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This summer, GE's new CEO, Frannery, continued his radical reform of the troubled industrial giant, with a spin-off of its digital business, giving other digital industrial companies an important lesson to watch from afar.
On the positive side, the resolute abandonment of Predix, a world-class industrial Internet platform developed for factories and industry equipment, demonstrates that GM has the ability to achieve the innovations it expects in even the most complex business units. Another far-reaching significance of this move is that GE's current unsatisfactory profit levels and a steady stream of digital business investments are also likely to improve.
In my opinion, this Wharton Business School graduate who joined GE for more than 30 years made the right decision that no one else dared to do but was also critical.
Courage and boldness are often more important than strategic thinking itself in the face of criticism. Looking back at the history of global industrial development, every technological change is bound to be accompanied by market destruction, and new competitors for Agile are replacing the traditional large factories in an endless stream of cases.
In 140 years of development, ge has also experienced one kind or another of subversive waves. with the development of industrial enterprises, ge is facing many pressures, such as falling productivity, rising supply-side costs, aging labor force, the impact of technological revolution and trade protectionism.
Additionally, the choice of corporate strategy is by no means an either-or dualism - whether it's Welch, Immelt, or Frannari, the big decisions they made in their executive positions are close to GE, the giant, and the global economic impersonality of the time. Environment and technology trends are related.
Selling the digital business supported by Immelt is a danger, but the difficult decision that has to be made is more valuable than the argument of " right or wrong".
Still that sentence, flannery made a crucial and correct decision that others did not dare to make.
In the last decade, digital industrialization released productivity
The digital business being sold by Flannery is not a "legacy of history" - GE Digital, which was once an enormous success, is now being stripped away by the group and prioritized by GE as the best option in a cyclical environment.
In April 2013, at the Hanover Industrial Expo, the German government officially launched the long-awaited industrial 4.0 strategy. But the Germans, eager to take the lead in a new industrial revolution, are not the first to put forward the concept of digital industry - a year earlier, Americans from GE have begun their earliest practice of the "industrial Internet".
Back in 2011, GE set up its own software hub in San Ramon, Calif., to digitize GE. That world-famous industrial Internet platform, Predix, is a prominent example of GE's march into the digital industry, the beginning of GE's digital revolution.
Digitization is increasingly being applied to industry, changing GE's mission and internalizing its unique genes.
The significance of ge's digital business is as clear as it is now being sold. Don't forget that productivity is the main factor in the change of industrial organization. This is also the core reason why Immelt led ge to resolutely transform.
In the last decade, software and data have brought great value to social progress. global enterprises are entering a new era of information explosion and reinventing productivity creation. the rapid spread of digital innovation will reopen the growth of industrial productivity and the scale of the market. Ge, which has been undergoing rapid transformation, has become the only company that has existed since the Dow Jones industrial average was established in 1898.
In the first 100 years, GE focused on industrial equipment. In the past 20 years, GE has created a large number of commercially valuable services. GE is beginning to realize that after selling aircraft engines, gas turbines or medical equipment, there is still a huge commercial space to explore in the after-sales service field. Along the way, GE's locomotive heads, wind turbines and other industrial equipment will become more digital.
Whether it is a pity that data cannot be collected and processed in industrial equipment production or the inefficiency of industrial equipment management itself, it is a scene explanation of ge's digital transformation strategy logic. The case cited many times by Immelt is Greenville, south Carolina. with the improvement of design and production through digital technology, the time to market for ge - made turbine engines has been reduced from the usual five years to one and a half years. The efficiency is increased by more than 2 times.
Over the past decade, the Industrial Internet has created trillions of dollars of wealth—providing real-time data feedback to device owners so they can drive efficiency and productivity improvements. This is the transformation of digital + industrialization.
In the era of data as a new productivity, how to deal with the challenges of technology, market, capital and model, GE's choice allows us to see the power of industrial giants to innovate.
In the next ten years, data will be more precise.
It should be noted that pre dix is only a part of ge digital, and ge digital is only a part of ge's digital business strategy. even if pre dix is to be sold, it definitely does not mean ge will give up the digital business. This is the major premise for understanding the transformation logic of this industrial giant.
Because, the goal of data transformation itself is to provide more complete services to customers. the value of data assets lies in many usage scenarios of " post - market" of industrial equipment. Therefore, ge today is not trying to shovel off the " stadium" but is only narrowing the border.
