The Market for System Integrators in India is Poised to Grow

​Rajabahadur V. Arcot and Sharada Prahladrao 

The economic and political rumblings in the Euro zone impact global markets and India cannot remain immune to these events.  Additionally, galloping inflation, currency depreciation, growing trade deficits, and such others add to the country’s economic uncertainty.  Resulting from these and other factors, India’s expected GDP growth rate is sliding from near 9 percent to 7 plus percent, which is by no means a harbinger of recession.  

India continues to remain a domestic consumer-demand driven economy and a destination of choice for industrial companies - process, batch, and discrete.  Presently, manufacturing constitutes only around 16 percent of the country’s GDP, but this is bound to increase.  The State has recently initiated policy measures to increase the industry’s GDP share to 25 percent by 2020.  The outlook for the growth of manufacturing looks promising but it faces challenges.  Becoming more competitive is the manufacturing industry’s main challenge.  It is yet to prove that it can compete and succeed.  It is not investing enough in innovation and enabling technologies including automation; the industry still treats investment in automation from the perspective of safety, heath, and environment, and not as a business enabler.   As the automation market grows and evolves, the level of automation implemented by end users increases.  The complexity of control systems and instrumentation is reaching the point where successful implementation of automation projects depends on highly skilled professionals.  That coupled with the continued reduction of end users’ internal staff and the increasing lack of qualified engineering, operations, and maintenance personnel, creates an excellent opportunity for system integrators in India. 

The implementation of automation is engineering-skill intensive and for most manufacturing companies the cost-effective access to this resource is by leveraging the services of system integrators.  Therefore, manufacturing companies increasingly turn to system integrators to implement automation projects and seamlessly integrate disparate systems.  However, although there is a demand for system integrators, the market is fragmented and a major impediment is that there are no established industry best practices.  

The US based Control System Integrators Association (CSIA) has created a certification program to assure clients that the services will comply with stipulated business standards. Similarly, SIs in India must be associated with such organizations to set quality standards.  As system integrators are much closer to end users within their respective geographical territories, they have ample opportunities to  collaborate with global players with similar capabilities.  These companies need to find partners with similar expertise across different geographical regions. This will enable them to leverage each other’s strengths and reach new markets.  

In today’s business environment it is vital for a system integrator to be a one-stop solutions provider for multiple issues from the technical level to business process level.  System integrators technically bridge the gap between end users and automation suppliers.  Often, a good automation system implementation involves integration of subsystems from various suppliers.  From an end-user perspective, real-time performance management (RPM) is important.  RPM involves collaboration among automation systems and enterprise solutions.  Therefore, end users turn to SIs to integrate various technology solutions.  

System integrators in India have developed multi-domain specialization that helps them to enhance their organizational productivity and resource utilization levels.  Most of the leading system integrators in India have skilled engineers in instrumentation & control and other relevant engineering disciplines, supported by highly qualified and experienced project managers. System integrators in India are found in clusters, generally located close to manufacturing hubs.

ARC’s market outlook study on system integrators tracks trends and challenges, charts growth opportunities in various industrial sectors, and gives astute strategic recommendations.  This is a market with large untapped potential; expansion of industries or retrofitting requires automation and this is a slot where system integrators with technical skills and multi-product knowledge will be in great demand. 

To know more about the market for system integrators in India please contact raja@arcweb.com or sharadap@arcweb.com.