November 2012 CSIA News

The ARC Automation Index featuring quarterly coverage of manufacturing and enterprise issues, trends and technology from the ARC Advisory Group is now available to CSIA members.

According to ARC, the quarterly automation index summarizes the current state of automation markets to enable readers to learn from past developments and provides a forecast based on major variables such as investment, consumer spending, GDP, and other leading economic indicators. ARC bases its index on publically available data of major automation companies, including published revenues.

The ARC Automation Index provides insightful analysis that will help you enhance your value premise, improve your go-to-market strategy, and attain competitive advantage. See the most recent index in the Connected Community.

The most highly requested speaker at our annual conference is Alan Beaulieu of the Institute for Trend Research. We are pleased to announce that ITR will now provide our members with quarterly economic advisor reports under a first-ever agreement between CSIA and ITR. The reports will be emailed to the primary contact person at each member firm.

Although these reports are on the U.S. economy, they will still have a usable message for our non-U.S. members. Following is what you will find in the reports:

• Current events
• U.S. market specific updates
• U.S. state opportunity index
• Snapshot of U.S. macroeconomic indicators
• Answers to readers' questions
• Federal Reserve overview

A recent edition discusses the 2014 recession, which some predict will be significant. ITR explains why it won't be. The forecast for inflation, manufacturing, capital goods orders, medical equipment and wholesale trade are provided. There are snapshot indicators of money supply, housing starts, leading indicators, purchasing managers' index and an overall, long-term view of the economic picture. 

ITR has proven to provide accurate information, and we are sure you'll find value in these reports. This new benefit is just one more reason you are a CSIA member. One healthy personal or business decision made from what's learned from these reports will more than pay for your annual membership dues.

The newly released version four of the Best Practices and Benchmarks is the foundation of CSIA Certification. The recent CSIA Boot Camp, held in conjunction with the ISA Automation Week, offered system integrator attendees a detailed analysis of the systems, policies and procedures necessary to successfully prepare for and pass a CSIA Certification audit. Don Roberts of Exotek, a CSIA approved auditing firm, reviewed the core competencies of the CSIA Best Practices and Benchmarks to provide sound education and understanding of the audit requirements.

“The Boot Camp gave me a chance to step back from the day to day and focus on the big picture! Through interacting with other control system integrators and the instructor, I gained insight into how others addressed common business issues that integrators face,” said Ron Rich of Polytron, Inc. “The Boot Camp gave me a good understanding of the CSIA Certification requirements, and I left the Boot Camp with enthusiasm and a personal commitment for moving forward with the certification process.

Be on the lookout for details about future Boot Camps.

Tell software vendors what you want!

Join CSIA auditors Don Roberts and Cathy Bennet from Exotek, LLC, for an interactive webinar developed to collect information that will help CSIA work with vendors to get the best possible solutions for control system integrators' needs for software to manage projects, time and materials, and accounting.  

A group that formed out of a discussion on the Connected Community met at the 2012 Executive Conference. Don and Cathy will bring members up to date on the progress made since the conference. They will go through the list of solutions currently deployed and share progress on getting vendors to rally behind the cause. Three examples will be shared, complete with contacts. 

Project Time and Materials Accounting Updates 

Tuesday, Nov. 13, 2012
11 a.m., Eastern Standard Time (New York)
Don Roberts, Principal, Exotek
Cathy Bennet, Consultant, Exotek LLC

Register here.

CSIA webinars are recorded. See the webinar archives to listen in again or find out what you've missed.

• Membership levels are simplified, with the same scale applied to both integrator and partner members.
• Branch offices of control system integration companies are included in membership of the parent firm at no additional charge.
• Integrators whose home office is located in countries classified as low-, lower-middle or upper-middle income by the World Bank Organization pay reduced dues. This applies to companies with less than US$2 million annual revenue.
• "Participating" and "Associate" member types were eliminated.

by Eduardo Acosta, Global Committee Chairman

The Global Committee recently developed a business plan for global growth and it was approved by the Board of Directors. The factors that drive the need for a plan are:

• CSIA's growing international membership
• Opportunities for system integrators to serve emerging global markets
• Global nature of the industrial automation industry (suppliers) and manufacturers (clients)
• Global nature of the automation profession

A vision statement was developed: Industries everywhere have access to low-risk, safe and successful applications of automation technology.

