The Great Contractor vs. Integrator Debate – 2011 version

I was reading an article that I wrote in 2001 about transitioning your business from a contracting company to a systems integration company. In it, I wrote that we need to shift our thinking from being a sub-contractor to that of a systems integrator. I added that integrators will be able to command higher margins, won’t be tied to construction-based hourly rates, and will be perceived as representing a high-technology company.

So now fast forward to last week. While I was networking with the leaders of some of the very best, brightest and most successful systems contractors and integration firms, the question was asked once again: who here considers themself to be an integrator versus a contractor? One gentleman said he had fully transitioned into being a systems integration firm. Another said he had stayed true to his focus of being a systems contractor and had done so to maintain his relationship with other contractors on projects as well as architects and construction management firms. To transition to systems integration could cause us to alienate those companies, he said.

The integrator asked the contractor what types of systems and scope of work his company does. The contractor described his products and services in a way that would rival the most sophisticated integrations firms, including IT skill sets, advanced programming, a recurring revenue model, design-build strength, etc. They do these systems in the exact format of the integration model.

The contractor asked the integrator, “What do you do during your typical day?” The integrator replied, “I manage contracts, approve the proposals, fight with other trades, work on receivables and cash flow, etc.” He performs these services just as a contractor would do.

I found this pretty funny. The contractor described himself as an integration company and the integrator described what most contractors do. It makes me wonder if there truly is a defined difference, or if most of this is a marketing and messaging position that you take.

Those who prefer the label of “integrator” find that it describes a multifaceted organization capable of performing a variety of work on many different technical systems … and they like how that sounds. Those who prefer the label of “contractor” find that it describes a company capable of performing a predetermined scope of work as outlined in the construction documents.

I guess, in the end, it comes down to this commonality … we all have to manage risk and contracts. I find that the contracting part is very similar no matter what you call yourself. Contracting companies simply prefer to leverage the method of the transaction (similar to a retailer, or wholesaler) as their focus, rather than the service they perform. Integration companies prefer a more descriptive term for the advanced level of work they do. How do you describe your company? — CW


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