As industrial manufacturers move toward digitization and data-driven solutions, KPMG’s Larry Bradley sat down with Khozema Shipchandler, VP and Chief Financial Officer at GE Digital to find out how one of the world’s most successful manufacturers is preparing for the new era of ‘digital industrial’.
Larry: What does ‘digital industrial’ mean to GE and how is it changing the manufacturing sector?
Khozema: I think it’s a recognition that our products increasingly spit out terabytes and petabytes of extremely valuable data which, when harnessed, allow us to provide our customers with increasingly valuable services. So instead of running maintenance on an aircraft engine based on a regular schedule and engineering statistics, we can monitor – in real-time – the operation of that engine and spot the exact point in time when that engine needs servicing. Digital industrial is really about using the information from our products to create real value for our customers.
Larry: Innovation is key to driving new service and business models. How is GE capturing new ideas to drive the digital industrial effort?
Khozema: We are in the process of building out a very robust partner ecosystem that brings together consultants, technology firms, suppliers, regional partners and others to bring new developers to our platform and help us extend our commercial capability across both our existing verticals and those we do not participate in today. We have also established a strong presence in places like Silicon Valley and Boston where we can tap into some of the world’s brightest minds and talent.
Larry: GE’s leadership has always encouraged change. Has this influenced the transformation to a digital industrial company?
Khozema: We are fortunate enough to have a Chairman-led effort. Our board and our executives understand the importance of building market leadership in industrial internet. We have a CEO of GE Digital who is empowered and encouraged to work horizontally across the business units to share ideas and best practices and to provide guidance, leadership and direction within each of the GE verticals. It really takes commitment from the top and a deep desire to make the change.
Larry: Will digital industrial be the competitive platform of the future?
Khozema: I think digitization offers a profound opportunity for manufacturers to drive massive improvements in their internal operations and bring untapped sources of value to their customers. Those manufacturers that are not able to make the leap will find themselves largely irrelevant in the next 5 to 7 years because people will increasingly look for the value beyond the product. The company that monetizes that first and brings the most value to customers will be the winner.