And a mission: Advance the practices of control system integration

And principles: Collaboration, inclusiveness, integrity, cultural respect, professionalism, value

The near-term strategy to develop membership is in Latin America and Europe. The approach in Latin America provides for parallel approaches to Brazil (Portuguese speaking) and Hispano-America (Spanish speaking nations). An independent contractor will be engaged for each of the two Latin American markets with the contractor's work guided by an advisory committee that will report to the Global Committee and thus the CSIA board. Hispano-America will be first, then Brazil after gaining experience. The representative will likely be located in Mexico and most meetings will be by conference call due to the large geographic area covered by Spanish-speaking nations.

Strategy for Europe is more measured and will be focused on learning the market and building relationships with system integrators and member partners. Activity in Asia (i.e., India, Singapore, China) is not proposed at this time. Rather this region will be studied and engaged once Latin American and European activities have achieved sustainability. From a financial point of view, global strategy is considered self-supporting; it will reach breakeven in year two.

Future articles will be on the progress of the global plan.

by Brian P. Clifford, CSIA Attorney

It surprises many integrators to learn how many warranties they have provided with respect to their work. The one most identify as their only warranty: a provision within their standard Terms & Conditions that says that they will "repair-or-replace" any defective items within one year of installation without cost to the customer. However, the legal definition of a "warranty" is any express or implied promise that a matter related to the project is guaranteed by one of the parties. 

The common provision detailed above is one warranty. One party (the integrator) has expressly promised that the installed equipment will not be defective within the first year from the installation date (or, if it is or becomes defective during that time, that it will be repaired or replaced without charge). But there are several other warranties you should note:

Descriptions: Look at your proposal and sales materials. Do they make promises about the performance of your work? For example, do they say that the system can efficiently handle "X" number of inputs, or that a certain processing speed can be achieved? If so, these may constitute warranties that you can be required to honor long after the project is completed - even if there is nothing otherwise "defective" about the system.    
 

Warranty of fitness for a particular purpose: Did your customer tell you the performance criteria it was seeking to achieve when selecting a particular piece of equipment? For example, did it tell you that the equipment would be used in extreme climate or operational conditions, or that it needed to function over a particularly long life-cycle? If so, there may be a warranty implied by law that the equipment you sold will meet such criteria.            
 

Warranty of non-infringement: Each of your deliverables may be subject to an implied warranty that it does not infringe on someone else's patent rights and copyrights. If the "shrink-wrapped" software you provided, for example, is later subject to a patent fight (think Apple vs. Samsung), you may have obligations to your customer to step in and replace the software, even if there is nothing wrong with its performance.    

Warranty of title: Your customer has the right to assume that it will not receive any payment claims from your subcontractors or suppliers. In states that allow your subcontractors or suppliers to assert mechanic's liens or security interests against the end-purchaser of the equipment, you may have an obligation to pay off or defend your customer from any such claims.  

These are only a few of the potential warranties that may be lurking in the background of your project. When reviewing your next purchase order or proposal, ask yourself: "What am I warranting to this customer, and am I comfortable honoring each of these promises for the amount of my quote?"    

Brian Clifford is a member of the automation practice at Faegre Baker Daniels LLP, a law firm of more than 800 legal and consulting professionals with 13 offices in the United States, Europe and Asia.  

There is plenty of buzz in the automation space about "big data." Never have our customers been more connected to data sources and never has data acquisition been more efficient. Industrial businesses have entered the age of big data, whereby the volume, variety and complexity of data they manage is exploding at record rates. According to McKinsey & Company, "manufacturing stores more data than any other sector."

Big data is the proliferation of data from various systems, devices and applications whose size makes it challenging to capture, manage, and process within a tolerable period of time using traditional software solutions. Nearly everyone in the space has an example of the unimaginable scale of this data. General Electric has a customer in the consumer goods market that captures over 6,000 individual data points for each unit they produce. The product itself has a retail price of less than 50 cents. The data rate is well over 100 terabytes of data per day.

