July marked one year at the helm for GE Digital CEO Pat Byrne. And what a year it’s been.
During that time, Byrne has overseen the process of successfully bringing together (and growing) four GE business units, resulting in more than a billion dollars of revenue. Of course, he has also had to strategically navigate the company through the pandemic. “Covid-19 created a strange world that will be with us for a while. As it continues, we need to not only operate our business, but also enable our customers to operate,” says Byrne.
From the beginning, Byrne embraced his leadership role by spending a good bit of his first six months engaging with customers gaining valuable insight into what makes them tick and where they are struggling.
His key learnings? “Digital transformation is a key priority for customers, at the top of a short list of priorities whether the driver is supply chain dynamics, workforce, safety regulations or market structure,” he says. “Digital transformation can significantly change how an industrial company operates. However, customers are really challenged with digital transformation. It is not easy, and oftentimes data readiness is not where it needs to be. Knowing data is one of the biggest challenges, our focus is on really transforming how businesses operate, and how they take on their toughest challenges.”
What exactly is digital transformation?
Art? Science? A mix of both? Digital transformation definitely has a sense of mystery surrounding it which often results in glazed over eyes. And, since digital transformation relies on a mix of technologies, philosophies and strategies, it can be a difficult concept to define. The key to success starts with a solid definition. As such, Byrne defines digital transformation as delivering significant improvement in important business outcomes through the application of digital technologies to simplify, streamline and optimize operations. “It's about outcomes and business process transformation,” he says. “Digital transformation is about helping companies enable people to operate with more efficiency, more effectiveness, less waste and more cross functionally.”
There has been a lot of talk about digital transformation over the years, but it is still very early in the process, explains Byrne. “The opportunity is still very significant. It's ahead of us, and it's a priority for our customers,” he says. “Fortunately, the technologies are mature to the point where real solutions can be delivered with good business outcomes. And these aren't science projects, it’s real business process transformation.”
Operating within the Covid-19 world means industrial organizations must find ways to be simplified and streamlined. Simply put, there just isn't any room for adding complexity. So how are the most progressive companies approaching digital transforming?
Seeking hard ROI. The best companies are not looking for digital transformation pilots. Instead, they recognize the need for hard ROIs, often in less than a year. “While there could well be a five-year vision, companies need to be able to break that down into getting a strong business case,” he says. “Achieving that requires a critical combination of using lean and digital together. Lean allows you to get visibility into where there's waste in the business process. It's a systematic way of creating insight into where waste exists.”
And during Covid-19 times, eliminating waste is going to be very important. “The demand is going to be uncertain. Supply chains are going to be disrupted. Customer behaviors will be uncertain,” he says. “Consider, for instance, if you're in the food and beverage world, higher margin convenience store volumes are way down because fewer people are driving, but lower margin grocery store volumes are up. How do businesses respond to that? You need the ability to really transform core business processes, using both lean and digital.”
Enabling end-to-end visibility. The best operators are getting ahold of their most valuable data and figuring out how to use that data. It's useful, not only in operating the factory, but in seeing how different factories operate comparatively, or how factories are operating relative to the supply chain. Data rich visibility can help a company manage through the uncertainties.
Picking partners wisely. Look for suppliers who understand your real economics and industry dynamics. “The primary focus of digital transformation is not about technology deployment. It is primarily a business process change management challenge – and who you partner with matters,” he says. “We know we are very well positioned to help our customers win. We can engage with them on a global basis with talent and technology. We are not only serving 20,000 customers worldwide; we also have hundreds of our own factories. Content, experience and expertise matter.”
Drinking its own Kool-aid
It is easy for vendors to provide marketing speak and tout benefits. However, digital technology is not simply a product or offering GE Digital sells to customers. Instead, its digital solutions are a crucial component to how GE itself operates, explains Byrne.
“All GE businesses have ongoing digital transformation initiatives. For instance, within our renewables business, we make tens of thousands of wind turbines, operating in the far flung reaches the earth – very remote places. And, understandably, the continued maintenance of that wind turbine is a crucial economic and safety/regulatory obligation,” he says. “The service operations in our renewables organization support these field deployments by using our technologies to develop a digital plan of the day. This provides our technicians with visibility into how assets are operating, and what can be done if one of these wind turbines is starting to operate differently than expected. Without this type of visibility, even a small defect can quickly become a safety issue, but digital technologies allow us to catch issues well ahead of time – often limiting the number of times technicians drive hundreds of miles to climb up a wind turbine.”
Another example, and perhaps one of the most covered uses of industrial data, centers on how GE manages jet engines. With thousands of planes using GE jet engines taking off every day, GE has access to mountains of flight data, enabling it to understand the reliability of assets, as well as what it means to maintain, support and service those assets. Of course, aviation is going through a lot of changes right now with less airplanes flying and a reduced workforce.
“It’s expensive to take a jet engine off a frame. What we've been able to do is take a digital inspection approach out into the field, and improve how a lower sized workforce operates effectively,” he says. “This is a place where digital technologies really enable a more efficient and effective inspection process with a smaller workforce. Everybody still expects the plane to be super safe, and all these regulations are changing, even though the number of airplane flights is lower. Digital technologies help ensure that the safety record remains strong.”
