Changing face of the automation system integration industry

Growth and changing demographics of the automation system integration industry have influenced how system integrators have grown, specialized, and concentrated in specific regions and industries over time. Control Engineering 2014 System Integrator of the Year winning companies (Cogent Industrial Technologies Ltd.; Insist Avtomatika LLC; and the Automation and Control business unit at Wood Group Mustang) responded.

By Mark T. Hoske September 12, 2014

Growth and changing demographics of the automation system integration industry have influenced how system integrators have grown, specialized, and concentrated in specific regions and industries over time. Representing the 2014 System Integrators of the Year below are Bijan Shams, president of Cogent Industrial Technologies; Dr. Vladimir Morenko, director general of Insist Avtomatika; and Richard Seale, PE, PMP, president of the Automation Business Unit at Wood Group Mustang.

1. How have changing demographics (the aging engineering workforce) changed how you do business with customers?

Shams: Whether it is the demographics or the economic recession of 2008 and 2009, what we have found is that some of our customers have lost some of their in-house senior personnel with the technical and industry know-how. As the baby boomer generation eases into retirement age, it is more important to be available and proactive with customers to provide support where their in-house personnel may fall short.

Morenko: Changing demographics have not influenced our business so far. According to Russian legislation a person reaches retirement age at 60. However, our employees do not have to leave the company at this age-a person can continue working as an engineering/technical specialist until 65 and as a manager until 70.

Seale: Throughout the industry, qualified and knowledgeable personnel in customer organizations are retiring, and there is a void in finding suitable replacements. This situation has a noticeable impact on the internal ability to support their legacy systems. Training of young engineers on this equipment is difficult with the lack availability of equipment and software as well as fewer mentors to train them.

As a result, we find customers searching for more outsourced assistance from established companies like ours. They are looking for more services across the full project lifecycle, specifically to help scope, estimate, justify, and execute projects. They are also trying to find qualified partners who can offer a broad scope of services from automation through instrumentation, electrification, and beyond.

2. How has changing demographics (the aging engineering workforce) changed how you seek and retain engineering talent?

Shams: As a company, we have always recruited both senior and junior engineers to help our team grow and build core competencies. The effect of the aging workforce is less magnified if your hiring focus is based on emotional intelligence and skill set-sharing our values and attitudes of teamwork, dedication, and continuous learning. With both generations, it is important as an employer to learn and understand their motivations and desires to create a better workplace for everyone.

Morenko: Today the company is interested in hiring more young people. We search among graduates, and maintain contacts with academic teaching staff in relevant institutes of higher education. Experienced employees act as mentors for students during preparation of their graduation work, write reviews of their work, and supervise students during practical training. As for staff retention, the company is building its own campus with the aim of creating and maintaining corporate spirit. The campus will serve as a place for training and recreational activities.

Seale: The problem of finding qualified engineers was caused in large part by a downturn in the process industries during the 1980s and much of the ’90s. As a result, there is a gap in the availability of engineers with 10-20 years of industry experience. The problem will only exacerbate in the years to come as more veterans retire.

To find younger talent, we have to rely more on social media such as LinkedIn, Facebook, and other similar sites. In addition we have to actively recruit talent.

To retain young engineers we strive to offer them opportunities to work with cutting-edge technologies in addition to legacy systems. This requires a leadership challenge to balance the opportunities so that they understand the current systems in place while preparing for their ultimate replacement with advanced methods. One of our objectives is to provide young engineers with early involvement on a broad range of interesting and meaningful projects, with mentoring from our knowledgeable engineers.

3. Over time, how has industry specialization helped how system integrators approach business? Please explain.

Shams: Each industry faces its own set of challenges. To that end, specialization has provided us with much clearer focus. We have a deeper understanding of certain technologies that are more applicable to certain industries, acting as a positive differentiator for our business.

Morenko: Industry specialization helps system integrators to offer their customers time-tested solutions implemented for other customers, if it does not conflict with the terms of nondisclosure agreements. For example, we can offer some KPIs or forms of process reports. Industry specialization helps the company to accumulate vast knowledge not only in the field of system integration, but also in organization and execution of production processes.

