Integrators versus Large Companies

R

Thread Starter

Ranjan Acharya

Dear List,

I was wondering what the experiences are out there when comparing the following:

- Systems Integrators i.e., small and medium-sized companies that specialise in electrical design PLC, SCADA and other programming (not talking about the really small integrators with only a few people on staff or run from a SOHO -- just small and medium sized)

- Full Service i.e., large company that provides civil engineering, mechanical engineering, electrical engineering, ... -- one-stop shopping for the end customer so to speak

I am interested in facts / opinions that compare integrators with the big guys (pricing, value for money, quality of work, support, ... and everything else) -- both points of view are of interest -- either for or against one of the two approaches. This comparison is for any size of projects from modifying a rung of ladder logic to setting up a new facility.

Experiences could cover cases of integrators directly employed by the end customer or indirectly employed as a sub-contractor to the main contractor.

Any feedback on-list or off-list would be appreciated.

FYI, we are one of the small to medium-sized integrators.

Thanks

 
J

Jocko Harmet

This is the question that all small to medium sized integrators want to know the answer to.

My company is a small/medium sized systems integrator. We have recently downsized our operation, keeping only 3 engineers, the minimum in our cad, other support departments and a skeleton crew in our UL panel shop.

We have found that customer compfort level is the most important factor.
There is almost always a monetary savings when using an integrator, especially if the integrator can provide the entire controls solution (Engineering, Hardware, software). But this alone will not get you the job.

In large projects - ones that the customer would hire an engineering firm to handle all of the Engineering, the customer has one responsible party. The engineering firm is usually responsible for all of the contractors, subcontractors, etc.

We have found that the key to getting into these jobs is to have relationships with the vendors that supply mechanical equipment, and to offer accountability for the entire electrical/controls portion of the job.

We have gone so far as providing the electricains and handling the electrical contracting ourselves, but this only works in Arizona where we have a comercial contractors liscence.

The best deal is to provide and charge for construction oversite. This means you have to devote an engineer to the site 3 or 4 days a week or more during the construction phase. but the customer pays the contractor - customer saves money, Job goes smooth.

Just putting together a control system is not of much percieved value to the customer - He won't see it until the entire project has come together

Another important point - to be a good integrator, your engineers need to have a good mechanical background. This is another area that can cause problems if not dealt with - when problems arise - The civil, mechanical people will be looking to you to be a big part of the solution (whether they do or not, the customer will expect it)

My company also competes with the controls division of big engineering firms and would like to see a trend towards using integrators.

The way we see it, people don't like change - most managers learned the way their peers got things accomplished and copy that -we have found success in giving the customer that same perception of responsibility that he would get from the engineering firm.

as for cost, this is seldom the reason for going with an integrator over an engineering firm.

Another Integrator
Jocko harmet
Tamtech, Inc.
Phoenix, AZ
[email protected]

 
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Andy Piereder

I deal with the full range on a daily basis...

The different kinds of engineering services are designed to address different kinds of projects or rather levels within those projects.
Engineering companies are a mile wide and an inch deep, while System Integrators are an inch wide and a mile deep. You generally find them
working together, the one subcontracted by the other for maximum effectiveness.

Size doesn't appear to be the main issue in the context of competency, but once again, it may be the issue when it comes to allocating resources for a project. Unfortunately, more bodies doesn't necessarily improve the situation unless they are competent bodies.

The most common problem I see on projects is management. There is often not enough time spent wringing out the scope of the project and getting input from the various participants. On the other hand, customers routinely change the scope well down the road. Its a tough business and you are damned if you do and damned if you don't.

I think there is no substitute for experience and that would be my primary consideration regardless of who I was dealing with.

Andy Piereder
Pinnacle IDC
 
M

Michael Griffin

At 14:10 12/10/01 -0400, Ranjan Acharya wrote:
<clip>
>I was wondering what the experiences are out there when comparing the
>following:
>- Systems Integrators i.e., small and medium-sized companies that specialise
>in electrical design PLC, SCADA and other programming (not talking about the
>really small integrators with only a few people on staff or run from a
>SOHO -- just small and medium sized)
>- Full Service i.e., large company that provides civil engineering,
>mechanical engineering, electrical engineering, ... -- one-stop shopping for
>the end customer so to speak

For doing what kind of work with what size of projects for what industries? I've never dealt with a company that does civil engineering
along with mechanical and electrical design. I work in the automotive industry. However, I could imagine that this may be more common for large
process industries. There are advantages for the customer to giving an entire project to one company (except for the off-the-shelf bits). There is usually enough blame to go around in any project without getting caught between the various sub-contractors.

