Our CEO, Jeff Immelt, likes to say that if you woke up as an industrial company today, you will wake up as a software and analytics company tomorrow. He doesn’t mean that you’ll be selling software; he means that software will be an important part of whatever you’re making.
At GE, we’ve spent five years and a billion dollars learning how to become a software and analytics company. We’ve learned some amazing lessons along the way, and I’d like to share some of those lessons.
Lesson One: It’s not enough to connect machines.
You have to make your machines smarter. You need to figure out the best ways for embedding intelligence into machines and devices. Then you need to develop the best techniques for collecting the data generated by those machines and devices, analyzing that data and generating usable insights that will enable you to run your equipment more efficiently and optimize your operations and supply chains.
Lesson Two: You cannot use yesterday’s technology to achieve your goals in the era of the Industrial Internet.
In fact, you cannot use today’s technology. You will need new kinds of technology and new ways of thinking about that technology. Throughout the history of humankind, every significant leap forward was driven by new technology. This time around will be the same – we’ll need to invent, develop, and deploy new technology to move forward.
Lesson Three: Don’t think of the Industrial Internet as an IT project.
Think of it as a business project. Its goal is generating positive outcomes for your business. Your Industrial Internet initiatives should be led by business people, not just by technologists. If your leaders don’t embrace the ideas and concepts of the Industrial Internet, it’s unlikely that your efforts will succeed.
What does all of this mean out in the real world? Let’s say you’re operating a passenger airline. If you have intelligence built into the jet engines on your airplanes, you’ll know when those engines are likely to develop problems and you can schedule maintenance before those problems occur. As a result, you will rarely be forced to reschedule a flight due to a mechanical problem with the engines. That could save you millions of dollars every year and give you significant advantages over your competitors.
Or let’s say you’re operating a wind farm. Knowing exactly how and when to adjust the individual blades on each wind turbine can improve the overall efficiency of the wind farm. Multiply that capability by the number of wind farms you operate and you’ve increased your power output significantly, without building a single new turbine.
Another example: If you’re operating a network of railways, increasing the average speed of a locomotive by just one mile per hour can be worth $200 million annually. That’s a great example of how machines and devices with intelligence built into them contribute greatly to the bottom line.
Here at GE, we take the idea of becoming a software and analytics company very seriously, because we believe that every product can be improved and optimized by making it smarter and more connected. In the future, our grandkids will be amazed to learn that “old fashioned” machines were not equipped with software and were not connected to networks. They’ll shake their heads and wonder how we managed to survive.