The term system integrator is used for job profiles in information technology (IT), systems engineering and industrial automation technology. System integrators are companies in the IT industry that sell, adapt, expand and integrate software and hardware products from other manufacturers into their customers’ IT landscapes. Customers include medium-sized and larger companies, such as banks, insurance companies and public administration (authorities, associations and the like). Since administrative units have the greatest need for tailor-made solutions, database applications are the main field of activity.
More than 60 percent of IT companies’ revenue is generated by IT consulting, individual software development and system integration.
Role and Distribution Channels
System integrators act as intermediaries between software and hardware manufacturers on the one hand and commercial or public end customers on the other, and play a key role in the marketing strategy of most software and hardware manufacturers. Often, they do not even purchase their products directly from the manufacturers, but from wholesalers (distributors).
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The distribution channel via system integrators and, if necessary, also via distributors is called “indirect sales”, in contrast to the rather rare direct sales to end customers. However, some large manufacturers (e.g. IBM or Canon) also take on the role of system integrator themselves by setting up independent divisions or subsidiaries for this purpose, which are then often authorized to distribute products from competitors in order to offer a certain degree of neutrality.
The system integrators are usually very sales-heavy: they regularly participate in tenders and maintain a personnel-intensive office and field sales force. On average, distribution costs account for about one-third of companies’ total costs. Accordingly, they buy the products at a discount, and the daily rates for their own services are correspondingly high.
Most system integrators are medium-sized companies with a strong regional and industry focus. Larger companies (e.g. Accenture), on the other hand, operate more or less globally and often also offer outsourcing and consulting services. However, the combination of consulting and service always carries the risk of conflicts of interest that restrict competition and is therefore sometimes viewed with suspicion by the public.
While some system integrators specialize in individual solutions, many distinguish themselves as solution providers with their own industry solutions or as partners of standard software manufacturers such as SAP.
Similar to consulting firms, customers expect system integrators to be largely independent of manufacturers, but this is rarely the case in practice. Many are bound by close and sometimes even exclusive contracts with certain software or hardware manufacturers and use and distribute their products almost exclusively.
