Integrators Morph into Engineering Firms

Oct. 10, 2008
Automation Companies are Missing Out on A Significant Slice of Revenue by Not Offering Process/Mechanical and Civil/Structural Work with Their Automation Projects
By Dan Hebert, Senior Technical Editor

Most system integrators focus on the automation, electrical and instrumentation needs of their clients. In the process industry, these three areas make up about 20% of a project. The other 80% is mechanical, process and facilities work. Most system integration companies decline this work, leaving the lion’s share of project revenue to others.

But some enterprising firms have decided to take on this work themselves. “Our firm, Mangan Inc., decided 14 years ago to expand from our system integration roots and become a full-service engineering company,” says Steve Simmons, operations manager of the Long Beach, Calif., office.

“In our company’s early years, any required mechanical work was executed by a partner,” he says. “After four years as an automation-only company, we decided to add internal staff to perform other tasks by hiring our first mechanical engineer in 1994. We wanted to provide one-stop shopping for our clients, and we were missing out on a significant slice of revenue by not offering process/mechanical and civil/structural work associated with our automation projects.”

Mangan started slowly and expanded its services as its expertise grew. “Our mechanical work initially consisted of the valves, piping and actuators associated with our system integration work,” recalls Julie Caldera, PE, program manager for Mangan.

“After hiring a mechanical engineer and a piper, we began bidding on small-to-medium, multidiscipline engineering projects with existing clients, usually complementing some facet of an automation project,” explains Caldera.

Later on, its services expanded significantly. “Fourteen years later, we have a full complement of multidiscipline engineers and designers, and we offer all the engineering services that normally go along with automation projects. In addition, we perform many multidiscipline engineering projects that have very little automation,” concludes Caldera.

In addition to automation engineers, Mangan now employs chemical, industrial and maritime engineers and a civil/structural engineering consultant. It also has several piping/mechanical designers and a civil/structural designer on staff.

At Mangan, multidisciplinary projects now constitute about 30% of its project total and an even higher percentage of total revenue.

Mangan employees’ understanding of the total project is now much improved, as the automation employees work side-by-side with professionals from other disciplines. This helps increase understanding of the entire project scope, a clear benefit to automation efforts.

As with any new venture, there were challenges. “We had to learn to market new services to existing clients, and we had to adapt our job safety analysis and risk management techniques to address process/mechanical work adequately—and convince our own automation engineers that we could offer added services with a high level of quality,” observes Caldera.

While Mangan hired internal staff to expand its services, other firms prefer to go a different route. “There are benefits to including mechanical work in projects, the primary one being that you are able to offer your customer a complete solution,” says Michael Gurney, executive director at system integrator Concept Systems. “We have established partnering relationships with top-notch mechanical design/fabrication houses that have an appreciation for controls,” adds Gurney.

“Good controls with a poor mechanical design is problematic, as is poor controls on a good mechanical design. Each is integral to the other, and the design needs to be approached as such. If a customer wants to synchronize two belts, he or she can do it with a chain or with two servo motors, one a mechanical solution and the other a controls solution. Establishing the guidelines for such conflicts upfront is critical to a sound working relationship,” advises Gurney.