When Bob Ott dreamed up an idea for a new product, he never imagined what a nightmare it would be to get it out on the market.
Ott, an electromechanical engineer and president of Tru-Measur, a New Hampshire-based company that manufactures state-of-the-art liquor dispensing systems, spent six years and more than $300,000 on engineering costs to develop the idea for a wireless bottled-beverage audit system. But, he ended up with a product that didn't work and that would have been too costly to manufacture even if it did.
"We blew a lot of money with the engineers that took on the project initially and they actually didn't even know how to start it," Ott says.
Today, the situation is drastically different for Ott. He has a completely redefined product about to hit the market. He has a new business partner. He has purchase commitments from 1,400 prospects. He's bringing in investors to help step up manufacturing. And he's poised to take in millions of dollars in sales.
For Ott, it was a systems integrator that defined the difference between disaster and success. Last year, Ott sought help from Chris Harrises, president of Technical Solutions, another Granite State company that specializes in embedded systems and develops hardware and software for products worldwide.
"Bob came to us with a version of the product that was non-functional and too expensive to manufacture," Harrises says. "As a result of doing market research, we defined a new product."
That product is Intellipour Jr., a vastly different version of its original wireless bottled beverage audit system. The system will soon be deployed at a number of beta sites—casino bars in Las Vegas, Reno, and Laughlin, NV.
Harrises' company is a prime example of a growing trend. Thousands of successful small systems integrator companies that specialize in a specific niche are emerging across the nation and around the globe. That's because product design engineers and other professionals are increasingly in need of the specialized hardware and software solutions offered by these systems integrators.
"There's been a general shift in philosophy about how companies develop products to get them out to the market," says Jack Barber, partner development manager at National Instruments, a leading provider of software and hardware for computer-based measurement and automation systems. "The folks in product design are focusing on what they are really good at and are looking at outsourcing their non-core competencies."
While the systems integrators that are part of the alliance program at National Instruments are often focused on a particular specialty, they are spread out across a wide variety of industries, including aerospace, automotive, medical, telecommunications, electronics, and many others.
It's difficult to get a true fix on the number of systems integrators in the global marketplace, in part due to the fact that they are so diverse in nature. But it's easy to see why systems integrators are being tapped for product solutions.
Systems integrators provide product design engineers and other clients with a variety of benefits, including expertise, cost savings, and flexibility.
"It's nice if you can find an integrator who knows something about the product being designed and is a general expert in measurement and automation. That's the ideal situation and it's an indication of why there are so many different systems integrators instead of just one large shop that takes care of many different needs," Barber explains. "Every widget has its own nuances for what needs to be tested and the better the systems integrators understand the nuances of that device, the better they can design a measurement and automation system."
DAQTron, a systems integrator company that specializes in broadband and telecom test systems, is a member of the National Instruments alliance program. Company founder and president Robert Sandage agrees that expertise is a key need and says his customers are looking for both standardized and custom test solutions, as well as the ability to automate the tests.
"With products such as cable modems, the profit margin is shrinking so much that being able to test in the least expensive fashion is important. Some of our customers are paying $2 to $3 million a year just to get the testing performed, whereas our system is much less than that," Sandage says.
Buck Smith, president of Cal-Bay Systems, a systems integrator that provides test, measurement and automation solutions for a wide range of industries, says a lot of companies see the value of outsourcing, especially when time is of the essence.
"A lot of the time, they want to ramp up quickly and they don't have the expertise in-house. They are looking for somebody who can hit the ground running within a week or two of first contact," Smith says. "Operational flexibility is provided by using contractors."
Technical Solutions' Harrises says flexibility is an attribute that can also make systems integrators very cost effective for customers.
"Part of that is keeping a low overhead. The consultants help with that. Senior engineers are expensive," Harrises says. Technical Solutions currently has four full-time employees and usually between two and eight consultants on the payroll as well.
Flexibility and cost savings were what Peter Dikeman was looking for when he hired Harrises. Dikeman, vice president of engineering at Corex Technologies, included Harrises on his virtual engineering team to take care of electronics issues when the company was redesigning the first version of CardScan, its popular business card scanner.
By redesigning the product and including a very reliable, fast, RISC-based microprocessor, they were able to remove $40 from the total bill of materials.
"It's allowed us to really remain healthy and have healthy profit margins, which is difficult for hardware manufacturers. If you look at the flat bed scanner market, it's gone through a huge shakeout in the last few years," Dikeman says. "Not only did we lower the price, we got it going about twice as fast through good design."