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Digital Transformation: How GE is changing itself and changing the world

Powering

| January 12, 2018, 3:51 PM IST

4IR or Industry 4.0 seems a very hip way to define a revolution that is reshaping the industrial space. Fourth Industrial Revolution is what people call the current wave of digitization that is becoming a part and parcel of our everyday lives. Today, our phones are smarter, our cars are smarter, our homes are smarter, now our offices and factories are becoming too. With pervasive internet connectivity, not only are we able to collaborate in an easy and seamless manner, the mechanical systems, say like the windmills on a remote farm are also able to correspond in an automated way. Digitization is not only driving productivity but also increasing efficiency and profits across the industrial sector, be it a car manufacturer or power company.

So, what is so dramatic about this 4IR?

To begin with the first and the second industrial revolution were all about the physical aspect, namely huge machines powered by steam and electricity manufacturing goods. The third revolution saw the emergence of the digital processes, the advent of computing in the industrial systems. The defining trait of the Fourth Industrial Revolution is the emergence of the Physical-Digital. Basically, in the current phase, we are combining the learnings from all the earlier revolutions to construct a new approach. The knowledge of the physical industrial systems (machines) and combining it with the analytical power of computing is what sets apart 4IR from all the rest.

This is the very reason why GE is leading this wave of change. Founded in 1892 with by merging two companies Edison General Electric Company and Thomson-Houston Electric Company, GE has been a big name in the industrial space, especially in the field of aviation, power, healthcare, transport, oil & gas, and so on. Over the very many years, GE has the gained intricate knowledge of machines, as it has helped build them. Its industrial authority is undeniable.

And now, GE is actively working to reinvent itself; it is working towards transitioning into a digital company.

Merging the Physical/Digital

Recently, in San Francisco, GE organized its annual tech congregation titled Minds Machines. The event had become a meeting ground for tech minds, especially from the industrial sector. Thus, technologists, digital officers and so on descend at the Moscone Center to know what’s latest in technological breakthroughs. Over the past couple of years, Industrial Internet has been an abiding flavour of the summit. When high-speed Internet being ubiquitous, not surprisingly industrial systems to are making a big splash on the cyber-highway. Companies are leveraging the connectivity to drive up productivity and automate systems.

For instance, this year, Gil C. Quiniones, President & CEO of New York Power Authority (NYPA), the largest state-owned electrical utility in the US spoke about how the "electric grid is becoming decentralized, multi-flow, intelligent energy network" rather than just a network to transmit energy. With GE's technology, NYPA has transitioned into the "first end-to-end digital utility in the US".

Just like NYPA is transitioning from a power-utility company to a digital one, so is GE. The company has been making continuous investments in adding digital capabilities. Like, last year GE put about $4  billion into developing analytics software and machine-learning capabilities and another $2 billion into building a leadership position in additive-manufacturing equipment and services. The transition philosophy for GE is based on 3 pillars, namely;

  • GE for GE: Testing systems and projects internally by adoption digitization.
  • GE for customers: GE businesses create applications around their customers’ systems and processes with an aim to generate outcomes.
  • GE for the world: Evangelizing industrial internet and creating a vibrant eco-system around Predix, a cloud-based platform exclusive for Industrial Internet.

This is how GE is not only innovating on solutions but also adopting them itself. At the Minds Machines expo, John Flannery, CEO, GE, summed up the transition very succinctly as "a new kind of Industrial Revolution is happening at an unprecedented scale and at unprecedented speed. It is not just enough to build machines, but we need to build integrated eco-systems".

The power of Predix, with the twin

While it debuted as an interesting concept, Industrial Internet has become prevalent and fairly ubiquitous across industries in a quick time frame. Primarily, Industrial Internet is a network of interconnected machines and devices, that can observe, collect, interchange, examine, analyze and convey data points and information seamlessly using communication technologies. With the use of analytics and dynamic AI, this information can be used to drive powerful business outcomes, like predicting failures, suggesting alternatives, etc. For instance, let's talk about the aviation sector. A single jet engine contains some 12000 individual components, which generates some 10 GB of data per second. By using this data and its years of operational excellence GE was able to build FlightPulse, a mobile application used by pilots and powered by Predix. When Australian airline Qantas rolled out this solution at their end, with some 1700 pilots using FlightPulse, they were surprised by the productivity gains. Qantas was able to reduce fuel consumption by 1%, which translates into an annual saving of 30 million kgs of fuel!

Closer to home, a few years back the national power regulator, Central Electricity Regulatory Commission (CERC) introduced a framework to strengthen forecasting in the wind power sector, by introducing a forecasting, scheduling and deviation settlement regulations for solar and wind power generation. The primary objective of the new regulations is to make generators more accountable through enhanced forecasting requirements and penalizing them for deviation. Using its industrial know-how, GE worked with power producers in India to deal with this stringent regulation. In 2014, the company partnered with Panama Wind Energy to implement a digital farm solution, replete with a digital twin of the wind turbines. The idea was to take into account the current data from the turbine and data about the weather patterns in the wind farm to make accurate predictions. The solution demonstrated 94-97% accuracy as compared to the industry leader’s 80-86%, helping Panama make accurate forecasts and thus avoid penalties.

There are many such stories and the success of GE's digital offering can be gauged by the rapid growth of the Predix eco-system. Millions of digital twins (digital copies of real objects like windmill or locomotive) are building up a resounding eco-system. There are over 700,000 twins functional today, expected to number one million by the end of 2017. The objective is clear, by 2020 GE wants to be a top 10 software company with more than $15 billion revenues in software and solutions.

And GE does not want to do all this alone. At the recently convened Minds Machines event, in addition to all the customers, Flannery invited on-stage Satya Nadela, CEO, Microsoft to talk about their partnership on the cloud-front, the inter-weaving of Predix and Azure. Similarly, GE is working with Hewlett-Packard (HP) on the enterprise space, working with Apple to launch industrial solutions on its mobile platform. With scores of offerings like Predix Studio, ServiceMax (which is an Asset Performance Management - APM offering), GE is working with companies across the board for increasing productivity and creating new business models.

The Next Big Wave

Recently, GE and NASSCOM had released a report that stated that the Industrial Internet (also referred as IIoT) could be a $225 Billion market by 2020. With rapid automation and growth, there would be tremendous changes in the offing. Already we are seeing the transition in the way we live or work, systems are inter-linked, intelligence is on-demand. In fact, by 2020:10,000 gas turbines; 68,000 jet engines, more than 100 million light bulbs and 152 million cars will be connected to the Internet.

All this will have a revolutionary impact on our economy, Industrial Internet could add as much as $14.2 trillion to 20 of the world’s major economies over the next 15 years, according to the latest analysis from Accenture. And it is not only that the big companies will benefit from the advent of digitization. New players will emerge, with new business models. Take for instance how a cardiologist based in India collaborated with GE to create a cloud-based ECG device. This device pairs with a conventional ECG and helps create a platform for ready diagnosis. Tricog in the past two-and-a-half year has diagnosed over three lakhs cases of coronary diseases. This has not only quickened diagnosis and made it affordable but also saved thousands of lives. That is the power of the Industrial Internet.

In the end, given the prowess of GE in the industrial space, and its new found strength in the digital one, there’s no real doubt as to who will be leading the charge in this revolution. The best part is that GE has equally thrived in the earlier two revolutions as well.

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