GE Digital CEO Shares Insights On Digital Transformation In Industrial Markets

Every company must be digital-driven to thrive

For publicly traded companies, it’s difficult to build a digital transformation strategy that spans years when investors are looking for quarterly results. To understand how large industrial companies are addressing these challenges, I spoke with Bill Ruh, the CEO of GE Digital. When asked how GE was approaching digital transformation, he replied with a simple, yet powerful statement. “If you can’t master the idea of digital inside your analog business you open the door to commoditization.” Therein lie the challenge and the opportunity for an established company in an increasingly digital era.

GE is widely credited with creating the Industrial Internet of Things (IIoT) term that describes how the industrial sectors could deliver new value by embracing digital components in a physical industry. The company has also been focused on making this vision a reality by building products in this sector for several years. For example, GE saw an opportunity to reimagine every aspect of the electrical value chain.

During GE’s recent Minds and Machines conference, the company described how its customers, such as the New York Power Authority, are changing their businesses by infusing digital technology into a physical product market such as utilities. The New York Power Authority, with the help of GE technology, now calls itself the world’s first digital utility. It has worked with GE to create a real-time digital replica of its assets and automate many back-office processes. New York Power Authority views itself as the orchestrator of a network of power generation. In other industries, such as aviation, Ruh said GE’s customer could rethink who repairs the engine, how to repair the engine and who will give advice on how to fly them. So not only are companies updating technology, GE’s customers are changing their businesses.

Your client’s business outcomes drive the transformation agenda

The previous examples led to an interesting discussion on how companies need to perceive the process of digital transformation. For GE, Ruh shared that creating an Industrial Internet product isn’t as simple as a vendor redesigning its products with new digital bells and whistles. Delivering new business outcomes for your customer is at the center of how any company should view its digital transformation efforts. For example, at GE designing technology that enables a zero-downtime environment can save a liquid natural gas plant owner up to $100M per day in lost revenue. This type of return on investment changes the value of the vendor within the network and the customer’s overall market opportunity.

For the business to business (B2B) markets, such as the industrial industries, it’s important to understand how your products will ultimately help your customer meet its end consumer’s need. A great example of this occurs in the solar market where you need to supply technology that allows the supplier to keep its costs low while providing features that deliver value to the end customer, such as information on energy consumption.

Another key take away from the conversation is digital transformation requires a catalyst because change for change sake is too hard. GE Digital has multiple business units, but its business units don’t necessarily all operate at the same pace of change. There are industries, such as energy, where the customers have an acute pain point such as falling product prices. In the areas where there is an industry catalyst, change happens faster. Find your catalyst and build solutions for that problem.

Maximizing and growing talent: A key component of any transformation strategy

To close our discussion, Ruh shared that digital transformation at GE isn’t simply a matter of just updating the technology within a company. The key to any company’s success, including GE’s, is creating the right culture and talent. A company must build a culture that brings its people along, making certain everyone makes the digital transition. It requires rethinking jobs, providing training and potentially advancing the company culture in new directions.

As Ruh said, every large company needs to be digital because established firms will never outrun startups. While a large business can’t easily compete on speed, it can compete on scale, assuming it can leverage the benefits of its size — such as brand and customer base. A company needs to bolster internal innovation by growing digital talent within the company, hiring where available and acquiring where necessary. Finally, digital transformation never ends, because leading organizations always strive to make their products easier and more efficient.

Digital Transformation: A View To 2020

Digital transformation (DX) initiatives are on the top of ever CIOs agenda. CEOs from four technology vendors shared their perspective on challenges and best practices in digital transformation during a panel session moderated by Bob Egan of The Sepharim Group at the most recent ET Exchange Summit. The panelists represented companies that provide solutions for IoT, mobility, application enablement and security. Several best practices shared during the session include:

