Digital Industrial Transformation Playbook
Business model innovation pillar
Introduction
In December 2016, GE Digital unveiled its playbook for digital
industrial transformation. Based on our own transformation
journey, the playbook helps other industrial companies
leverage the tools, techniques, and technology GE used to
transform into the world’s leading digital industrial company.
Industrial companies are entering a new period of change
marked by both opportunities and threats. Those who
embrace digital transformation have an opportunity to
drive a step-change in operational productivity. In addition,
digitization enables industrial companies to develop
operational agility. For industrials, business model innovation
relies on operational agility. The stakes are immense.
McKinsey & Co. reported that the Industrial Internet of Things
(IIoT) would create as much as $7.5 trillion in value by 2025.
One thing is clear—the Industrial Internet is not optional,
and it is as important to leadership and the future of industry
as the adoption of electricity was in the last century. Early
adopters are more likely to find lasting results. For those who
lag behind, the future might not be as bright.
GE’s capabilities and operating model for
becoming a digital industrial
In 2010, GE made a strategic decision to move from a Transformation in any company is complex, and GE is no While all these initiatives play a critical role in the
defensive market position—where we saw new IoT market different. It requires change across people, processes, and implementation of digital transformation across an enterprise,
entrants as threats to our service contracts—to a growth- technology. In order to accomplish transformation at scale, it’s important to consider your goals for growth and business
oriented market position where we focused on providing a we broke the challenge down into five key focus areas for model change. In this white paper, we will discuss how you
rising tide that lifted all ecosystem participants. digital industrial transformation: can transform your business model and internal operations in
Our path to realizing our strategy is straightforward. 1. We created a new business unit called GE Digital order to deliver new forms of value through digitization.
as the organizational mechanism to drive change,
01 GE for GE providing us with the operating model and organizational
capabilities to become a digital industrial.
Use our new capabilities to drive internal productivity
2. We built Predix the platform for the Industrial Internet
and cost improvements.
to enable GE and our customers to start at the innovation
02 GE for customers layer rather than reinventing the IIoT wheel.
3. We created an open-innovation partner ecosystem
Leverage the insights and capabilities born out of our that our customers leverage across industrial markets and
internal productivity work to offer a complete set of industrial outcomes.
industrial applications. 4. We systemically drove culture change. We needed
to develop the necessary processes for rapid decision-
03 GE for the world
making, iterative improvement loops, and an ongoing
people management process to ensure that the culture
Make our Predix platform available to everyone doesn’t reject the transformation.
for co-creation and innovation across virtually all
5. We rethought how all of these factors may impact
industrial categories.
our customers’ business models. And we created
a Digital Transformation Blueprint service to help
customers leverage business model innovation within
their own markets.
What is business model innovation?
Business models describe how a company creates and captures value. For industrials, business
model innovation often means transforming a product or service into an outcome delivered
as a service. The migration to “X-as-a-Service” will not be profitable without world-class
productivity enhancements to drive margins and exceptional operational agility to respond to
new market dynamics. By internally transforming your business model and powering it with
IIoT solutions, you will be able to maximize ROI and boost operational efficiency. But, in order to
successfully change your business model, your organization must first:
• Drive internal improvements that self-fund the next step in your transformation journey
• Build the operational agility needed to innovate at the business model level
• Enlist internal champions early and build the momentum needed to drive more
radical transformation
At GE, we’ve witnessed business model transformations first-hand within our own company.
If you looked at GE Power a decade ago, you will find an organization that sold gas turbines and
other power generation hardware. Fast forward to today’s digital industrial age and the business
model for GE Power has vastly changed. Now, GE Power is more than just power generation,
providing additional services and capabilities such as improving the uptime of our turbines.
Build vs. buy
One of the first decisions a company must face in its digital They must build new departments; recruit and retain the So, the gap between investment and the first return on
transformation journey is whether to build its own solution right talent; align network capabilities and operations; investment is much greater than with a pre-existing
from scratch or to engage an outside partner. We call this consider the impact on commercial operations; develop solution. GE's Predix affords companies the luxury of starting
“build vs. buy.” Companies who decide to build its own new billing and financial strategies; and more—all before at the innovation level rather than at the ground floor. This
industrial-strength, enterprise-grade digital industrial solutions the first application goes to market. means that process improvements are identified quicker,
face a massive ramp-up just to get to the starting line. value-add applications go to market faster, and revenue
begins flowing sooner.
