Vendor integrator partnerships: System integrators partner with automation suppliers

System integrators are often courted by automation suppliers, but what’s in it for those involved?

11/05/2012


System integrators can benefit from the in-house, hands-on training often provided by suppliers as part of their supplier-integrator partnership programs. Courtesy: AutomationDirectSystem integrators typically implement complex automation solutions, often for a particular industry or a certain class of applications. While some system integrators prefer to remain completely independent from all automation suppliers, many choose to form alliances with certain suppliers, seeing benefits that outweigh the required commitment of time and cost. In many cases, these alliances take the form of membership in a suppliers' system integrator program.

Suppliers tout a number of benefits to these programs including leads to customers needing integration services; in-depth training, advertising, and marketing assistance; beta product trials; free product samples; and more. System integrators who participate in these programs also can expect to become extremely well versed in their suppliers’ products, and this in turn can create value for the integrator’s customers.

While many integrators view these programs as advantageous partnerships, some believe they face trade-offs when participating in a system integrator program. For example, some system integrators feel their customers will no longer consider them product-independent if they join a supplier program. Others are concerned about the cost and time commitment required for program membership.

But the main concern for most system integrators is competition from their supposed partners. A typical system integrator-supplier partnership will be most effective if the maximum amount of information is shared about existing and potential customers. To optimize information sharing, trust is required between the integrator and the supplier and between the integrator and supplier distribution channel. When suppliers and distributors choose to compete with integrator partners, it can make it much harder to establish and maintain close relationships.

System integrators can benefit from supplier partnership programs. Integrators should consider the right criteria to ensure they select the right program.

System integrator advantages

Most system integrators participate in one or more supplier partner programs, suggesting that in many cases benefits (Table 1) outweigh possible negative consequences.

Table 1: Benefits to system integrators from supplier partnership programs

 

1. Customer referrals

 

2. Listings and links on the supplier's website

 

3. Additional product and technical training

 

4. Beta testing opportunities

 

5. Input into product development

 

6. Cooperative advertising

 

7. Marketing expertise and marketing materials

 

8. Supplier endorsement and logo use

 

9. Technical writing assistance for trade magazine articles

 

10. Success stories published in the supplier's newsletter

 

One of the main benefits is added contact with a new client base as a result of being listed on a supplier’s website as a preferred partner. Compared to integrators, suppliers usually spend more money on developing, marketing, and getting traffic for their websites. This increases visibility without adding new marketing costs, other than nominal or non-existent fees charged for integrator membership.

Supplier websites may offer video training and other support tools for integrators and end users. Integrator websites typically have limited content. Relying on a supplier to provide such information can be more cost effective than developing and maintaining content on the integrator’s website.

On the supplier website, a good supplier system integrator program will highlight leading characteristics of each system integrator, such as expertise, location, and industry focus, providing distinctions among system integrators. It helps potential customers find the integrator suited to their individual needs.

Integrators also can get customer referrals from supplier technical support teams. These support teams are often the first line of communication for customers looking to upgrade or expand automation systems. This puts the supplier and support team in a unique position to supply detailed lead information to their integrator partners.

To make a referral program work, the supplier’s support team must be well organized and technically proficient. They must also be familiar with their company’s system integrator partners. Most importantly, the supplier and its distribution channel shouldn’t compete with system integrator partners for service business, as this will put the support team in the difficult position of deciding which leads should be supplied to integrators, and which should be kept in house.

Partnership programs typically offer a high level of supplier for integrators training through a variety of venues including online, at integrator offices, and at the supplier facilities.

Maintaining objectivity

While some system integrators forego all supplier partner programs for fear they will lose their independence and autonomy in the eyes of their customers, most do join one or more programs. Integrators know, as do most of their customers, that membership in a supplier partner program doesn’t obligate an integrator to use that supplier’s products. Rather, it simply gives the integrator more expertise with the supplier’s products, making the integrator a better service provider for customers.

System integrators often join programs from multiple suppliers so that they can be well-versed in a wide range of solutions. This approach can be quite expensive. Fees and training requirements to join and maintain numerous supplier programs add up, so care must be taken. It’s often better for an integrator to develop deep relationships with a few suppliers by joining their partner programs, while maintaining cordial but less formal relationships with other suppliers.

Possible pitfalls

Maintaining status as independent providers isn’t the only reason some system integrators avoid partnering with suppliers. As mentioned, many integrators fear they will compete with a supplier’s system integration services. This is a particular hazard with software products, because suppliers can easily obtain the identity of end users through the customer registration process. Virtually all suppliers provide various types of software to program their hardware, so this is a prime concern.

As this is such an issue for system integrators, why do many suppliers reserve the right to compete with their partners? Suppliers will say it’s because some customers and projects are best served by their own system integration group. System integrators can feel that suppliers are grasping for revenue, often at their expense.

System integrators aren’t as much interested in the supplier’s motivations as they are with avoiding instances where partners take business they think should belong to them.