  • Designing security from the outset to fuel DX growth. Security is a significant inhibitor of many transformation efforts. While securing the enterprise isn’t a new trend, it’s clear that security concerns have grown as companies run outdated software and connect new hardware. For example, 82 percent of the companies Lopez Research interviewed strongly agreed with the statement “security concerns have stalled our IoT deployments.” Eric Simone from Clearblade and Daniel Potts from Cog Systems highlighted the opportunity to minimize future security vulnerabilities by securing IoT hardware, middleware and software at the initial design of the solution. Sapho also noted that companies should evaluate their vendor’s security policies to prevent security breaches that could come from compromised systems at the vendor. Of course, it’s clear that companies should also be reviewing security at every layer of the technology stack from the devices through the application.
  • Modernizing and mobilizing applications and workflows for efficiency and differentiated experiences. PowWow Mobile and Sapho described how digital transformation requires companies to update existing applications and processes. Kia Benhia from PowWow Mobile said application strategies fit into one of four Rs that include retiring, refactoring, rewriting and replacing applications. First, a company should retire apps with limited utilization. Refactoring allows companies to modernize the front end without recoding the entire app. In other cases, delivering the best application experience requires rewriting the application to support new workflows and experiences. Companies should also consider replacing apps with more modern off the shelf solutions such as Software as a Service apps for CRM and finance. The challenge for every organization is to categorize, prioritize and design a plan that spans dozens to hundreds of apps.
  • Defining your DX journey. Fouad ElNagger of Sapho noted that DX means different things to different organizations but classified two broad approaches to transformation. The first class of transformation focuses on how to use technology to drive productivity gains. The second area focuses on how to build a modern enterprise for modern employees. Examples of the second type of transformation experience could include scheduling conference rooms with iPads, digital signage, improved collaboration and new customer-facing experiences. Both strategies allow a company to improve its bottom line. In fact, significant numbers are at stake even when focusing on productivity gains. For example, EINagger noted that a half a percentage increase in productivity could be worth as much as $800 million to Conoco Philips’ business.
  • Building bridges to the past. Successful DX strategies recognize that you can’t rip and replace all of the underlying systems that run the business. Modernizing applications and services requires a company to build new systems that can connect with legacy protocols and systems of record. Companies need tools such as APIs, Mobile Backend as a Service and specialized middleware platforms. DX has to incorporate standardization and integration of legacy systems. Cog Systems also noted that it’s important to lean toward automation to improve the user experience.
  • Rethinking the boundaries. Everyone agreed that successful companies must embrace change and define a broader vision of what the company than what it is today. The panel shared examples of how Ford Motor Company views itself as in the transportation business versus solely and automotive manufactured. Meanwhile, Dominos Pizza views itself as an IT company instead of simply a food purveyor.
  • Garnering executive support. Successful transformation requires change agents and evangelists at all levels of the organization. However, DX effort won’t be gain traction until the executive team commits to new projects, increasing the firm’s risk tolerance and ensuring there’s appropriate funding for transformation projects.

One thing is certain. To thrive in such a dynamic landscape, a company must have a strong digital discipline regardless of the industry they’re in.


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Intel Boosts Vision-based Contextual Computing With New Products

Intel's Movidus Myriad X Chip Source: Intel

Intel’s Movidus Myriad X Chip Source: Intel

Early examples of machine learning and artificial intelligence surround us today, yet we don’t think of it as such. It’s how our voice messages get transcribed. It’s the algorithms that surface the right information for internet searches. It’s the technology that fuels how Amazon and Netflix make recommendations for us. Machine learning and AI are the foundations for voice and digital assistants, such as Amazon’s Alexa, Microsoft’s Cortana, Apple’s Siri and Google’s assistant.

Vison-related machine learning is also prevalent in our day to day existence through features such facial recognition for tagging on Facebook and discovering funny cat videos on YouTube. While voice assistants garnered all the media attention recently, vision-related machine learning solutions have rapidly evolved. Intel’s AI group’s latest announcements highlight an example of this fast-moving progress.

Intel’s Movidius team, part of the new Artificial Intelligence Products Group, announced the third generation of its Vision Processing Unit (VPU) platform called the Myriad X family in late August. The Myriad X platform is a computer vision system on a chip (SOC). The architecture includes a neural network compute engine, which provides the onboard power necessary to support machine learning deep learning and artificial intelligence applications. The architecture offers imaging and vision accelerators to be used for items such as stereo depth, feature extraction and warp/dewarp.

The result of changes in the platform is an overall 10x improvement in the available floating-point performance on DNNs compared to the previous generation. These means faster, more granular and precise image recognition for applications where it matters such as autonomous driving.

This announcement follows quickly on the heels of its July launch of the Movidius Neural Compute Stick, a USB-based development kit for ultra-low power embedded deep neural networks. It a deep learning accelerator and development kit that enables deep learning inference and artificial intelligence (AI) applications at the edge. It can be used to add vision processing capability to low-end computing environments, such as Raspberry Pi. It’s nearly one year since Intel’s acquisition of Movidius, and it’s good to see the company launch two new products within this timeframe.

What does this mean for a company’s digital transformation efforts?

Faster, more accurate vision processing can improve multiple business cases. Remi El-Ouazzane, Intel’s Vice President of the New Technologies Group & General Manager of Movidius, said he believes vision can improve every industry but outlined four clear near-term use cases where VPUs can be deployed today that include drones, augmented reality, security and surveillance as well as robotics.