Seale: In today’s automation world, the systems that are required are more complex with increased levels of compliance and volumes of data. Specialization to fill this need can often be provided by small, niche companies that focus on a specific technology. Alternatively, larger integrators have taken on specific expertise in multiple areas as part of their core services portfolio, allowing customers to utilize a single source with whom they are familiar and have confidence.

4. Has the system integration industry become more or less regional over time, and how has that changed things?

Shams: The system integration industry has become less regional and more global, requiring the need to learn the latest technologies and standards around the world. There are pros and cons for our business; while there are generally more opportunities, we are also operating in a larger and more competitive market. And with more global projects, our team has been able to expand their skill sets and we have also adopted a more accepting attitude to change in our project approach.

Morenko: In the context of the resource-based economy of the Russian Federation, geographically the company has to move deeper in the regions where the government and oil companies plan the development of new deposits—in Central and East Siberia, the Far East, and the Arctic shelf for prospecting. The company is setting up offices in these regions.

Seale: Traditionally, most system integrators start out serving a local plant or asset, growing their workforce over time. Eventually, they expand their customer base to other customers that can use their talents. That has not really changed over the past 40 years.

5. Are there fewer or more applicable codes and regulations for system integrators to follow? Please describe several of increasing importance lately and why.

Shams: There is definitely an increasing number of regulations for system integrators to follow. Particularly when doing business globally, we need to have an understanding of various regional electrical and safety codes and regulation.

Morenko: The number of codes and regulations grows in proportion to customers and service organizations becoming more professionally competent in the sphere of system integration. This happens due to their understanding of possibilities and benefits that can be derived from creation of new process control systems or modernization of the existing ones. Professional associations, such as the Control System Integrator Association (CSIA), have to take into account all changes in customer demands, and create or modify current business codes and regulations. Thus, for example, the incident in the Gulf of Mexico forced the industry to revise some documents related to industrial safety.

Seale: There has been a growth and adoption of international codes that are becoming more predominant both globally and domestically. Traditional U.S. standards are merging or migrating to the international codes. More codes need to be followed, including plant safety management (PSM) standard 29 CFR 1910 from OSHA, that are integral to many of our projects. Certain areas, like cyber security, have parallel standards (IEC62443, ISO/IEC 27001, and NIST cybersecurity framework, for example). These are challenging system integrator organizations to provide a holistic view of the systems being installed or upgraded and are implemented by our own standards.

Other human-centered regulatory codes that impact operational integrity, including human machine interface (HMI) design, network design, and information management, are among considerations when choosing a system integrator (SI) partner. An example of these codes includes the pending release of ISA 101 for HMI development.

6. Describe a key attribute of a recent project (provide a photo if you like), and how your firm approached it differently now, compared to a similar project (or if you had considered the same project) 10 years ago.

Shams: One of the key attributes is having a more disciplined approach to project management and collaboration with all stakeholders. Compared to projects years ago, we have put more focus into project definition and planning to ensure that work is properly understood and agreed to by the client and all key stakeholders. This way there are no surprises down the road about what the project will deliver, when it will be complete, at what cost, who will do the work, how will the work be done, etc.

Morenko: Our current large project involves application of virtualization technology in software and Blade technology in hardware. Moreover, the difference from the similar project that was implemented in 2005 is the usage of Wi-Fi for communication with remote control objects, instead of frequency modulation (FM).

Seale: Projects today are larger and more complex than previously. They require more disciplines and a larger multifaceted organization to support them. High-value engineering centers with specialization and flexibility are an outgrowth of this execution complexity. Today, there is parallel execution of automation work with the integrator taking on more responsibility for completion based on preliminary design from an engineering, procurement, and construction (EPC) contractor or client. This allows an SI to provide application development rather than just integration and configuration services.

7. What other technology or business trends have changed for system integrators, and how has your company responded?

Shams: Big data—Many operations produce volumes of data that are often stored in disparate systems and not used to their full potential. Cogent provides services to capture, store, and integrate all of this data and turn it into actionable information for operators to gain real-time visibility into the health and profitability of the operations. With a properly integrated information system, operators are empowered to monitor and track key performance indicators (KPI) to improve decision support and dispatch of resources.