>I am interested in facts / opinions that compare integrators with the big
>guys (pricing, value for money, quality of work, support, ... and everything
>else) -- both points of view are of interest -- either for or against one of
>the two approaches. This comparison is for any size of projects from
>modifying a rung of ladder logic to setting up a new facility.

I think perhaps you need to relate the size of the company to the size of the project. Large companies seem to do a poor job on small
projects, while small companies don't have the resources to handle large projects. Of course a company could do a poor job on any size project, but that is another issue.
With our own purchases, we are more commonly buying an entire machine or a machine modification which involves both tooling and electrical and programming changes. The company we would do business with either typically does the whole thing themselves, or arranges for their own controls sub-contractor. We would then hold them responsible for the entire project. Their choice of sub-contractor reflects directly upon them.

In the end, whether the company you are dealing with is large or small, the quality of the engineering work depends upon the people they have actually working on it. It seems that when a project is small in relation to the size of the company doing it, you tend to get their less experienced people (which is a charitable way of putting it). At least with a smaller company you are able to judge the ability of the people likely to be working on it. Due to the nature of our business, we tend to do a lot of small
projects rather than a few large ones.

>Experiences could cover cases of integrators directly employed by the end
>customer or indirectly employed as a sub-contractor to the main contractor.
<clip>

This isn't an integrator or sub-contractor story, but it is a big versus smaller company story. We have a medium size project being built by a certain very large company whom I'm quite certain you are familiar with. They won the contract on the lowest bid basis (you don't need to tell me the problems with that).
It has been a trial so far. Their engineering operates on a "throw it over the wall to the next department" basis even though it is actually only a few engineers working on the project. They want to design all the mechanical parts and get that approved before doing any electrical design (I guess we've got to put some sort of electrical panel on here now - I wonder
where that's going to go?). They want to finish the electrical design and get that "approved" before figuring out what functions the machine has to do when it is in service (Calibration? You mean the instruments have to be calibrated? I thought they came that way when we bought them?).

To perhaps give you a specific example, one of the machines has eight servo axes making a rapid series of moves of large masses. We wanted
to use a particular brand of servo (for maintenance purposes), but the company we are dealing with was pushing another brand as cheaper (the brand we wanted was spec'ed in our original project specification). Of course they phrased the advantage as technical.
The servo motors of the brand they preferred were one eighth the physical size of the ones we asked for. "One eighth the physical size for the same output? Doesn't that seem a bit odd?" I asked. "Oh, I guess they must be really good motors" they replied. I suggested they look into it a bit further, and it turned out that there was a bit of a discrepency in the actual motor specifications. Somebody, somewhere had made a mistake, but it never occurred to these people to question why there was such a difference.
I could go on with this tale of woe (there unfortunately is much more), but I think the point has been made.

We have found (with similar projects) that while the better smaller companies may not be perfect themselves, they tend to learn from their experiences better. They also tend to be a bit less arrogant (they admit they don't know everything).
We convinced a different (small to medium size) company we dealt with on previous similar projects of the value of actually working out the
machine functions and operator interface in writing in advance before writing the PLC and OP programs. The company we are currently working with considers that to be a novelty of truly staggering proportions. (Although they agreed to do this when bidding on the project, they decided to un-agree to it after the PO was signed).

I have the impression that your question stems from some discussion you may be having about the direction your own company may be thinking of going in. If this is the case, you need to get a good feel for who your customers are and what they are really looking for. Are you a direct supplier to the final customer, or are you a sub-contractor, or both? What is it you can do for them? Is what you can do what they really want?
Are there particular companies that you find yourself working with jointly on many projects? Size alone may not be a particular advantage, but extra skills needed on projects can be an advantage. More to the point, what
do your end customers consider a project to be? They probably want someone who can deliver an entire project, not a piece of it.
This doesn't mean that you have to be a one stop shop for all your customer's needs. There is a living to be made by sub-contractors as well. There was a trend or fad in the automotive parts industry that anyone with
pretensions of being a somebody had to be "tier 1" (a direct supplier to the assembly plants). There is beginning to be some realisation that this isn't necessarily always such a good idea after all. Some companies are discovering that the "tier 2" part of the business (a supplier to
sub-assembly makers) is where they are actually making money. There can be disadvantages as well as advantages to being close to your final customers.


**********************
Michael Griffin
London, Ont. Canada
**********************

 
R

Rick Jafrate

RanJan,

A good consultant is worth his or her weight in gold. One of my clients, one of the largest aluminum producers in the world, asked themselves how could two similar projects coming from GE, in the same time frame, produce such different results?

