to go from the stages of early research to actual implementation. From the perspective of service time, it is very difficult for an enterprise to achieve such projects.”

According to Ding, some consulting companies believe that whole process engineering consulting equals whole-process project management or cost management， which is not an international consensus. In addition, some people confuse the organizational model with the management model, simply stacking or “connecting” past professional services and calling it “whole process engineering consulting”. In fact, these are all “misunderstandings”.

Ding holds that whole process engineering consulting is like an engineering consultant for the entire life cycle. It has various organizational models that will coexist with phased and specialized service organization models for a long time. These two will complement each other to meet diverse market needs.

In Ding’s opinion, as construction investment projects enter different phases, client needs also become diversified. In practice, clients not only need engineering consulting services throughout the “whole process” but also need these whole process engineering consulting services to be reflected in the managed services that fully cover the scope and boundaries of the various professions.

Therefore, we should correctly understand the connotation and extension of whole process engineering consulting and avoid reading into the phrase “whole process” literally. At present, based on respective understandings, whole process engineering consulting is “experimented” in different projects in pilot areas.

Without relevant guidelines for the provision of engineering consulting services such as the service and charging standards for whole process engineering consulting, investors still have traditional management habits and behaviors and have not transitioned to international investment consulting business models. Therefore, investors have to summarize their experiences while they are still practicing whole process engineering consulting.

Ding emphasized that this issue must be addressed by utilizing the power of the client. Clients should be motivated to purchase the service and the government should provide good guidance.

“Only when clients keep an open mind, try new models and summarize new experiences, purchasing professional and integrated third-party engineering consulting services to improve their managerial skills, can the whole process engineering consulting industry be really promoted.” Ding said.

Guideline on Promoting the Development of Whole Process Engineering Consulting Services that jointly issued by the NDRC and MOHURD in 2019 presented to vigorously develop the whole process engineering consulting service mode that is driven by market demand and meets the diversified needs of clients. The government-guided and market-led development of whole-process engineering consulting is gradually taking shape.

Leading Design Breaks Through Market Bottlenecks

“As the soul of construction engineering, design plays a leading role and guides other engineering consulting services. It is essential to obtain a significant return on investment and achieve value growth throughout the entire project’s life cycle.”

Should whole process engineering consulting be led by design for vertical extension or led by construction supervision for design subcontracting? Ding holds that design is vital for ensuring quality. The close cooperation between design and construction is conducive to the realization of construction goals and high-quality development.

Therefore, we should attach importance to and fully leverage the central and leading role of design throughout the entire life cycle of engineering consulting services.

Ding also expressed that in the international community, architectural design companies usually provide clients with “one-stop” whole process engineering consulting services for bid invitation and submission as well as construction supervision from preliminary work to design (including planning, solutions, bidding drawings, and construction drawings).

It is obvious that design is the most basic stage of the whole process. It is an important basis when investors are making decisions. Design institutes are therefore the most logical choice when it comes to organizations related to the industry that provide whole process engineering consulting services.

Therefore, only by taking design as the leading element, can whole process engineering consulting fully realize the client’s intentions through design documentation and process changes.

Ding believes that as the most important decision-making consultant for clients, design institutes should not only provide designs but also provide “extended design” services including bidding consulting, contract management, and construction supervision.

He suggested that with the continuous deepening market-oriented cost reform, design institutes should actively change the incomplete services that are currently being provided. They should also use their advantages to expand project planning and provide “extended design services” such as planning, precise contracting and contract management.

Therefore, it is urgent for design institutes to develop their strengths for whole process engineering consulting. That is, they should focus on creating multi-skilled professionals who understand design, materials, cost, management, and construction.

Whole process engineering consulting is a market product. The realization of “whole process consulting” needs to be driven by the client and requires the government to reform the cost management system. To realize whole-process consulting, all kinds of engineering consulting service providers that led by design institutes, should focus on project benefits to bring great value to their clients. This can be achieved by providing whole process engineering consulting services and developing industry standards that are in line with international standards.

“This follows the general market demand trend and is also an international practice.” Ding said.