Home > Articles > Software Development & Management

  • Print
  • + Share This
This chapter is from the book

Digitization at General Electric (GE)

More than any other institution, GE has mastered the art of digitizing while conducting business. GE is a 124-year-old diversified technology, manufacturing, and services company, committed to achieving leadership in each of its key businesses. GE's multi-business success comes from its competitive corporate culture, shared strategic priorities, and ability to find new and more efficient ways to run the business.

To reach and maintain the leadership position, GE's ongoing growth and strategy is focused on four key initiatives: WorkOut, Six Sigma, Services, and Digitization.

WorkOut—Globalization

WorkOut, the oldest initiative at GE (going back to the early 1980s), has become so ingrained in GE's culture that it's less of an "initiative" now and has simply become the way the firm operates. Globalization began as a search for new markets for GE's products and services. This quickly expanded to include finding the most competitive sources of finished products, components, and raw materials. When the globalization initiative began, the company derived more than 80 percent of revenues within the United States; today, more than 40 percent of GE's revenues are generated outside the United States. GE is a truly global company, always strengthening its international presence with new local operations, acquisitions, and joint ventures.

Six Sigma—Improving Manufacturing and Service Quality

During the 1990s, many companies utilized Six Sigma to eliminate process variability and optimize quality. Six Sigma—virtually defect-free processes, products, and services (3.4 defects per million)—takes its name from the Greek letter "sigma," which is used in statistics to indicate standard deviation. GE uses Six Sigma to help distinguish between work that is absolutely necessary versus work that is nice to do but not critical to quality.

Through this quality methodology, GE claims that it has been able to develop and deliver much-improved products and services. Six Sigma builds on the old quality principle that employees often have the best ideas about what tasks can be simplified or eliminated. It is estimated that GE has trained more than 100,000 people in Six Sigma and completed 500,000 projects.6 Six Sigma has helped changed GE's focus from inside to outside, namely to the customer. This change in perspective has undoubtedly helped improve products and services in new ways. (For more information on Six Sigma, see Chapter 10.)

Services—Converting Products into Solutions

In parallel to the Six Sigma efforts, GE is transforming itself from an engineering company into a services firm. In some areas, it is going even further by moving from services to total solutions (that is, providing products, services, and financing). What's more, GE is focusing on creating service platforms to support high-tech products and equipment. For instance, part of GE's medical strategy is to provide services for a digitized hospital that has no paper files, no traditional nurses' stations, and no medical records department. Instead, all the information about a patient is available on computers and kiosks located strategically throughout the hospital. Critical information like diagnostic images and medication are available instantly. That means less time tracking and documenting patient information, and more time for patient care.

By developing leading-edge technology and then driving it back into the installed base of equipment, GE is aiming to increase its customers' productivity. For customers, this enables them to become more competitive at lower investment costs. For GE, this has created a rapidly expanding services business, which is expected to grow substantially for decades to come.

Digitization—Increasing Productivity and Profitability

GE is using Six Sigma to evaluate all the work it does and to shed, streamline, or simplify tasks that aren't critical. The logical next step of Six Sigma is process digitization. The digitization goal: to utilize Internet-based workflows wherever possible to eliminate process friction and streamline the operations of GE. The digitized GE expects to have smaller administrative "back rooms," reduced waste, and faster decision making.

Its financial goal is expanded productivity and profitability. It has invested $10 billion in IT since 1998 to make digitization a vital part of the company. GE is reserving spending for all sides of the business—from the "make" side of internal process digitization, to the "buy" side of sourcing and procurement, to the "sell" side of customer transactions and service.7 Anything to do with customers and growing revenues is receiving digitization priority.

Digitization is a "game changer" for GE because it improves the competitive position. Consider how Internet and Web technology are allowing GE to reallocate back-office processes. At GE, 60 percent of the resources are in the front office—customer facing, manufacturing, selling, and accounting. The other 40 percent of the resources is in the back office—billing, receivables, and call centers. GE plans to take out $10 billion of its SG&A costs by 2005. Simply optimizing the working capital situation—faster recovery of receivables, reduction of liabilities, and reduction of inventories—would produce an ROI in the billions range as a direct result of GE's digitization effort.8

Digitization Themes at GE

At GE, digitization is the conduit through which globalization, Six Sigma, and product services strategies are shaping a leaner conglomerate. The purpose of digitization at GE is to implement corporate strategies that can be distilled into seven themes:

  1. Make yourself Easy To Do Business With—present one face to the customer.

  2. Develop a process enterprise—integrate around the customer.

  3. Create an outside-in service focus, rather than an inside-out product view.

  4. Anticipate customers' needs through services—build value around how the product is used.

  5. Integrate virtually, not vertically, using flexible business process outsourcing.

  6. Make the business agile—do less planning and more "sense and respond" to uncertain economic events.

  7. Include measurement as part of management, not accounting—utilize digital cockpits (a report where managers can view an aggregate of customized company statistics) to monitor, act, and control events.

Once formulated, these enterprise-level themes must be converted into business processes, which are then mapped into applications and systems. All this must be done more quickly and cheaply than ever before. Translating an organization's strategic objectives into processes and applications that in turn drive operational results is the critical role of management.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020