Mr. Flannery said earlier this year that GE plans to focus on software and core businesses for existing customers rather than serving other industries. He plans GE Digital to make ends meet by 2020.
In other words, ge's development strategy no longer emphasizes the core influence of software companies. it begins to understand that the essence of ge's software has always been to provide value-added services to its own customers, so the extension of service capabilities should of course have boundaries.
Flannery knew where the border was, and he was well aware of the enormous value GE had accumulated over the previous decade.
Because the significance of the data lies in the analysis and processing, by helping customers achieve the transformation of industrial digitization, GE has actually got everything it wants-creating digital, it has realized the integration of physical machinery and analytical technology; The use of data and analysis to create data for each key process and physical equipment enables enterprises to reduce production costs; data-driven products are brought to market with tremendous innovation through the new data-evaluation-based marketing model.
Therefore, it can be understood that the platform-side pre dix cloud is the core of the entire pre dix program. the rich industrial data collection, analysis, modeling and industrial application development capabilities accumulated in the past have been sufficient to guide the big MAC enterprise to complete the innovation of its production process.
To put it more directly, ge was once praised as the driver of the new " digital industry" era. the first-hand feedback data from the market, excluding the components of public relations discourse, is indeed enough to push ge to complete its historic leap. And this is likely to be ge's strategic logic of forcing its own reforms by expanding its digital services.
Today, Predix can still sell a good price at a high position, and the accumulated data value and data pain points and experience learned in communication with customers have long been internalized into GE's true "digital assets" - GE's goal has been achieved. .
Digital Business: GE sees New possibilities for Industrial Development
IBM is the only technology company with 105 years of history. From tabulating to mainframe computers, from desktop Internet era personal computers to today's cloud servers, artificial intelligence IBM has undergone many transformations, each time leaving an elegant back. The transformation has stepped on the rhythm of the times.
I believe that when IBM is making every big transition, it must also face criticism and debate; from the Watson and the sons to Rometty, the transformation of the Blue Giant is a new inspiration for how we see GEs.
The process of industrial development transfer is the thinking center of the century-old store GE. When GE is examined again by the outside world with a magnifying glass, we should not forget the era environment behind the change.
There is a pattern of urban development: most cities revolve around the rise of industry, after success, housing prices rise, large-scale industrial production activities are forced to move to the edge of the city, and small workshops are still scattered in all corners of the city, forming a complex network.
But what if the manufacturing industry is completely disappearing? Globally, European housing prices, represented by Paris and London, remain high, and continue to pursue urban planning that gives priority to housing development. Despite the rhetoric of economic rebalancing and export value, London is losing its industrial infrastructure. According to a study by the Financial Times, a 2015 report to the Greater London Government (GLA) found that London had lost 600 hectares of industrial land in the previous seven years.
How manufacturing can survive in a rapidly expanding city is a new, but less focused, century problem.
As I said at the beginning of the article, GE made a crucial decision that no one dared to make, and that decision was to lead GE to a new industrial age - in short, in the explosive urban development, industrial facilities would explore the possibility of small, urban convergence.
Another proof is India, where cities are extremely crowded.
Although the name of the Indian industrial zone is loud – such as the Mangolpuri industrial zone – visitors who expect to see large factories here have to accept the fact that they do not match expectations. In these three-story buildings, most companies only occupy one floor and there are not many mechanical devices. Many devices have been bought in several hands and can only be operated semi-automatically or manually. A number of high-tech automated machines are usually refurbished second-hand goods imported from abroad. In fact, the Indian manufacturing industry is almost incompatible with the scale.
That is to say, with the development and change of the urban industrial model, the commercial forms such as urban industry, small-scale products and so on are faced with new challenges along with the industrial enterprises themselves. New businesses and new scenarios are emerging where service providers like GE have to work hard for land and factory size.
In the first decade, the digital business took a big leap forward, testing and error on the scale of the emerging sector --- GE began the process of narrowing its boundaries when it provided enough services and knew enough data for enough businesses. We need to be aware that data collection is a process, not an end in itself, and when GE has perceived the changes of the times, the digital business that underlies the judgment is justified.
It cannot be said that manufacturing is weakening-it is exploring its own way out of the storm of urban transformation, and that GE's digital business has failed-the digital business is now the cornerstone of GE's decision-making judgment. Divestiture of non-prime assets is more like good news, as GE is likely to have seen new possibilities for industrial development from past digital assets.
I firmly believe that we will see a better GE. (the first titanium media, author / shenshidi)
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