Every company must be digital-driven to thrive
For any enterprise, especially publicly traded companies, it’s difficult to build a digital transformation strategy that spans years when investors are looking for quarterly results. To understand how large organizations are addressing these challenges, Bill Ruh, the CEO of GE Digital, provides some valuable insights. When asked how GE was approaching digital transformation, he replied with a simple, yet powerful statement. “ If you can’t master the idea of digital inside your analog business you open the door to commoditization ”. Therein is the challenge and the opportunity for an established company in an increasingly digital era.
GE is widely credited with creating the Industrial Internet of Things (IIoT) term that describes how the industrial sectors could deliver new value by embracing digital components in a physical industry. The company has also been focused on making this vision a reality by building products in this sector for several years. For example, GE saw an opportunity to reimagine every aspect of the electrical value chain.
During GE’s recent Minds and Machines conference, the company described how its customers, such as the New York Power Authority, are changing their businesses by infusing digital technology into a physical product market such as utilities. The New York Power Authority, with the help of GE technology, now calls itself the world’s first digital utility. It has worked with GE to create a real-time digital replica of its assets and automate many back-office processes. New York Power Authority views itself as the orchestrator of a network of power generation. In other industries, such as aviation, Ruh said GE’s customer could rethink who repairs the engine, how to repair the engine and who will give advice on how to fly them. So not only are companies updating technology, GE’s customers are changing their businesses.
Your client’s business outcomes drive the transformation agenda
The previous examples led to an interesting discussion on how companies need to perceive the process of digital transformation. For GE, Ruh indicated that creating an Industrial Internet product isn’t as simple as a vendor redesigning its products with new digital bells and whistles. Delivering new business outcomes for your customer is at the center of how any company should view its digital transformation efforts. For example, at GE designing technology that enables a zero-downtime environment can save a liquid natural gas plant owner up to $100M per day in lost revenue. This type of return on investment changes the value of the vendor within the Customer ecosystem by meaningfully expanding business opportunities and improving outcomes – for Customers and themselves.
For the business to business (B2B) markets, such as the industrial industries, it’s important to understand how your products will ultimately help your customer meet its end consumer’s need. A great example of this occurs in the solar market where you need to supply technology that allows the supplier to keep its costs low while providing features that deliver value to the end customer, such as information on energy consumption
In summary, these are examples of how digital initiatives add intelligence to a process – that is an important differentiator, a very compelling business value proposition, and provides competitive advantage. For a business to thrive going forward, these are critical qualities. And when combined with the ability to innovate for impact, the organization is well positioned for success and create significant wealth for stakeholders.
Jan 30, 2018 – CAIL – Innovation Industry Commentary