Edge Cloud Apps
Connectivity and Insight Application Services Visibility and Insight
Connected Assets Digital Twin Modeling and Analytics
Asset Data Event
Orchestration Operations
Services Services Services
Edge Predix
Assets Analytics Machine
Data Connectivity and Ingestion
Gateway Industrial Intelligence Dashboards
Sensors
Assets
Controller
Assets Operations Business
Edge Appliance Enterprise OT External
Systems Systems Sources
End-to-End Security
A real-world business model transformation:
Pitney Bowes—which provides global e-commerce solutions, More specifically, Pitney Bowes was also looking to accelerate Pitney Bowes knew that it needed to transform
shipping and mailing products, location intelligence, customer its long-time goal of driving innovation within its big industrial its service models in order to:
engagement, and customer information management mail equipment. One of the main challenges that the
solutions—has become a pioneer in the digital industrial age. company was facing was with its large-scale mail inserter
The company has been closely working with GE Digital over machines. Anytime one of its customers experienced an
the last two years on its digital transformation to become a issue with a mail inserter machine, a Pitney Bowes technician
global, cloud-enabled, cross border e-commerce company. would show up on-site to repair it. This wasn’t cost effective
for Pitney Bowes and didn’t deliver added value to the
customer—a lose-lose situation. Improve service Increase revenue
value for its clients
Gain savings in Innovate faster
field support
By partnering with GE Digital, Pitney Bowes was able to achieve:
Increased client Identified up to 35 Accelerated Optimized Reduced time for Improved Launched Clarity app
satisfaction hours of potential time-to-market operations troubleshooting cyber security within 12 months
additional runtime from days to hours
per month
With these specific goals in mind, Pitney Bowes assessed Pitney Bowes also leveraged Predix to gain more insights With real-time machine data driving decisions, Pitney Bowes
its existing organizational structure and realized that its into how its mail inserters operate at the machine level. was also able to streamline operations and reduce time-to-
focus was not in the right place. The company decided By adding sensors to its equipment and capturing sensor market for new products. Troubleshooting and maintenance
that its existing business model didn’t work if it wanted to data from the connected systems, Pitney Bowes was able time were cut from days to hours and diagnostics have
continue to be a leading digital industrial organization. Pitney to co-develop an app, Clarity, with GE Digital. Clarity is an become infinitely more accurate. Because Predix allows
Bowes knew that it needed to transform its business model innovative Industrial Internet application that turns real- development to begin at the innovation layer, Pitney Bowes
internally to maximize the success of its new IIoT solutions time operational data into actionable insight to optimize was able to launch and monetize its first app within 12 months,
and sustain business results performance. With Clarity, Pitney Bowes can make better- increasing client satisfaction and service contract retention.
In order to better implement these new technologies informed decisions on when equipment needs to be And by using new analytics that analyze the historical data
across the enterprise, the company underwent an internal serviced—gaining additional machine runtime for its clients already collected in Predix, Pitney Bowes is also adding
reorganization and created an IoT service group to closely and saving on emergency on-site repair visits. two new applications—an operator productivity app and a
align the desired outcomes. With its new organizational This approach had an immediate effect. For one, the dynamic job scheduling app—to further increase revenues
structure in place, the IoT service group focused on leveraging company identified a potential of 35 hours of additional and client satisfaction.
data insights to proactively maintain systems at customer runtime per month which could result in thousands of Since many of Pitney Bowes’ customers operate in extremely
sites to avoid machine failure. dollars of added revenue. Without the right data and the sensitive and highly regulated industries such as healthcare
power to analyze it, those hours would’ve remained buried. and the financial sector, cyber security is a constant
consideration. Predix addresses this with a sophisticated
suite of embedded compliance and audit processes, layered
with a variety of advanced security controls.
Digital Transformation Blueprint
For many companies, getting started is the hardest part. At GE Digital, we make the first steps
easier with Digital Transformation Blueprint services. The process starts by interviewing key
stakeholders to get an understanding of your desired business outcomes, KPIs, company culture,
leadership structure, and overall vision.
With this information in place, our digital transformation experts deliver the following.
• Readiness Assessment
An evaluation of your data health, operations, and readiness for change
• Competitive Benchmarking
As assessment of how your cost, reliability, and availability metrics compare to your competition
• Digital Transformation Blueprint
A customized adoption roadmap designed specifically to achieve your business goals
• ROI Planning
A clear value plan with the ability to track investment progress
Your Digital Transformation Blueprint provides a clear and actionable path forward based on your
specific needs, goals, capabilities, and cultural tolerance for change.
Your next step You need to take stock of the direction you want to go, the capabilities
you’ll need to get there, and the short-, mid-, and long-term steps
Download the entire GE Digital
needed to make the vision a reality are absolutely essential.
Industrial Transformation Playbook
Digital industrial transformation is a process, with significant At GE Digital, we have some exciting ways we can help you along
rewards for those who stay the course, and significant risks for your digital industrial journey. From services to help you map out a
those who execute poorly. GE has been on this journey for the digital industrial blueprint, to our GE Digital Foundries around the DOWNLOAD NOW
better part of 10 years, and we have learned a lot in the process. globe, designed to bring teams together to define outcomes using
We’ve seen what works, and perhaps even more critical, we’ve seen capabilities such as design thinking, data science, and a team of
what doesn’t. A holistic approach is vital to ensuring transformation engineers and GE domain experts. We look forward to assisting you
is a long-term endeavor that delivers sustained results. throughout your digital industrial transformation!
About GE
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines
and solutions that are connected, responsive, and predictive. GE is organized around a global exchange of
knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets,
structure, and intellect. Each invention further fuels innovation and application across our industrial sectors.
With people, services, technology, and scale, GE delivers better outcomes for customers by speaking the
language of industry.
Contact Information
Americas: 1-855-YOUR1GE (1-855-968-7143)
[email protected]
www.ge.com/digital
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Specifications are subject to change without notice. 06 2017
