CSIA Looks Ahead to Future of System Integrators

March 14, 2023
In the last part of this video series, CSIA's CEO explains the implications of acquisitions and how his organization is facing new system integration challenges head-on.

The transcript below has been edited for length and clarity.

See Chapter 1 here 

See Chapter 2 here

Bob Vavra: One other thing that we've seen—I know this one's got both personal and professional interest for you—is this idea of supplier consolidation. Emerson has made no secret of its interest in acquiring National Instruments. In fact, they've been very public about it, which is somewhat unusual in this kind of a kind of a deal. Do you see this as a one-off acquisition, or do you think there's some more room for consolidation down the line?

Jose Rivera: I don't see this being a one-off deal. I worked for Emerson, I also worked for Schneider Electric, and when you're in these types of companies, you are regularly looking at opportunities. You [often] have these smaller deals that don't make it for most people's radar. And then now and then you have one of these bigger ones.

Remember, Emerson tried to acquire Rockwell in November of 2017. That was also very visible. But then I think the way to look at this is a consolidation of means fewer players. It's like a pie that gets split by fewer participants. I actually view the pie as growing bigger, like in a in a serious way.

You'll have many more of the same, like, the new parts of automation, artificial intelligence and IIoT, all the services around delivering automation and for example, workforce training and all these different things. Those things are new. They are totally outside of the traditional scope of automation players of the past. You will always have like this influx of new players coming in and some of them extending the boundary beyond the factory floor.

There will be acquisitions to get into the areas that allow them to deliver more solutions, bigger solutions, but also divest components or parts of their businesses that they don't view as strategic. So probably the lesson from here is, like, get into investment banking because you're going to benefit buying and selling on both ends, right?

BV: On May 15-19, CSIA is going to have its annual leadership conference in New Orleans. That's always a great event. And on the home page on the CSIA site for the event, it says, “A successful business must be bold as it tackles these changing times head on.” So how do you expect the conference to reflect that challenge, and what are your members ready to do to meet those changing times?

JR: Thanks for bringing it up our conference. We have it once a year and we only were forced to cancel it during the pandemic. It looks as almost we're back to normal with our economy. But if you look underneath, there are a lot of changes that happened because of the pandemic.

When you go into the company offices, they look very different today in terms of hybrid workforces. Some of the companies have an important chunk of employees that are never going to that office because they just happen to be living either in a very remote area or in a different city. So that is a reality that is new for most companies.

Some system integrators were doing that already before, but now everybody's dealing with this hybrid. What does it mean? Now I have people that are outside of the country. How do we integrate them? These are very, very important questions. In particular, during the current times of the talent shortage, you want to make sure that your environment, work environment is one that attracts and retains talent and develops them,

And what happens at our conference, we create an environment where system integrators are sharing openly between them in what they're doing. If you go there, we say, “Share one idea and take 10 with you,” because that is the nature of our environment.

More and more of the end-user market, of the manufacturers market, they want broad solutions. They want system integrators to deliver ongoing services—take care of not just the purchase and installation, but the maintenance, the updates, the cyber-patches. And that is a different business than a project business. Our community is also trying to take advantage of this opportunity and learn, again, through presentations but also through exchanges between system integrators of what they're doing to deliver on this new opportunity. 

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