The first and easier of the two projects was a miserable failure and has never worked correctly. The designers of the second project, when it was apparent they were diligently working for a world class result, were told of the first project, it's failure, and that consequently it
would be a long time before GE was invited to bid on another project. They wanted the designers of the second project to know that their efforts were appreciated. The second project was so successful that GE was awarded a contract to
provide automation for a super critical project. The entire output of a huge integrated aluminum facility passes through the associated machinery.

Why did one succeed and one fail? Both projects were installed at the same customer site, using the same automation provider, implemented using same equipment, and in the same time frame. The easier project failed while the more difficult one succeeded. So what made the difference?
People!

From then on this major aluminum producer participated in the selection of the primary GE engineers who would be working on their projects. This eventually led to my departure from GE and to the establishment of my own
consulting company.

IMHO there are two critical ingredients in a successful project: effective project management and talented designers. The question of adequate resources is really a question of project management and not of the company size.
This holds for big, small, medium, really big, and really small companies.

If you have a really good designer use him/her regardless of the size of his company. Find top notch consultants and sub-contract them!

regards

Rick Jafrate
Mitek

 
W
Something I think you ought to do: visit the Control Systems Integrators Association (CSIA) at http://www.controlsys.org. They have some great
handbooks: how to specify projects, how to work with a systems integrator, how to select a good one, etc.

You can also buy these handbooks at the ISA bookstore: www.isa.org.

Walt Boyes

---------------------------------------------
Walt Boyes -- MarketingPractice Consultants
[email protected]
21118 SE 278th Place - Maple Valley, WA 98038
253-709-5046 cell 425-432-8262 home office
fax:801-749-7142 ICQ: 59435534

 
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Bob Peterson

I work for a smallish integrator/panel shop (<50 employees, <a dozen elec engineers).

The biggest problem of being this small is the size factor. Few companies will give you a large project (say 2000+ hours) because it would require to many of you people being assigned to a single job, which makes them nervous.

The biggest advantage is being smaller and presumably more nimble. It is difficult for a larger firm to compete effectively with a smaller firm with less overhead unless they can provide something the smaller firm cannot.

One problem we have is the difficulty in doing field support. We have no dedicated field people so the project engineers end up doing the field
support as well, meaning they are unavailable for other project work.

Larger integrators/engineering companies can put together a single source package of design, engineering, supply, installation, and startup that is very difficult for a smaller integrator to effectively manage.

Lastly is the issue of project management. few smaller integrators have effective project management (of course few larger firms do either but at least they make a stab at it). What it amounts to is that in a larger project (maybe 5000+ hours) firms w/o a defined PM structure are dead, they just cannot do it, and even with a smaller project they can be in a world of hurt.

Bob Peterson

 
R
Project mangers are hired to sort out what gets done, how it gets done and who does it. The issue I face many times is that project managers are not familiar with the automation components of THEIR projects. It's not until the end of the project when 50% of the "but list" is I&C related that they wake up to the fact that schedule and cost are impacted by all these black boxes.

Part of the solution is to have the technical people who defined the "what" get more involved in the "how" and "who". There is no substitute
for selecting companies that have expertise. If the EPC (Engineer Procure Construct) companies being considered do not have the expertise, then
automation contractors should be considered. I like to consider companies that may be involved in the on-going support. This will depend on the sites maintenance model but even when the maintenance is done with staff people, having an automation contractor that knows the site is a plus. Many of these companies know what a pager is. In my experience the EPC company is on to the next job.
 
Take a look at any list of Systems Integrators
(including those listed on CSIA, or in the
Control Engineering list) and you'll find that
they are all "small" - less than $10m annual sales, most $ 2-5m.

There are NO SIs above $ 50m.
If there are ANY SIs with sales above $ 50m,
please boast about it - e-speak up!

Reason :
SI's are specialists (focused on relatively specialized markets, and narrow geographies). Few SIs can handle projects outside their geographical area (though they imply that they can) and outside their narrow expertise (Allen-Bradley PLCs, materials handling, for example).

This is why the large companies (Rockwell is a primary example) are attempting to offer Integration services to increase revenue. This (IMHO) is a serious mistake. They compete with their own SIs, who will simply migrate to offering competitive products.

In this age of easy communications and web presence, more SIs should collaborate to offer joint proposals and bids, featuring their complementary capabilities and offering a powerful joint-front for their suppliers.

If there are any Control Systems Integrators Association (CSIA) SIs who already collaborate, please let us know on the Automation List.

Cheers:
jim
----------/
Jim Pinto
Tel : (858) 353-JIMP (5467)
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/

 
Bob Peterson wrote about small integrators:

>The biggest advantage is being smaller and presumably more nimble.<

Jim Pinto comments:

Since revenue is declining for all the large suppliers, they are migrating to Systems Integration. In my opinion, this is a mistake for 2 reasons :

1/ They compete with their best customers - the systems integrators.
2/ They cannot match the "nimble" abilities of the independents.