Each of these applications employs multiple Convolutional Neural Network (CNNs) in parallel. CNNs mimic the biologic structure of human sight and use relatively little pre-processing compared to other image classification algorithms. The CNN network learns the filters that in traditional algorithms that previously had to be designed by data scientists.

The marketplace needed a new type of vision processing because real contextual services require companies to aggregate, analyze and act on new sensor information at the edge. For this to work, you need a low powered hardware, cameras, enhanced algorithms and cloud services. Technologies like Myriad X and Intel’s Nervana allow business to embrace vision as a contextual element.

What does it mean for Intel?

PCs and mainframes rule computing but as the IoT market unfolds the number and type of connected computing devices have proliferated. It’s not enough to just provide a connected device in this new world of Internet of Things (IoT) and AI. Devices need to be smart as well. Part of being intelligent requires the ability to process a certain amount of data at the edge where it’s created and integrate that data into business workflows. It makes sense that Intel would focus on this technology because VPUs, deep learning and AI are the foundations for the next generation of connected computing.

However, it’s still early days in this market, and Intel’s not alone. AMD and Nvidia have their take on the machine learning, deep learning and contextual computing landscape. This competition will keep innovation flowing in the space.

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Dell’s Premium Support Plus Brings Automated Support To Consumer PCs

New PC hardware, like the new Inspiron 15 7000 Gaming Laptop that Dell announced at IFA, generate buzz but what keeps consumers happy and returning to a PC vendor? Ease of use, maintenance and support. One offering that typically separates a business PC from a commercial PC is the ability to purchase a robust support contract. However, the difference between business and consumer PC use has blurred. Competition has intensified, and PCs are becoming increasingly difficult to differentiate. Dell has decided to add up the ante in the consumer market with a new top-tier of support called Dell Premium Support Plus.

It offers 24×7 phone support, onsite service after remote diagnosis and hardware and software support. At the heart of the offering is Dell’s SupportAssist software technology with key service aspects that include:

  • Automatic PC optimization. The software scans the hardware, cleans the files, gets drivers and downloads, and optimizes both network and device performance.
    Predictive and proactive alerts. The system predicts and informs the user of potential failures to minimize downtime. It also proactively alerts the user of issues and can automatically alert Dell support as well, saving the consumer time.
  • Automated virus and malware removal. With a wave of new security threats, consumers need an easy way to protect their PC. Dell’s support offering automatically scans the PC for viruses, quarantines the threat, alerts the user and removes it. It keeps a log in the SupportAssist history tab so the user can review the actions taken.
  • Accident recovery. This aspect of the service covers the fairly common occurrence of PC damaged from drops and spills.
  • Various levels and types of support. The service offers flexibility via email support or one-on-one personalized support with an agent or a combination of both.

According to Dell’s research, the service will be a significant time saver with up to 88 percent less time spent on issue resolution and up to 77 percent fewer steps in the support process when compared to other premium service offers.

There are several nice features of the service. First, it helps you understand if your current configuration is optimized for the right performance. When a PC is new, this feature doesn’t seem as important. After several months of use, it’s easy for a consumer to have a bloated suboptimal configuration. Transferring the contents of an old PC to a newer model also brings with it duplicate files, out of data applications and other areas that can be optimized.

Artificial intelligence (AI) is a hot buzz word in the media but proactive and predictive alerts are real world applications of AI. It can predict items such as hard drive failure or send proactive alerts to let you know that your battery failed. A proactive alert can automatically contact Dell to log a support request and ask you to confirm your details for support.

Most consumer PCs are vulnerable to malicious software because security is a pain to deploy, update and manage. Dell’s new service aims to minimize security woes by ensuring the PC has the right security with minimal user intervention. To do this, Dell has automated virus scanning and removal. With ransomware and other threats on the rise, any support for eliminating security threats is welcome. The consumer service mirrors what Dell offers in the commercial market in many ways. The automation, predictive services, and security aspects have been field tested with enterprise deployments. It’s good to see the concepts of enterprise grade support filtering down to the consumer marketplace.

Clearly, PC support and maintenance has been a long standing consumer pain point in the industry. Apple successfully used customer support as a competitive differentiator. The Apple Genius Bar services are the hallmark of in-person care, but it doesn’t provide the same type of software-based predictive support and virus removal. Clearly, consumers need a simpler, proactive solution to deal with the mounting security threats and hardware management. It will be interesting to see what Lenovo, HP Inc. and others will offer next on the customer care front to compete with Dell’s offering.

