In this issue, we premiere the Automation Index by ARC Advisory Group. This exclusive-to-Control tool is a way for us all to see, not the health of the economy in general—that is what the Dow Jones and the S&P and NASDAQ and the other indices around the world are for—but the health of the automation industry specifically.
This index is developed on a quarterly basis by the analysts at ARC Advisory Group and was formerly reserved for their paying customers. As a part of the ongoing alliance between ARC and Control, we are pleased to bring it to you for the first time. We will bring the Automation Index to you four times a year to help supplement the information in the Control/ARC Top 50 report that we publish every December.
The Automation Index takes the pulse of the process industries, and since we are all employed in either the process industries or the automation companies that serve them, that pulse is extremely important to us all. When the economy is going downhill, the process automation industry lags the economy by nearly a year—the effects of the 2008 recession weren't really felt until 2009. But the automation industry is on a shorter cycle than the economy. We began to see the effects of the recovery about six to eight months earlier by looking at new or revived automation projects.
If you work in the process industries, the Automation Index can tell you a lot about the possible future of your job and your company's performance in the marketplace.
This is another example of the continuing tightness of the integration between control systems and the business systems. Automation practitioners, as the late Vernon Trevethan. pointed out when he led the development of the Certified Automation Practitioner (CAP) certification program for ISA, need to be skilled in a large number of disparate disciplines, especially on the business side.
It is increasingly difficult to gain funding for automation projects "because it is cool" or because the vendor released a new version. The time for that is long past. The way you get an automation project funded is to make a business case for it in terms of productivity or additional flexibility or increased integration between the plant floor and the business systems. In other words, you have to show how you plan to pay for it.
In addition, you're going to be competing with other cash-intensive capital projects, such as, oh, repaving the parking lot or putting a new roof on the plant office building. These days, many management staffs do not see the difference between upgrading the control system and doing other capital maintenance projects. Your management needs to be shown that if you repave the parking lot, you don't get any ongoing payback, but if the control system is upgraded or new sensors and control loops are installed, the payback can be quick and extensive. You need to show how you can do better with fewer people through having a better control system, and show how that will quickly pay, both in increased throughput and in increased profitability. You will also have to show how the project benefits the enterprise at large.
These are very different goals from the goals process automation professionals had when Control was founded a generation ago. As I said in the Readers' Choice Award article in last month's magazine, there are many differences between the way we worked back then and the way we work now, and even into the future. Our successors will do jobs that are very different than the ones we do now. Our jobs are changing, and we have to change with them.