How GE is Shaking Things Up for the Future

GE realized that in the Innovation Economy, where information devices are essential to the success of any business, connectivity between its people wouldn’t be enough. It also saw that its customers were leaving and going to non-traditional competitors. Innovation for the company became more than a desire – it was a straight up necessity. If GE wasn’t able to adapt, it would be forced into the position that we saw Xerox fall into – it would become an equipment provider. With companies like Nest moving into the home appliance market, a market traditionally owned by General Electric, hyperconnecting all of its products makes good sense.

To accomplish this, GE is adding digital sensors to all of its machines in order to tie them to the cloud for increased collaboration and insights tracking. These advances are coupled with crowdsourced development models such as FastWorks and analytics-based technologies. Harvard Business Review reports in “Digital Ubiquity: How Connections, Sensors, and Data Are Revolutionizing Business” how drastically this has changed and improved the company.

“All this is transforming the company’s business model. Now revenue from its jet engines, for example, is tied not to a simple sales transaction but to performance improvements: less downtime and more miles flown over the course of a year. Such digitally enabled, outcomes-based approaches helped GE generate more than $800 million in incremental income in 2013; the company expects that number to reach at least $1 billion in 2014 and again in 2015.”

These changes are a natural extension of the digital ubiquity that interconnected computer devices have brought about. The trick now is to add this amount of digital interconnectivity to workflows and machines that were previously non-digital.

It has been argued that this is not disruptive innovation, but more of an integration. While it certainly is integrating into current systems, it’s what those systems will be able to accomplish that is really disruptive. For instance, HBRuses the erroneous example that Uber is not replacing drivers, but integrating with them. Well, duh. Traditional drivers are not the ones being replaced. They weren’t even in that market to begin with. To find out the real disruption, talk to the New York and UK taxi drivers that are in an uproar about being replaced. Tell that to the bus drivers. There’s the disruption.

What makes this all possible is the ability to connect our digital devices to traditionally non-digital devices, in this case, the automobile. In the end, it at all comes down to data. Hyperconnectivity is all about creating significant conversation and like any worthwhile conversation, high-value information is the result.

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