No one wants to be stuck in the past. It becomes difficult to relate to others, makes it hard to get excited about the future, and can get plain lonely sometimes. But when companies get stuck engaging with cumberstone legacy systems or old-fashioned ways of thinking, the past is where they remain, forever dusting off their assets.
General Electric (GE) was incorporated in 1892, and its history stretches way back to Thomas Edison. In recent years it’s moved far past its electrical roots, and has completely re-imagined itself as a software-driven and data-driven manufacturer.
Evidently the way forward for companies is to become more agile using cognitive outcomes, rather than focusing on legacy processes. Here’s what you can learn from the GE transformation:
Focus on a Core Business
GE once focused on building electrical consumer goods. But the company now connects those machines so they may be serviced, monitored, and hopefully diagnosed for problems before they happen, says GE CMO Linda Boff.
So rather than building washing machines and refrigerators, the company’s now a leader in the software-driven manufacturing space. GE introduced the Industrial Internet five years ago, and the concept’s completely changed the way manufacturers do business. Hardware no longer exists on its own, but equipment is now powered by software and analytics to deliver valuable insights. And to make the Industrial Internet flourish, GE has spent $1 billion on a Global Software Center in California, and more than 400 software professionals were hired to make it tick.
However making the shift to a data-driven manufacturer wasn’t easy. To put its plan into action, GE had to make some pretty tough choices - including selling off profitable units like GE Finance. But with GE expecting its software revenue to hit $15 billion by 2020, it’s evident the decision to reinvent itself was a correct one.
No matter what kind of industry you are in, it’s imperative to decide what type of company you want to become - and more, to leverage the latest technologies to achieve that end. Because if GE’s core businesses had never shifted or expanded, we might still be stuck using the plain ol’ lightbulb.
Get Lean and Mean
Being innovative requires creativity. It also means taking risks. However, risks can be reduced by getting customer opinions as soon as the idea is born. And GE devised a brilliant technique to put this process into action, called “FastWorks.”
The program is built on the Lean Startup Methodology and “combines a set of tools and behaviors designed to deliver better outcomes for customers faster.” To do so, GE initially trained 500 external experts on lean startup principles, and 150 coaches were handpicked to advise GE managers across the globe. If the managers wanted to put their projects into action, they needed to pitch the ideas to external growth boards to be approved, and have resources allocated.
So how has getting external customer feedback on ideas helped GE? Well, it’s saved them some serious cash. In one division, FastWorks cut development costs by more than half. And in another, it reduced the time to customer validation by 80 percent.
In today’s market, being sharp like a startup is the key to success. So make sure to embrace an agile culture that can streamline every aspect of your business, whether you’re a startup, or not.
Embrace Data-Driven Decision Making
Everyone wants to have a chief data officer. But hiring someone to fill the role doesn’t make you a data-driven organization - there’s no magic potion to analytics success. To really create value and make the data transformation, you need to constantly push the boundaries.
GE Digital CEO, Senior Vice President and CDO for GE Bill Ruh writes this in the blog, entitled, Waking up as a Software Analytics Company:
“It’s not enough to connect machines. You have to make your machines smarter. You need to figure out the best ways for embedding intelligence into machines and devices. Then you need to develop the best techniques for collecting the data generated by those machines and devices, analyzing that data and generating usable insights that will enable you to run your equipment more efficiently and optimize your operations and supply chains.”
Take it from one of the best: it’s imperative to harness the power of AI and data to make your 21st century business smarter, and gain access to insights that weren’t available before.
So if a 225 year-old corporation can leave its legacy processes by the wayside and transform into a data-driven machine, there’s really no reason you can’t do it either. By finding your core business, getting lean, and embracing data-driven decision making, you’ll be well on your way.
Sundeep Sanghavi is a cognitive computing veteran and Industrial IoT pioneer based in Washington DC. He is CEO and co-founder of DataRPM, a Progress company. They were acquired for $30M by the NASDAQ listed software giant in March 2017.