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How GE will bring the Industrial IoT to life

Thor Olavsrud | March 17, 2016
The venerable General Electric is undergoing a profound change as the result of digital transformation and the Industrial Internet of Things. Its evolution is providing insight into what's coming for the industrial sector overall.

In the industrial segment, the Internet of Things (IoT) is changing everything, or it soon will: From industrial equipment, to processes and the way people work, to business models and even core requirements, everything is shifting.

Few companies exemplify this trend more than 123-year-old industrial titan General Electric (GE), which announced in January that it will pull up stakes from its long-established corporate headquarters in Fairfield, Conn. and move to Boston — home to a large number of universities, enterprises and startups focused on technology and helping to drive the IoT revolution.

GE Chairman and CEO Jeffrey Immelt made no bones about the fact that the concentration of elite research universities — like the Massachusetts Institute of Technology (MIT) and the University of Massachusetts Lowell (UMass Lowell) — and tech firms put GE at the top of the list of potential homes for the company's new headquarters.

"We want to be at the center of an ecosystem that shares our aspirations," Immelt said in a statement at the time.

A digital revolution

But GE isn't just changing geographies. The whole company — with more than 300,000 employees and more than $117 billion in annual revenue — is undergoing a revolution driven by digital transformation and what GE calls the Industrial Internet of Things (IIoT). In September of last year, GE announced the creation of GE Digital a new unit intended to make digital the core foundation of GE's operations.

"As GE transforms itself to become the world's premier digital industrial company, this will provide GE's customers with the best industrial solutions and the software needed to solve real world problems," Immelt said in a statement. It will make GE a digital show site and grow our software and analytics enterprise from $6B in 2015 to a top 10 software company by 2020."

"With this alignment — backed by sustained investment — we will accelerate our efforts to build GE's digital strength and win in the Industrial Internet. We are building the playbook for the new digital industrial world by harnessing our horizontal capabilities including Predix, software design, fulfillment and product management, while also executing critical outcomes for our customers. This is the strength of GE."

Mark Bernardo, leader of Professional Services, Americas at GE Digital Services, says this transformation goes well beyond GE's corporate structure. It goes to the root of the company's processes and operations and showcases how digital transformation, IIoT and IoT will change other companies as well.

It almost goes without saying that GE's heritage is the Six Sigma methodology for business process improvement. Motorola engineer Bill Smith may have first introduced Six Sigma there in 1986, but the methodology gained powerful wings when Jack Welch, then chairman and CEO of GE, adopted it as GE's central business strategy in 1995. Over the course of five years of implementation, Welch credited the methodology with saving the company $12 billion.

 

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