Morenko: Recent trends in Russia involve large mergers and acquisitions among our traditional customers-oil and gas companies. This results in a reduced client base as there are fewer players on the market now than there used to be several years ago. To preserve relationships with existing customers we sometimes have to take on even those projects that turn out to be unprofitable. We monitor changing technologies and use the ones that have proved their reliability and are in demand. It is necessary to pay much attention to relationships with customers, be proactive, and offer new solutions.

Seale: Today’s open network-driven systems strongly converge IT and automation. This requires IT backgrounds with specific expertise in design and configuration rather than just an automation engineering discipline to ensure the correct design of complex systems. There is a rapidly expanding gap between mobile, accessible, and versatile technologies and the need for secure systems to protect the integrity of operating facilities and business intelligence. We are responding to this by integrating the concept of risk-based design into the control system architecture and information infrastructure, and adapting established IT security models (C-I-A model) to models more appropriately suited for process control and safety system infrastructure (A-I-C model).

8. What trends do you envision will most affect manufacturing over the next 3 to 5 years? How will this affect system integrators?

Shams: The "Industrial Internet" is transforming the way that operational information is leveraged, and will have a tremendous impact on manufacturing. Better interconnectivity between machines also translates into new insight and grounds for research and improvements, impacting the productivity of many industries.

Operations will be able to easily access plant systems and quickly optimize machine performance. By making machines more "smart," industrial operations can monitor, predict, and control operational performance and minimize downtime and inefficiencies.

Morenko: First of all, we expect integration of control systems with geological models and manufacturing models.

Secondly, advanced process control (APC) solutions will become more popular as it will be necessary to overcome limitations of traditional control systems, push the process to a higher level of productivity, and operate facilities with greater cost effectiveness.

Considering current trends in oil and gas extraction-the need to move to remote regions with harsh environments-unmanned technologies obviously demonstrate a good potential for development. We also predict wider application of Foundation Fieldbus, Wi-Fi, and Smart Field (I-Field) technologies.

Seale: PSM is a key driver in the process industries from a regulatory perspective. This trend will continue in traditional refining, petrochemical, and chemical industries and will expand into other industries as the implications of noncompliance become more evident.

Cyber security protection, as part of PSM, is a key topic of discussion and investment to assure the safety and security of critical industries and their facilities. There is a migration of system design practices to risk-based design methodologies to harden systems against internal and external attack. Successful integrators will embrace this need.

The challenges that process industries faced using risk- and performance-based design for process safety will be the same for the design of secure control and safety systems infrastructure. New and increased risks will have to be under constant scrutiny and consideration as the threat horizon broadens.

– Edited by Mark T. Hoske, content manager, Control Engineering,

ONLINE extra

This article provides additional information than what appears in the Control Engineering September print and digital edition. 

Key concepts

  • Representatives of the 2014 Control Engineering System Integrator of the Year firms provide perspective on the changing system integration industry.
  • Workforce demographics, technology advances, and codes and standards are among challenges.
  • Advanced controls, networking, cyber security, and safety are among leading concerns in the next 5 years.

Consider this

What takeaway information will you apply today from these award-winning system integration firms? 

ONLINE extra

Learn more about these companies in the system integration articles linked at the bottom. 

And in the Global System Integrator Database 

Cogent Industrial Technologies

Insist Avtomatika LLC

Wood Group Mustang Automation

More about the roundtable participants

Bijan Shams is the founder and president of Cogent Industrial Technologies. Cogent offers electrical, controls, and IT system design and integration services and operational technology solutions to industrial operations and facilities in North America. Bijan has over 20 years of extensive experience in the execution of technically complex large projects in multiple industry verticals, with a particular focus on improving operational performance.

Vladimir Morenko is owner and director-general of Insist Avtomatika LLC, a Russian system integrator offering automation solutions for customers in the oil and gas industry.

Richard Seale is president of Wood Group Mustang Automation. He has been with the business unit since its inception in 1996, playing a critical role in its dynamic growth. Richard has more than 40 years’ experience in the automation industry, holding positions in automation engineering and project management and executive management. He has executed projects in the upstream, downstream, and chemicals sectors. A graduate of Lamar University, Seale is a certified project management professional (PMP) and a registered professional engineer in the state of Texas.

Cogent Industrial Technologies, Insist Avtomatika LLC, and Wood Group Mustang Automation are CSIA members as of 3/1/2015