The next generation of successful system integrators will be those that move past the era of simple data movement and aggregation. Forward-thinking businesses are leveraging this data for operational excellence and predictive analysis to create a competitive advantage and accelerated growth.  

Nearly every analytical insight a business would be interested in involves an element of time, calling on solutions that are specifically designed to leverage large time-series data sets for critical insight to capitalize on the value of their data. GE Intelligent Platforms offers Proficy Historian and Proficy Historian Analysis that are the basis for transforming massive piles of data to business benefit. This powerful, scalable platform transforms "big data" using advanced compression, delineation of data stores, interactive web-based visualization, and critical data-independence designs.

GE has released results of its own use of the tools at GE Energy's Monitoring and Diagnostics Centers. In that application, Proficy Historian has reduced the data footprint of monitoring more than 1,500 turbines in 60 countries from 50 terabytes to 10. Year-to-year degradation analysis on a turbine, which previously could not be done online due to the massive storage limitations, took two weeks to complete. With Proficy Historian, this same task is now done online and can be completed in one hour.

Which of your customers would be interested in a project that delivers a potential 99% reduction in evaluation and response time? The system integrator community is uniquely positioned to understand industrial processes, activate the corresponding data, and engage in value-added services that deliver on the promise of these tools.

To learn more about the potential of big data and delivering it to your clients, please visit GE Intelligent Platforms.

CSIA participated in the FIRST Beach Party prize give-away, and Ming-Chun Ouyang of Birla Carbon won the iPod Nano contributed by CSIA. Show attendees were given a game card that required a stamp from our booth and seven others. Substantial booth traffic was driven by the game card. 

FIRST is an international organization that enables high school students to engage in science and technology by building robots. CSIA is grateful to both ISA and the Automation Federation for inviting us and contributing the exhibit space. 

by Bob Lowe, Executive Director

Spending time with other associations that participate in industrial automation creates an understanding of the automation world beyond control system integration. I recently attended the Association for High Technology Distribution conference and learned that their members struggle with how to go to market, sell, innovate, comply with industry standards, find good people, and on and on. Sound familiar?

Being solely in the business of system integration no longer represents our industry as it did in CSIA's early days. Now engineering companies, industrial product manufacturers, contractors and even some distributors are in the control system integration business. I've had end users with internal CSI groups wanting to be members when they learn what CSIA offers. If CSIA wants to be the center of the control systems integration universe, then all must be welcome or we will never influence that "universe" as we need to.

System integrators of all sizes and flavors need to know how to run a business. Operating a successful CSI business unit is different from making, selling, or distributing a product. It's no wonder that the AHTD members with some value-add capabilities were excited to learn that we can help them with the CSI aspect of their business and even more excited to learn that CSIA welcomes them.

The AHTD conference is similar to ours, and I felt welcome and at home. Some of the AHTD leadership will likely attend our conference in May 2013. No doubt, our leaders and members will welcome them warmly.  

by Jon DiPietro, Principal, Domesticating IT

In August, I delivered a CSIA webinar on inbound marketing for control system integrators. In the attendee surveys, one person asked the following question: "I understand the importance of blogs from a content standpoint and from a SEO (search engine optimization) standpoint. How do we get the word out that we have started a blog. How do we get anyone to read it? In other words, how do we market a blog?"

This is a great question. It boils down to promotion, and there are two general categories: paid and free.

Among the paid options, advertising is the most obvious. Organizations can purchase ads on search engines like Google and Bing or social media sites like Facebook and Twitter. A good way to get started with this approach and to get the most bang for the buck is to direct people to blog articles with calls to action to download an eBook or white paper.

When it comes to free options, social media is the place to be. LinkedIn can be particularly effective for blog promotion. There are many opportunities to jump into discussions in the groups and answers sections of LinkedIn. You can frequently respond to questions by directing people to a blog article you wrote. It's also a great place to generate ideas for posts. Twitter is another great channel for syndicating content. It takes time to generate an audience but can pay big dividends through viral sharing.