The best way for an integrator to avoid competition from a partner is to select a supplier that doesn’t provide system integration services. If the supplier has an extensive distribution channel, then care must be taken; distributors sometimes compete with integrators.

When an integrator partners with a supplier that also sells system integration services, extreme care must be taken. Perhaps the best course of action is for the integrator to develop close relationships with the supplier’s decision makers, at least at the local or regional level where most integrators operate. These relationships don’t completely guarantee the supplier won’t compete with the integrator, but they can go a long way toward creating a partnership that keeps customers’ concerns at the forefront, while protecting supplier and integrator interests.

Growing pains

One complaint from end users is that certain suppliers make access to system integrator programs and requirements too easy. This hurts the end user who believes the system integrator is highly qualified by virtue of membership in the supplier partner program; it also can harm the supplier if the supplier has to step in and see that the job is completed.

As much as suppliers want to have a large number of system integrators in their programs, it’s better to grow these programs slowly to ensure the system integrators in the partnership are well trained and highly skilled in implementing supplier solutions. Requirements for certification must be rigorous, and some sort of ongoing training should also be mandatory to ensure the system integrators and suppliers maintain high standards. 

Online integrator-specific forums are a good way for suppliers to interact in real time with the system integrators in their partnership programs. Because the forums are online, answers can be posted that include detailed technical information, as well as

Many suppliers have some type of tiered system for their partnership program, with those integrators at the higher levels required to meet more exacting standards, and engage in additional supplier training. This can give customers the assurance they need for more complex projects that require in-depth knowledge of a supplier’s products.

Suppliers with a wide range of offerings often offer product-specific partnership programs, such as separate certifications for motion control solutions and programmable logic controllers (PLCs). Customers can look to these certifications as an assurance that a system integrator has an advanced level of expertise in their particular application area.

Direct sales versus distribution

Suppliers may use distributor channels or employ a direct sales model. An online direct sales model typically involves pricing, technical, and item availability information available through a website that acts as a 24/7 store, enabling technical and purchase decisions to be made at faster speeds than with traditional sales models.

By distributing its products directly instead of through a network of distributors, a direct supplier can avoid the conflicts that often arise from having multiple channels. But, a distribution network can either be a help or a hindrance to a system integrator.

A distribution network can help if the distributor is technically competent enough to not oversell the products, and if the distributor doesn’t try to compete with the integrator. Trouble can arise if the distributor promises more than the product can deliver, leaving the system integrator to deliver bad news to the customer. Competition can be especially troublesome if a distributor lacks technical competency, leaving the integrator to clean up the mess after the distributor has exhausted the customer’s budget.

In any case, a direct distribution model does change the dynamics between the authorized system integrators and their customers. Because the direct sales model is much more open, direct, and transparent compared to more traditional models in the industry, everyone involved (supplier, integrator, and end client) has more information with respect to product pricing.

This can affect the hardware portion of a project because clients have purchase acquisition options open to them that don’t involve the integrator. However, most customers typically rely on the expertise of the system integrator to select the best solution and equipment for their job, as well as to purchase the required hardware and software.

Greater transparency means customers have more knowledge of options available to them. In many ways this transparency improves customer trust in the system integrator’s quotes because it can easily access product pricing information and options available.

Each system integrator needs to carefully research the supplier partnership programs available and select the one that best suits its needs. However, certain criteria for successful partnerships pertain to all such programs (Table 2).

Table 2: Requirements for successful supplier-system integrator partner programs

 

1. Stringent membership requirements

 

2. Ongoing training

 

3. Minimization of conflicts with other channel programs and internal system integration business units

 

4. Methods for differentiating system integrators to potential customers

 

5. High level of continuing communications between integrators and supplier to establish and maintain trust

 

Regardless of what type of sales model or system integrator partnership a supplier employs, the supplier must remain committed to providing open communications for the program to achieve good results, such as through online integrator-specific forums. Ongoing training also is vital to maintaining a program that benefits the supplier, system integrator, and customer.

Perhaps the most important aspect in maintaining a valuable systems integrator partner program is for the supplier to provide high-value products that satisfy customers’ needs. While suppliers, systems integrators, and end users can all benefit from a supplier-system integrator partnership, the program will only be successful in the long term if it puts the end customers’ interests first.

More about the companies

Raynes Engineering is an AutomationDirect system integrator partner that primarily specializes in automation hardware and software, with emphasis on precision measurement and control, and networked communications. It mostly serves customers in the general manufacturing and medical product manufacturing and test industries. Specific applications include material handling, product assembly, and electroplating.

AutomationDirect, located in Cumming, Ga., differentiates itself from many other suppliers by using a direct sales approach. The company is a supplier of industrial controls and automation products with a business model built on the concept of direct interaction with the customer, rather than relying on an extensive distribution network.

- Tim Roberts is system integrator direct program manager, AutomationDirect; and John Raynes is president of Raynes Engineering, a system integrator. Edited by Mark T. Hoske, content manager, CFE Media, Control Engineering, mhoske(at)cfemedia.com

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