At a time of transformation, CSIA helps members thrive
SI companies will have to adapt to the new realities of higher IT content, an increasing practice of code-sharing, and the use of public domain components-and move to a subscription-based delivery business model to ensure survival and leverage this great opportunity for years to come.
Both the role of automation system integrators (SIs) and the environment in which they operate are changing rapidly. We may be facing a very real growth opportunity, perhaps similar to what the system integration market faced when large end users began opting to outsource their SI services starting in the 1990s. That led to a wave of new SI company creation, and significant business growth for existing SI companies.
The present opportunity is developing through the confluence of important technology and social trends. There are real underlying drivers behind heavily promoted terms like Industrial Internet of Things (IIoT), Smart Manufacturing, and Industrie 4.0. SIs will continue to deliver the critical role of integrating disparate systems into real solutions, as required by end users, and in the process will ensure broad adoption of technology across the board.
What is changing dramatically is the scope of work that includes areas that were previously off-limits. Borderlines between domains keep changing. In addition, the market will push for different business models that shift the delivery toward subscription services. With the increase of information technology (IT) everywhere, a more extensive use of open platforms and open sharing is expected.
In short, the real value added by system integrators is shifting, and they will have to adapt if they want not only to survive but to thrive.
Challenges and changes
We are living out a dramatic but silent transformation in all aspects of our lives. Important technology and social trends continue to converge and, in the process, demand solutions to old and new problems.
Here are a few examples:
Sustainability considerations evolved from more environmentally conscious consumers who continue to demand better information reporting on sustainability-relevant data. This includes carbon footprint tracking for the entire production and logistical chain or resource consumption per unit of output (i.e., quantity of water consumed per quantity of finished product). Providing these seemingly simple requests have forced providers to bridge "silo" systems and organizations, such as operations and infrastructure, that previously had no need to interact with each other.
The "gray wave" refers to the large number of experts expected to retire in the coming years. In both mature and emerging economies, this represents a problem. In mature economies, there will be a shortage of experts not only because the aging demographic will reduce the pool of candidates, but also because of an overall dwindling interest in science and technology by younger generations. In both emerging economies and high-growth economies like China, the expansion has been so rapid that there hasn't been time to learn and develop the expertise among necessary recruits. In all cases, tools are needed to aid in the transfer of knowledge in the forms of coaching tools that leverage powerful analytics and Big Data to accelerate the development of experts.
Technology has evolved in an explosive way, making itself available to the masses, sometimes providing higher levels of technology for personal use than what employers can provide for work. Boundaries have been blurred and previous product definitions have become historic. One needs only to look at the traditional phone and how voice-to-voice calls represent a mere 5% of today's phone use. A better name for a smartphone could be "highly portable connected compact personal computer," but this is too long and bound to be obsolete in the near future where terms like "wearable" or "implanted" would have to be included.
What are the implications for SIs?
- IT content in industrial applications will continue to increase and deliver the rapidly evolving functionality that users are enjoying in their personal lives. While there has been IT content in automation solutions for decades, the content will grow dramatically. SIs that don't embrace this run the risk of becoming the providers of a reduced scope (i.e., "mission critical" only), losing ground to a growing IT contingent of extensive solution providers.
- Higher IT content and increased IT player participation will bring with them practices that had not been widely adopted by the classic automation segment. These include code-sharing and public domain for full components that, in the past, needed to be created from scratch over and over again. Code-sharing and the community approach has allowed IT technology to grow exponentially, and this is likely to take place in the automation space as well. Mission criticality may have limited some of this practice in the past for good reasons, but a segment of functionality may open up the parts that are not mission critical to the IT-sharing approach. SIs will have to adjust to this new environment, and this will redefine where true value is created.
- Opportunities for which SIs are well-qualified will be created in areas outside of the traditional, purely industrial, space.
- Value delivery via a subscription-service model will become a high-growth segment. This may be new territory for Sis, but they need to embrace and join the trend now or risk being left out.
Where does CSIA come into play?
- The backbone of the Control System Integrators Association (CSIA) is provided by our Best Practices (BP) Manual, a comprehensive guide to help SIs build and run strong companies. These BPs are centered more around management topics with less emphasis on technology. This allows the BPs to remain, for the most part, relevant in the future. System integration is dealt with in a very universal way, enabling applicability to spaces beyond the traditional industrial one. As a matter of fact, some CSIA SI members serve other markets, like building automation, already. The BP Manual is peer-reviewed on a regular basis. Look for version 5.0 to be released in 2016.
- CSIA needs to welcome the IT professionals who wants to leverage our industrial background and BP approach.
- Successful and wide deployment of IoT, IIOT, Smart Manufacturing and Industrie 4.0 will be the ultimate measure of accomplishment. CSIA seeks to play an active role in this, by providing the BP approach to a broad audience.
- CSIA is seeking to leverage its relationship with other related associations and ensure that the opportunity we are currently realizing materializes into growth opportunity for our members.
In conclusion, the state of the system integration industry is strong, and is driven by a booming opportunity created by the confluence of technology, social trends, and the need to put disparate systems together into one solution, which is what system integrators have always done. SI companies will nevertheless have to adapt to the new realities of higher IT content, an increasing practice of code-sharing, and the use of public domain components-and move to a subscription-based delivery business model to ensure survival and leverage this great opportunity for years to come.
Jose Rivera is CEO of the Control System Integrators Association (CSIA), a global, nonprofit professional association with a mission to advance the practice of control-system integration to benefit members and their clients. Founded in 1994, CSIA has more than 400 system integration company members and 100 vendor partners in 27 countries. The association is headquartered in Madison, Wis. To learn more, visit www.controlsys.org or e-mail Rivera at email@example.com.
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