Bob continues :
>One problem we have is the difficulty in doing field support.<

Jim Pinto suggests :

In this age of easy web-communications, the answer is alliances. Use the Control Systems Integrators Association to find matching
geographies and capabilities and submit joint proposals - offering everything the majors can provide, plus more.

The more you do it, the better you'll do!

Cheers:
jim
----------/
Jim Pinto
email : [email protected]
web: www.JimPinto.com
San Diego, CA., USA
----------/
 
A

Andrew Piereder

> Bob Peterson wrote about small integrators:
>
> >The biggest advantage is being smaller and presumably more nimble.
>
> Jim Pinto comments:
>
> Since revenue is declining for all the large suppliers,
> they are migrating to Systems Integration. In my opinion,
> this is a mistake for 2 reasons :
>
> 1/ They compete with their best customers - the systems integrators.
> 2/ They cannot match the "nimble" abilities of the independents.

Andy comments:

Suppliers often refute the first reason because of the amount of technical support they have to do for some integrators. They reason (not incorrectly in many cases) that they are losing money on this kind of customer and are better off cutting them loose and extending their expertise into the services arena.

What you term nimbleness I would call a conflict of culture. System Integration is a process constrained by time, politics and urgency.
Manufacturers/Suppliers necessarily have different priorities and strengths and soon find themselves murmuring, "I'm a doctor, not a bricklayer..."

 
This is one of the main reasons that CSIA (the Control Systems Integrators Association) has started a Registered Member program. To become a CSIA Registered Member, you must pass an audit that is considerably more strenuous than a GAMP audit from a pharmaceutical company. This allows CSIA to provide candidates on a level playing field to manufacturers.

CSIA also publishes several manuals on selecting and working with systems integrators, that are for sale in the ISA bookstore at www.isa.org.

The point of this is not to puff CSIA, but rather to point out that Andrew is absolutely right. If just anybody can call themselves an integrator,
users will have grave difficulty differentiating between good ones and...not so good ones.

Walt Boyes

---------------------------------------------
Walt Boyes -- MarketingPractice Consultants
walt[email protected]
21118 SE 278th Place - Maple Valley, WA 98038
253-709-5046 cell 425-432-8262 home office
fax:801-749-7142 ICQ: 59435534
 
D

Donald Pittendrigh

Good day to All

It is with great interest that I have read this thread and it is gratifying to know that you have the same issues at stake as we do in my country.

I am a "small systems integrator", in fact technically I am the company, I have a young assistant who is learning the business from the right end, i.e. the bottom of the food
chain, I have a wife/bookkeeper/receptionist/product sales
clerk who manages the office. I share premises with another "small SI" in a similar situation to myself.

We are Very, Very busy and in the time that my business has been alive, have done only one trade show, a couple of customer demo evenings, and absolutely no other advertising at all.

We are very specialised people, in fact I only build wharfside and stockyard materials handling machines with a minor amount of work in the associated customers plants. We work almost
exclusively with the Siemens product range which in most regards we know and understand better than the Siemens support personnell in our area.

We produce quotations virtually on the same day regardless of what size, we research products in our field and make recommendations for new technology to our customers which are unbiased evaluations of the best products in the market place. We are prepared to do anything for our customers as they support us as faithfully as we do them, we are cheaper than any of the large companies around, more efficient and thorough in
our quest for technical excellence. This is because we are nimble, I prefer flexible, we make the decisions with out the need for 10
signatures on every piece of paper, no-one wastes our time with monitoring our email and internet usage, our timesheets and travel expenses have only to be acceptable to ourselves and the accountants, we are occupied for 99% of our time with engineering matters and have almost no need to play petty politics to survive.

We have an immense contempt for the cumbersome way in which the "big manufacturers" deal with us, even more we hate the way in which they disregard us because they think we are small, but we are the way forward and our customers know that, we care about every aspect however small or large because if we blow it, there is absolutely
no excuse, noone else to blame and because we are so dedicated, there is only very infrequently anyone who can provide any technical assistance
when we get stuck. This is a hard business ethic to live up to, it makes demands that very often wipe out the private life for weeks on end but
we are engineers for the sake of engineering, our independance and pride is the most important part of our business strategy and the degree of personal satisfaction in this way of doing it, far outweighs the alternatives.

I challenge any employee of any "big manufacturer" to make the above claims and I challenge anyone who is not a "small SI" to make these claims with any conviction, we do it for engineering, the others with very few exceptions, do it for the profit margin.

Regrards
Donald Pittendrigh
 
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