3 Tips For Building A Software-Driven Enterprise

Delivering meaning digital transformations excites and torments IT leaders due to its constantly changing nature. Lopez Research is always on the lookout for insights on how to navigate this new IT paradigm, especially when the ideas come from a seasoned veteran of transformation. At the recent CA Technologies. “Built to Change” summit, I had the opportunity to meet with Otto Berkes, the company’s Executive and CTO. Mr. Berkes previously served as the chief technology officer at HBO, spent 18 years at Microsoft and was one of the four original founders of Xbox.

Otto Berkes, CTO of CA Technologies

Otto Berkes, CTO of CA Technologies

Berkes is also the author of Wiley & Son’s book Digitally Remastered – Building Software into Your Business DNA. (Coincidentally the same publisher as my Right-time Experiences book that describes how to approach building better customer and employee experiences in an increasingly connected world.) The conference and my interview with Mr. Berkes focused on the IT imperative to design a modern software factory. The book, whose proceeds support Code for America, describes the challenge and opportunity of redesigning software for the new world of digital engagement.

Digitally Remastered written by Otto Berkes

As you know, digital transformation isn’t new. However, the pace and extensive IT disruption caused by digitizing the business is more pronounced in this timeframe. Berkes make a prescient point when he states that “technology has moved from a supporting role in the firm to a driving force of growth and engagement.” Perhaps you could say that was always true, but I don’t believe it. Anyone looking at a software package designed in the late 1980s knows that these systems, while digital, aren’t the pinnacle of tools for driving engagement and growth.

When Right-time Experiences was released in 2014, I wrote about how social, mobile and cloud computing would change both employee and customer engagement. In 2018, these concepts are foregone conclusions. Yet many businesses haven’t built the systems to must support in real-time two-way engagement and business process completion for both consumers and employees. Why? I posit that difficulty moving to a modern software-driven organization is the cause of these woes.

Image of Right-time Experiences, written by Maribel Lopez of Lopez Research LLC and published by John Wiley and Sons

Right-time Experiences, written by Maribel Lopez of Lopez Research LLC and published by John Wiley and Sons

Agile development, organizational changes and APIs are key to a modern software-driven business. Agile, much like digital transformation, has been around for decades. However, most companies aren’t organized for agile development which requires small teams, which work in spurts. The team and process incorporate the whole application lifecycle from design to testing to maintenance in one group. It’s a complete shift from the waterfall, command and control model that IT organizations have built their existing practice on. Companies literally must change how the business organizes and operates. As we all know, change is hard.

But the need for speed is real. Software-driven enterprises, whether startups or established companies, can respond to changing market dynamics faster. If it takes multiple quarters to change a system, your company will fall behind the competition. Everyone knows this, yet why don’t we act? For some time, there was a belief that the technologies weren’t ready but that isn’t the case today. The Achilles’ heel of digital transformation isn’t technology adoption, it’s the company’s inertia to change.

Three Roadblocks IT leaders must overcome to build a software-driven enterprise

While I could delineate the various technology solutions and strategies IT should be evaluating (e.g., APIs, microservices and security), I think it’s more important to nail three basic concepts before getting mired in technology selection.

First, don’t toy with agile. The road is paved with good development model intentions but failed execution. Lopez Research has spoken with many companies that have used agile for a project or two, but never committed to moving the entire organization to a new development methodology. Without a strong commitment, your company won’t see the benefits because of its running different tools, processes and development schedules. Agile development can start small, but you have to commit to the organizational change.

Second, budgets need to be realigned for a continuous upgrades mindset. One of the benefits of waterfall development is that you lock the scope and theoretically the cost. While I don’t believe the cost estimates every match the actual expenses, companies need to think differently about budgets in an agile world. You’re actually budgeting for quarterly to bi-weekly upgrades. The job is never done. The software becomes a living breathing part of your organization that must constantly evolve as the market changes. There is no “set it and forget it” mindset in a software-driven organization. Refinement, reinvention and innovation are the goals of a software-driven organization.

Third, effective use of data is crucial to any organization’s success. One of the interesting differences in today’s software driven organization is the need to both consume from and share data with third parties. Businesses must break down internal data silos between groups but also look to developing strategies for sharing data with partners. This may require you to rethink data protection, expiration of content, data storage and analytics strategies. For example, It’s unreasonable to expect you’ll create one repository for all of your data so how do you create a consistent and accurate view of a customer across various data sources? How do you anonymize customer data for sharing with a third party? What data can be shared and for how long? What third-party data would improve your products (e.g. reviews, shipping information, weather)? These are the types of questions companies need to answer before selecting various technology solutions.

Digital transformation is a journey, but if you build a solid strategy for the items mentioned above, you’ll build the foundation for the software-driven enterprise.

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