Keywords: Automation Services, Automation Suppliers, Operational Services, Value-Added Services, Performance Services, EPC, MAC
The services business remains one of the top growth opportunities for automation suppliers today and one of the best ways for end users to take advantage of the growing expertise of suppliers to help reduce plant maintenance, operating, and project costs.
Growth in operational-related automation services has outpaced hardware sales and project services as end users continue to focus on core business and reducing costs. According to a recent ARC market study, the market continues to have robust growth. ARC expects that all suppliers will continue to develop innovative operational solutions to help address the changing business climate of their customers. “End users’ interest in value-added services continues to grow as they realize the value their suppliers can provide while facing shortages in qualified personnel,” said Mark Sen Gupta, Senior Consultant at ARC and principal author of ARC’s “Supplier Provided Automation Services Global Market Research Study”.
Automation Services Market Growing with Challenges
Today, we can see that the automation services business is experiencing a transformation. In the prevailing economic uncertainty, many end users face increasing challenges and continue to seek solutions to maintain competitive advantage and profit margin.
Though economies around the world are improving, economic growth remains soft. As a result of several major projects running significantly over budget, end users are putting increasing scrutiny on capital expenditures going forward. As the size and complexity of mega projects continues increasing, the difficulty of managing the projects continues to increase for suppliers. Mega projects in the oil & gas market, in particular, are increasing in complexity due to complex geology, increasing water depths, heavy oil, and harsh conditions. As a result of these increasing challenges, the cost of several major projects have run significantly over budget while the price of oil has remained relatively flat, threatening the profitability of the projects. The declining profitability of some mega projects has forced companies to cut costs wherever possible. Operating costs continue to offer huge untapped opportunities. Project costs also continue to be quite high, though many suppliers continue to address this in an effort to win new business. Materials costs have stabilized in the past several months. Shale gas offers a new opportunity for reduced feedstock and energy costs, as well, and is contributing to the increased investment in the US.
The result is that technology users rely on suppliers to provide a continuously expanding scope and depth of automation-related services. This report zeros in on many of the core areas of services that are experiencing more rapid growth and how end users can work with suppliers to reduce costs and provide a path to operational excellence.
For more information on this ARC study, please visit our Market Research section.