System Integrators take on ROI responsibility

Nov. 1, 2004
Systems integrators have taken on project management and consulting responsibilities. Now, many are prepared to design your implementation so the early phases deliver sufficient return on investment to cover the cost of later phases.

The City of Albany, Ore., had a problem. The control system that ran its water treatment facilities was both antiquated and highly proprietary. The company that designed the automation system was many states away. Repair orders were piling up and emergency work to keep the old system active was expensive. City engineers wanted to revamp the entire automation system and move to an updated, fully networked open architecture. But they were not sure where to start or how to structure the project.

“We were working to improve a 12-year-old automation system. The original system was very proprietary,” recalls Matt Budiselich, facilities automation analyst for the City of Albany. “We decided it was beyond our scope, so we looked for an integrator.”

The city turned to an in-town integrator for help. Progressive Software Solutions Inc. (PS2) was brought aboard to install the new control system. But the integrator did more than simply orchestrate the software implementation. PS2 created a plan that consisted of a series of phases designed to make the conversion relatively painless in both installation and costs. “We weren’t sure how to break the project down,” says Budiselich. “PS2 analyzed the project and broke it into three phases with a cost associated with each phase. It was pay as you go.” PS2’s project management capabilities made the project doable both technically and financially.

Business toolsets

This is a common story these days in the world of system integration for automation. In the past, integrators focused mostly on the technical aspects of installations. “In the old days of the 1990s, integrators were brought in for a specific detailed function,” says Paul Galeski, president and chief executive officer of Maverick Technologies, an integrator in Columbia, Ill. Now, these companies bring along a toolset of business knowledge. “We bring in best-of-breed project management. Most of all, we accelerate the ROI [return on investment].”

The need to get ROI out of information technology (IT) projects started to reach its peak in the run-up to anticipated Year 2000 (Y2K) problems. In the immediate aftermath of Y2K, as the dot com revolution gained steam, companies pushed mammoth amounts capital into IT. And they wanted a return on that capital. Companies such as Oracle and i2 Technologies started selling the idea that IT projects could be structured in such a way that an early stage of the project could pay for the next stage, which would pay for the next and so on.

The concept caught fire and ultimately landed in the hands of system integrators. They were the one group that had its hands on all the levers of the installation. So in a few short years, integrators have taken on the responsibility of consulting, analyzing automation system needs, designing projects, running the projects and making sure the ROI is early and dependable.

Business management knowledge has become such an important part of system integration, that now the Control and Information Systems Integrators Association (CSIA), of Exton, Pa., puts as much emphasis on business knowledge as on technical expertise when it vets members on their integration capabilities. “Manufacturers look to integrators to tell them what options they have to improve plant efficiency and reduce down time,” says Norm O’Leary, executive director of CSIA. He stresses that manufacturers now expect integrators to run projects that deliver tangible business improvements. “We find that most integrators go out of business or disappoint customers by the way they manage a project, not because of their technical abilities.”

Different skills

Different integrators bring different skills and capabilities to a project. National Instruments Corp., of Austin, Texas, works with 600 integrators, about half in the United States and half outside the country. The goal is to match the integrator to the project, whether it’s big or small, in New York or Singapore. “We work with some shops that are just three engineers,” says Jack Barber, National Instruments’ alliance partner program manager. “Some customers have their own project management.”

Yet Barber acknowledges that project management skills are increasingly in demand from integrators. “Some customers want to concentrate on making candy bars rather than learning all about project management for systems integration,” says Barber.

Manufacturers now expect their integrators to bring best practices to the table. They know the integrators have experience in other plants and have gained knowledge about what works and what doesn’t. So they expect their integrator will help make their plant more efficient. “Successful integrators actually change the company’s bottom line and deliver real value,” says Jay Jeffreys, program manager for the systems integrator program at Wonderware, a unit of Invensys, in Lake Forest, Calif. “If you know the ROI is there, you can structure the project so the early phases can go online and pay for the later phases.”

Jeffreys notes that the emphasis on tying ROI to installation projects originally came from the large enterprise resource planning (ERP) vendors, such as Oracle, SAP and IBM. From those vendors, it filtered down to the integrators, since they live at the hub of the installation. The ERP vendors “know consultative selling with ROI,” says Jeffreys. “And i2 was the first vendor I know of that taught their integrators to design their projects based on ROI.”

He notes that an emphasis on ROI should be the overriding concern as integrators plan their projects. “ROI should define the phases. As a pure software vendor, I can’t enforce that, but I can recommend it,” says Jeffreys. “We depend on our system integrators to have the skill to plan out the ROI.”

Many integrators now want to be judged primarily on their project management skills rather than their technical capabilities. “Look at the background, experience and size of the integrator,” says Maverick’s Galeski. “A lot of customers call us in when a small integrator was hired and went out of business.” He notes that integrators offering more than just technical assistance can make a difference in how their clients run their plants.

The City of Albany has two automation installations, one for water treatment, and the other for wastewater treatment. PS2 is in the process of upgrading the control system at the city’s water treatment plant, and it is working on installing Wonderware’s Industrial Application Server, which should go live before year’s end. According to the city’s automation analyst, Budiselich, the new system will have redundancies to ensure constant operation. The new system will be fully networked and based on open standards, which will allow the city to expand the system by simply adding modules.

Transferring to the new system presents difficult logistical challenges. “The two systems work on pressure,” says Budiselich. “You can’t start a new plant with a new system and not balance it with the current system. You need to be able to control both plants without the lines getting over pressurized.”

Logistical challenges

PS2 provided technical expertise to the city as well as a good understanding of how to structure the extended project to avoid problems in the switchover from the old system to the new. “We mapped out their connections and looked at the overall picture,” says Jeff Baxter, senior system engineer at PS2. “We developed a comprehensive plan to replace or address all of the systems, rather than looking at them as discrete systems.” PS2 was thus able to avoid moves that would solve immediate problems but cause long-term headaches.

For the Albany engineers, PS2’s big-picture view and project management expertise were critical for a successful system upgrade. “The lessons PS2 learned at other plants is what mattered, especially their engineers’ knowledge of the programmable controller level and the reporting level,” says Budiselich. “Without a knowledgeable integration firm, we would have struggled quite a bit more.”

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