GE Digital Transformation: How Did It Do?

GE digital transformation has been in the works for years now. But, how did its efforts go? And can we learn anything from it?

There is only one thing to say about GE’s digital transformation. It failed, sadly.

They failed to reach its grand vision for digital transformation. That is why they are hitting a rough patch after missing earnings.

Why so? Read on to know more. We will start by seeing GE behind the curtain.

Behind GE Digital Transformation

 GE’s digital transformation started in 2013. With GE planning to have Predix as its software platform for the industrial internet.

Then, in 2014, they said they make $1 billion income thanks to Predix. And they announced in 2015 that they are creating a business unit, GE Digital.

After, in 2016, GE Digital reported more than 1,500 employees in their San Ramon office in California.

Everything was looking good for GE in the eyes of the public. But this wasn’t the case internally.

For one, GE has many kinds of business units. Like GE Software, GE Aviation, GE Transportation, and GE Power. And these units each have their set of IT needs.

What GE did was give each unit resources from GE Software. But, this is less about digital transformation. It’s more on digital enablement.

Then, most of GE Software’s earnings did not come from external sources. But from billing other GE units.

Second, GE made GE Digital as a separate business unit. To deal with external business and less of an internal development shop. And it’s now in charge of Predix.

But, Predix focused on making short-term profits. Not long-term ones with their customers.

And it aims of being a development platform for third-party developers. But it did not succeed. As most of the software built around it is from GE’s own unit or partners.

Though there are improvements with GE’s efforts, it was not game-changing. And it did not result in multibillion-dollar innovations. So, what went wrong?

GE Digital Transformation, What Went Wrong?

Digital transformation is not equal to only adding technology to a company. It means rethinking a company’s business model and changing its core.

But most companies fail to do that. They only focus on digitizing every area of their company. And worse, digital transformation fails if done from within the organization.

That is why GE failed. GE Digital needed to be separate from GE itself. It only took after GE Software’s steps. Getting the same roles and responsibilities was a red flag.

Also, a successful digital transformation does not need thousand of employees. It only needs to start small with a few innovative people starting from one unit to another. Not uprooting everything at once.

And it should focus on long-term strategies. But GE focused on getting short-term income.

What’s Next for GE?

GE is starting back on its digital transformation efforts with a new CEO. And if they learned anything from what happened, they can succeed.

But, they need to step back and be removed from their current structure. Think of more long-term investments, and make strategic decisions.

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