Building an industrial digital ecosystem
GE Digital began as GE Software, a Center of Excellence within the General Electric conglomerate, and with the launch of GE Digital in 2015, had a mandate to gather the company’s digital capabilities in one organization and serve the digital needs of GE’s myriad business units.
“We were looking for internal efficiencies and ways to improve our asset connectivity, asset performance management, and operational performance management” said Karthik Suri, GE Digital Senior Vice President and Chief Operations Officer.
It became clear almost from the outset that although each of the businesses in the GE company were unique, they had many similar challenges and needs when it came to capturing, analyzing and using data to drive new outcomes. In meeting those common needs, GE Digital built capabilities that could translate into reusable, repeatable products with industrial equipment in mind. For example, a large part of a solution for a problem faced by the aviation unit could theoretically be productized and applied to the Power business (with some level of vertical overlay along the way).
In time, and with some strategic acquisitions, GE Digital evolved into a standalone business unit inside GE, one that not only served internal clients, but also marketed its platform capabilities to GE’s installed base customers and eventually to external industrial customers outside of GE’s typical verticals. In addition, GE Digital forged a variety of partnerships to build an ecosystem around these solutions, helping solve major customer pain points. As with the GE units, developers at partner companies would start with the GE Digital platform and then customize an application to address more specific needs.
The result is a robust digital ecosystem with more than 1,000 managed participants that fall into one of five categories:
- system integrators, who help take the solution to market and make it fit to the purposes of the customer;
- independent software vendors, who write applications that plug into the platform and that can be reused;
- tech partners, who provide hardware or underlying cloud capabilities;
- channel partners, who understand the customers’ needs;
- the customers themselves, who customize code to meet their own needs.
Industrial internet of things
GE Digital has been a key player in the development of the Industrial Internet of Things (IIOT), which combines data from machines, advanced analytics, and talent with domain expertise to create systems that collect, store and analyze data to deliver insights that improve productivity. To help advance the conversation and drive a common approach to the IIoT, GE Digital was one of five founding members of the Industrial Internet Consortium (IIC) with companies from across the technology spectrum (hardware, connectivity, storage, cloud, etc.) Through the consortium, IIC members have the opportunity to set the industry’s best practices that will help move the IIOT forward and shape the future of the industry.
One of the more interesting functions of the IIC lies in its promotion of testbeds.[i] These testbeds are where the innovation and opportunities created around the Industrial Internet – new technologies, new applications, new products, new services, new processes – can be initiated, explored, developed and rigorously tested to ascertain their usefulness and viability before coming to market. The outcomes from testbeds are the cornerstones of a feedback loop that extends from concept to reality and back, providing key guidance for further innovation.
IIC members also participate in working groups. “These are a great way for different ecosystem participants to talk about specific cases, practices, and reference architecture and start building. So, the IIOT has a set of standards and capabilities that others can significantly benefit from,” said Suri.
Managing a digital ecosystem presented many challenges. First among them, Suri shared, was understanding GE Digital’s core competencies and how these would or would not apply to platforms. For example: early in the process, GE Digital built its own data centers. However, it became clear there were partners whose scale GE Digital could leverage and provide the services more effectively, allowing GE Digital to focus on developing truly differentiating technology for industrial customers.
“Understanding that differentiation was key to allowing us to go out and forge partnerships that help us bring our digital industrial products to life.”
Another challenge lay in the “negative network effect” that came with the growth and expansion of the platform. “When you think about an industrial platform, it is more important to have few deep partnerships that fill the white-space to solve customer problems than thousands of ecosystem participants that offer disparate solution sets,” said Suri. “Our customers expect a deep relationship with our partners, plus good understanding of the domain and the ability to solve very specific problems.”
And then there was the challenge of shifting the traditional mindset from “project” to “product” where it is just as important to extract learning and insights from a particular “project” so that it can lead to the development of a “product” that can be applied more broadly. The people who worked for GE Digital had to switch to a product-oriented mentality. “A major learning point was the cultural transformation that had to occur when we started asking for a platform that lent itself to co-innovation and generating quick, positive outcomes for our customers,” Suri said.
Revenues are important metrics of success but there are others that Suri looks to when evaluating performance. In the big picture, he wants to see that the agenda of digital industrial transformation is moving forward and to ensure that GE Digital continues to play an important role in shaping that process – a good measure of this is the number of lighthouse customers for new, innovative products. On a similarly macro level, GE Digital looks at the share of overall ROI – and more importantly payback period – of its customers, which translates into reference-ability and advocacy tracked quantitatively.
Closer to home, GE Digital looks at the customer experience. They need to know if they have the right capabilities to offer timely solutions to customer issues. GE Digital also measures product use, including factors such as reliability, scalability, availability and how products are delivered. An example is the Predix Manufacturing Data Cloud (MDC), which enhances the computational abilities of a network of machines by improving individual machines that actually learn from each other.
Finally, managers pay close attention to culture and talent. “We look at our own talent evolution and their adoption of core software capabilities, through a system called ITM or Integrated Talent Management framework,” said Suri.
Security and governance
Many of the solutions GE Digital and its ecosystem partners provide rely on data to drive outcomes. However, the company is aware of privacy concerns and maintains strict discipline when it comes to data. “We are clear that our customers own their data,” said Suri. “We never assume data sharing by default.”
To ensure that security receives due consideration, GE Digital employs a dedicated team who drive the concept of “secure by design.”
“Security is not an afterthought,” said Suri. “It is not a testing or auditing function. It is a set of capabilities and practices that is integral to the design throughout the building, launching and ongoing maintenance of a product.”
In other words, security features are part of every product from the very initial stages of conceptualization and development. Suri considers this approach to security as one of GE Digital’s fundamental capabilities, one that influences both engineering and business decisions.
The future for GE Digital
GE Digital is entering its next exciting phase of evolution. In December 2018, GE announced plans to establish a new, independent company focused on building a comprehensive IIoT software portfolio. The GE-owned company will bring together GE Digital’s core software business with GE Power Digital and Grid Software Solutions – and will start with $1.2 billion in annual software revenue and more than 20,000 customers globally.
Organizational and strategic change at the parent company over the past year means that the individual businesses that comprise General Electric will operate “autonomously and at the pace they want to,” said Suri. However, he added, “what’s not changing in this evolution is the fact that each of these business units will continue to tap into IOT capabilities.”
This means that GE Digital will continue to partner with GE’s business units while still working with external customers and channel partners. “This is one of the reasons that building an ecosystem around external partners can be extremely useful. It puts us in a position to create robust, reusable and transferrable products.”