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Digitization of an Industrial Giant: GE Takes on Industrial Analytics

Published 24 Jul 2017
Reference 6313
Topic Strategy
Region Global
Summary

The case describes General Electric’s transformation from an industrial manufacturer to an industrial analytics giant. It opens in 2009 when CEO Jeff Immelt decides that GE, a hardware maker, needs to be more capable in software. The narrative traces his early efforts to consolidate and coordinate software capabilities in a central unit (GE Software Center) headed by Bill Ruh in Silicon Valley. It documents the realization of the potential for big data and analytics for customers to which GE has sold industrial equipment for decades. Opportunities related to ‘predictive maintenance’ seem attractive given the significant economic costs of unplanned maintenance and repair for GE customers. Equipment optimization through analytics also has potential to increase their margins, especially for those that face increased competition and lack pricing power. As GE roars down the runway to becoming the leading player in the digitization of industry,the question is can it reach the critical speed to break free of the tarmac and sustain flight?

Teaching objectives

The case examines the general market for and growth of industrial analytics and what in Europe is called Industrie 4.0 (or the fourth industrial revolution) - as well as what it requires in terms of both financial and human capital investment. It invites participants to assess some of the early moves of arguably one of the biggest first-movers in the game, and through this analysis gain an enhanced idea of what actions directly impact digitization’s success. Since GE’s journey has only just begun, they are asked to contemplate how to get started in industrial analytics, and then how to sustain success.

Keywords
  • Industrial internet
  • Internet of things
  • Smart factory
  • Industry 4.0
  • Digital transformation
  • Analytics
  • Industrial manufacturing
  • Q41617