Human capital defines the future of system integrators
System integrators need to learn how to transform and acquire new talent that understands the “fail fast” and move on concept to experience growth and innovation.
We live in an extraordinary time of fast-paced change. Just take a look around. Changes are being made at the blink of an eye.
- Uber: By applying technology and a very innovative business model to a sleepy taxi industry Uber created the world’s most valuable start-up now worth around $70 billion according to The Economist. Uber was created in 2009 and is in the news regularly. With its rapid global expansion, it has collided with protectionist laws along its path. It has also challenged past-held beliefs around car ownership.
- Uptake: According to Forbes, Uptake beat Uber to become 2015’s hottest start-up. Uptake is trying to be the analytics and predictive software back-end service for major industries including construction, aviation, mining, rail, and more. Brad Keywell, the cofounder and CEO of Uptake, is probably better known as the former cofounder of Groupon, an e-commerce marketplace.
- Smart homes: This is not a company or a vision for the future, it is a reality with many homes already outfitted with smart thermostats, smart fire and security alarm systems, and even a smart lawn sprinkler controller that adjusts the watering schedule based on data from web-accessed weather forecasting resources.
In light of these interesting developments, one would think that younger generations would be excited about pursuing a science, technology, engineering, and mathematics (STEM) career. Not exactly. Government campaigns had to be initiated because younger generations have not been viewing technology or manufacturing as their industry of choice. While programs that encourage STEM careers have been in place for some years and have been successful generating new talent, demand is likely to remain ahead of supply.
For example, on a recent visit, a Control System Integrators Association (CSIA) system integrator (SI) member operating in the HVAC space shared her disappointment in not being able to convince her son to even consider engineering in spite of his ability in math and science. Her own business was booming and having a tough time recruiting talent. She viewed this as a sign of a promising future in the engineering field. It is hard to ignore the impact that off-shoring of manufacturing has had on the younger generation. Manufacturing in mature economies has had a dramatic transformation in the past few decades. It has become more environmentally friendly and more sustainable. Technology deployment has been impressive and has elevated the role of plant operators. Even robots have gained a more collaborative nature with humans.
Unfortunately, the image of manufacturing remains one of poor paying jobs and smokestacks, yet the explosion of technology applications translates into a voracious appetite for engineers and scientists.
Another successful system integrator indicated that he viewed his toughest competitors for talent were not the traditional players in the automation space, but the "Apples and Googles" of the world.
As if this were not enough, the industry will be facing massive retirements with the "grey wave"-a dramatic demographic shift when the baby boomer generation retires. These large retiring masses will take decades worth of technical and application expertise with them that can’t be replaced fast enough by younger generations.
Two areas of focus for system integrators
In CSIA’s 2015 membership survey, SI members were asked, "What keeps you up at night?" Two categories were at the top:
Attract, develop, and retain talent. Based on the points made earlier, this is not surprising. And it is not just a U.S. problem. In a recent conversation with an SI from Southern Europe, in spite of high unemployment figures, which is very strong in machinery that demands automation, their efforts to recruit one program logic controller (PLC) programmer took 7 months by using external recruiters. The recruited programmer was a recent immigrant from South America.
Business development. This brings back the point of "human capital." Business opportunities in the Internet of Things (IoT) and Industrial Internet of Things (IIoT) world will be plentiful. These opportunities won’t arrive in their traditional format. SIs will have to transform their companies, and for this, new talent will need to be required in areas they didn’t have to bother too much with in the past.
The reason founders of successful start-ups like Uber and Uptake create so much value (even after removing the hype factor) is because they are able to challenge conventional wisdom. They are able to not only build a compelling business model but also create a "larger than life" vision for the future. This allows them to raise large amounts of capital to translate vision into reality.
They also are willing to try, create prototypes quickly, and show a willingness to "fail fast" and move on to the next venture. They have scalability in mind from the start and build it into their platforms. Having one venture succeed out of a portfolio of four is normal for them but viewed as failures by many.
SIs may need to bring in additional talent to help transform this mindset. Interestingly enough, some of these talents may not be engineers. SIs will be challenged to adapt what is considered a talent.
On the upside, there are promising signs that should motivate SIs to transform. One of these is the relatively recent inflow of private equity funds into the SI market, something not very common just a few decades ago.
CSIA’s answers to industry trends and challenges
Through business best practices and other methods and opportunities, CSIA strives to improve the business capabilities of its members. When it comes to developing new opportunities created by IoT and IIoT, CSIA accepts the challenge to develop "best practices."
CSIA is nevertheless taking a proactive approach on the subject of human capital, leveraging its broad membership. A key value of CSIA is collaboration. The motto for CSIA’s annual conference and committees is "share one good idea-take 10 with you." CSIA also provides a forum for all members to network, train, discuss common issues, and share best practices. In response to the "attract, develop, and retain talent" challenge, CSIA organized several panels on the subject for the 2016 Executive Conference. Leading SIs shared their experiences and original approaches to winning talent.
To address the need for business development, CSIA created a business model task force to help SIs understand the transformation that the industry is currently undergoing, with a particular focus on business models. The topic will be featured at the 2017 Executive Conference as well.
This is a very exciting time of transformation filled with opportunities and challenges. Human capital will determine the fate of SIs, as a war on talent is becoming a reality. CSIA accepts the challenge to develop best practices in this emerging space. CSIA will continue to provide a leading role in anticipating and preparing SIs for a promising future, to a large extent, by letting the power of collaboration bring out the best of its entire membership.
CSIA serves the growing system integration market
The Control System Integrators Association (CSIA) is a global, nonprofit professional association with a mission to advance the practice of control system integration to benefit our members and their clients.
Founded in 1994, CSIA helps members improve their business skills, provides a forum to share industry expertise, and promotes best practices for business management.
System integrator members that become CSIA-certified have demonstrated the highest level of professionalism and excellence. To become CSIA-certified, member firms must pass an independent audit based on 79 criteria covering all aspects of business performance, including general management, financial management, project management, quality management, supporting systems, human resources, and more.
In addition to the annual executive conference, the association offers free monthly webinars; an online automation search guide for prospective clients of integrators; a financial performance tracking and benchmarking program; a members-only online community website; and opportunities to network with other integrators and industry partners.
CSIA has over 400 system integration company members and 100 vendor partners in 27 countries. The association is headquartered in Madison, Wis. To learn more about CSIA, visit www.controlsys.org or contact CEO Jose M. Rivera at firstname.lastname@example.org.