Digital transformation creates new opportunities for system integrators

  • By Jose M. Rivera
  • Channel Chat

There is limited value in discerning between smart industry, Industrial Internet of Things (IIoT), Industry 4.0, digitalization, and digital transformation, to name a few trendy terms. They are all pulling in the same direction and represent a powerful disruptive force. These initiatives are much more than a mere technology play. Technology is important and a key enabler, but only one of the several complexities to be addressed to achieve success. Viewing these concepts as buzzwords or as an effort to place new labels on past concepts comes with the grave risk of missing immense opportunities.

All you have to do is look around you to see the disruption-the use of mobile smart devices, connectivity, and new business models has exploded. Uber and Lyft have disrupted the taxi industry, while Airbnb is giving the lodging industry a run for its money.

Manufacturing digital transformation is not far behind; in fact, many industry experts tell you it is well under way. Digital transformation creates an enticing proposition for manufacturers; leaders among them understand that this is vital for their survival. Some are planning their initiative, starting their journey, or scaling pilot programs. Most have struggled, because the transformation collides with cultural (organization), technological, and application complexities that may not have been properly addressed.

This digital transformation will, in turn, disrupt system integrators (SIs). Their ways of adding value will evolve into new areas, creating three basic segments: product-centric SIs, solution-centric SIs, and transformation-centric SIs.

Product-centric SIs

For product-centric SIs, ingenuity and deep product knowledge are paramount and, most likely, their value proposition to date. They often bridge platforms from various vendors to deliver solutions that manufacturers demand. On its own, this is a big accomplishment. Although this core function is still valuable today, standardization and smart tools are simplifying and automating the process and reducing the value-add at this level. On the other hand, the solution scope delivered by SIs is growing to meet the demand for ever-more interconnected systems. This, in turn, increases the need for more comprehensive cybersecurity systems. New technologies come into the mix and need to be mastered. All of this means SIs will be kept busy.

Solution-centric SIs

Next are the solution-centric SIs. From the perspective of their manufacturing clients, the value added by the SIs grows with the expertise in their vertical and, sometimes, in a specific application within that vertical. New technology, e.g., digital twins, requires not only mastering the tool and the approach, but also gaining a deep understanding of the client's underlying assets and applications. When SIs are regarded as the experts, they become trusted advisors to their clients, and their involvement can start earlier in the process. Geographical proximity, important in the past, becomes secondary.

Transformation-centric SIs

Digital transformation brings the opportunity for value creation to a new level. SIs can use their solid technical and vertical application expertise to complement a front-end consulting engagement that also tackles the other complexities, particularly those related to the human element (culture and organization). This creates immense value to those manufacturers joining the digital transformation. These are brand new areas of expertise for SIs. To achieve this level, many SIs will turn to partnerships or outright acquisitions to complement their capabilities. The information technology/operational technology (IT/OT) convergence could also take place at the system integrator level. In December 2015, Accenture (IT SI) closed its acquisition of Cimation, an OT SI in oil and gas, pipeline, chemicals, metals, and mining. Similar deals could become more common.

By successfully delivering on the digital transformation opportunity, SIs can address several of their own current challenges:

  • core business commoditization and competition from equipment vendors
  • thinning tech pool at manufacturers and frequent changes in their organization affecting established relationships
  • competing market entrants (e.g., IT) to the acquisition, development, and retainment of talent, increasing pressure on wages


Digital transformation gives SIs the following options:

  • Stay ahead of the curve to create differentiation.
  • Develop stronger links to manufacturers through deeper expertise and ongoing services.
  • Offer new and valuable business models that reduce plant capital expenditure and demand on the client's thinning tech pool.
  • Update their culture, work environment, and pay grade to attract and retain next-generation talent.


The need to support manufacturers in their digital transformation is real. Those SIs able to do this will have an immense opportunity and competitive advantage in the coming years. Will SIs step up and seize this opportunity? This challenge comes at a time when business for SIs in the U.S. has been very strong. More than half of Control System Integrators Association (CSIA) members indicated that their current order activity was somewhat or significantly stronger compared to six months ago, according to a survey of CSIA members in the spring and fall of 2018 conducted by the CSIA and JP Morgan. In a less formal survey on business sentiment from December 2018, 92 percent of participating CSIA SIs reported "things are looking good," while only 8 percent "saw trouble ahead."

Clearly, SIs in the U.S. are busy with their current, conventional business approach. Digital transformation requires diverting some of the thinly stretched resources to develop new capabilities-not an easy request. This is the classic trade-off between focusing on today versus investing for tomorrow.

Throughout their history, SIs have adapted to important technological changes and gone on to thrive. This time will be no different. I am confident that forward-thinking SIs will take advantage of this unique opportunity and create a sustainable competitive advantage. Whether it is through partnerships, mergers, or some other means, these SIs will raise the bar for the entire SI industry. Some SIs will follow; others will never change and continue to deliver their traditional approach to a contracting market.

As the CEO of CSIA, I strive to maximize the number of SIs pursuing and thriving in the opportunity provided by digital transformation. This way, CSIA can achieve its mission to advance the control system integration industry for the benefit of its members and their manufacturing clients.

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About The Authors

Jose M. Rivera, is the CEO of CSIA. His career in the automation industry, which includes Emerson, Schneider, and Siemens, has spanned six countries, most often with regional or global leadership roles. Rivera has an MBA from Kellogg School of Management at Northwestern University, and Lic (MS) and BS degrees in electrical engineering from the University of Costa Rica.

Founded in 1994, CSIA ( is a not-for-profit professional association of more than 500-member companies in 40 countries advancing the industry of control system integration.