GE Power’s CDO is transforming his company and an industry

GE Power’s first ever chief digital officer, Ganesh Bell, leverages years of software expertise to drive innovation within GE and with customers, including his own CIO.

1 2 Page 2
Page 2 of 2

Bell: There are many ways to measure this. We have talked [publicly] about our targets for digital. By 2020, we’re targeting more than $14 billion from digital, $10 billion of it from applications and about $4 billion from the platform itself. Last year we did about $5 billion and this year we’ll do north of $6 billion. More than half of it is in the Power space.

We also measure in terms of assets under management internally, how many devices we’re connecting and the value we can create from that for our customers. Also, there are about 8,000 developers across our partners and customers that are using our platform today. We expect to hit about 20,000 by the end of the year. We’re measuring it in terms of our business, we’re measuring it in terms of our customer outcomes that we can drive as well as partners who can build and extend solutions on top of our applications. How are you working with customers so they understand this vision and then how do you work with them to actually help them change their own businesses? I imagine there must be some political or other hurdles along the way.

Bell: I would say there is an education complexity right now just like when Software-as-a-Service became available. It was education to the buying centers. You had to educate the heads of sales that there was a software solution they could buy and deploy right away. We’re bringing CIOs to the table where they had never been part of the conversation, at least in the power industry.

There is an education that is happening on what is possible with digital. But more interestingly, our customers start the journey with us in terms of outcomes. I’ll give you some examples. Maybe that would illustrate this transformation happening. A2A Energy, which is a large multi-utility Italian company, had a power plant in Chivasso that they had mothballed, meaning completely shut down. It was not competitive in the European ancillary seller’s market because they had over-capacity of power in Europe and renewables are still growing and so they had to force some of the gas power plants that are not competitive to be shut down.

We began discussions with them about what we can do with digital in a completely different context. We said: Can you give us the operations data from the power plant for the last couple of years? We looked at the data and when we modeled it in a digital twin we understood that the power plant was operating nowhere near its theoretical potential. They deployed our software and we brought back the power plant to life.

All the jobs are coming back to the power plant and they have been successful in dispatching that power into the grid and being profitable. That is an outcome [illustrating] what our software can do and that creates believers within our customers. Those kinds of stories get relayed to other customers. That’s what’s possible with software.

[ Related: GE CIO says IT leaders need to focus on customers' revenue ] Before we run out of time, I want to shift over and talk about how you work with Clay Johnson, your CIO colleague at GE Power. Can you talk a little bit about that relationship and how you intersect on these digital transformation efforts?

Bell: Clay is responsible for all IT inside power. That’s all internal IT applications like ERP, CRM, etc. Also, how we work has to become digital and I partner with Clay on how we work internally, meaning I work with him in setting the vision and the strategy and Clay and his team own the execution of that. That’s all internal IT.

How our products and services are being transformed digitally is a whole new digital business for us, whether it’s Software-as-a-Service or Outcome-as-a-Service and that is my business to go run. How we market, sell and engage is also transforming digitally. That is primarily my responsibility to drive that and Clay supplies the infrastructure for that.

When I talk about working closely with Clay, just like Clay buys ERP from enterprise software vendors or CRM from Salesforce for us to run our business internally, he buys the Asset Performance Management software from me. He is actually one of my best customers, not just an internal customer, because our monitoring and diagnostic centers across power operate our APM software. When I talk about operations optimization, our own services teams are starting to use the components of that software. He is also using Predix to connect all the factories that he is helping automate and digitize to a Brilliant Factory.

There is a partnership where we are setting the strategy for digital internally and there is a partnership because Clay is also one of my customers. He is buying the same solutions to run our own internal services business or monitoring and diagnostic centers for the factories. I think in some cases CIOs view CDOs as competitive, a view that, in essence, the CIO has failed to drive digital transformation and the company needs a CDO to do that. How do you make the relationship work with Clay?

Bell: Our metrics and measurements are clear. The definition of a chief digital officer means different things in different companies. In some companies there are people with a chief digital officer title which is basically just chief marketing technologist. They’re just doing digital marketing. That’s good but not good enough in terms of a digital transformation. You’ve got to go deeper than that. There are companies where it’s really about just purely internal productivity, in which case it’s the IT CIO stepping up to be the chief digital officer. That is still massively important. But in industries where we are, we’re trying to build an as-a-service business model, building a software business, it’s a whole different skill set.

When you think about chief digital officers as CEOs of software businesses, that’s a very different skill set than traditional CIOs. Our metrics are also very different. Clay is measured on how we drive productivity internally using IT, whether it’s consolidating our IT environment or driving productivity within our services businesses using software. Some of the software that he uses is from me. I am measured on growth, profitability, revenue, assets under management, value delivered to customers -- a very different set of metrics than what a CIO is measured on.

We’re very clear on what we’ve got to partner on and very clear on the focus of both internal -- where we partner digitally -- and external, with digital being a business that’s very different. I have one last question which is what are the keys to making digital transformation successful? You’ve been involved with this for a while and your company is clearly a leader when it comes to digital transformation. What makes it work?

Bell: Digital transformation has to be led right from the top by a very strong believer. I’m seeing it not just in GE but across the industry. With GE, it is Jeff Immelt, our chairman, and Steve Bolze, the CEO of power and the other CEOs. They are believers. They have a very strong vision, optimism, mixed with a healthy bit of paranoia. When digital happens in an industry, yes, productivity happens, yes, improvement happens but there is also a new landscape, new battle lines that are drawn. Whenever digital enters an industry there are a few big winners and destruction also happens. You’ve got to have believers at the top.

The second is you’ve got to have a culture that’s transformed in the company. It’s not just the culture of bringing in new DNA and new talent. It’s also transforming existing talent. For example, at GE we rolled out something we call FastWorks. We brought in people like Eric Ries, who is the leader of the Lean Startup movement. We codified what that means for even non-software people inside GE. There was a time when GE was known for Six Sigma. I truly believe GE will be known for FastWorks, meaning how we apply lean methodology across various disciplines, whether it be manufacturing a part in a jet turbine or quickly modeling new business models with our customers. It’s permeating the ideas from digital culture like Lean Startup, Agile, Design Thinking, FastWorks, into your culture.

The other is changing even your culture of beliefs. In the past, we had a 40-year-old bonus system that we valued people around. We take all that for table stakes. We introduced a new incentive program. We changed our cultural value system to what we call the GE Beliefs and you also had to create an environment for innovation. Our move to Boston is a signal of the fact that we want our headquarters to be in an innovation economy. It is things like that as well as driving a different set of metrics. Many of these apply to any industry to run a good digital transformation playbook.

This story, "GE Power’s CDO is transforming his company and an industry" was originally published by CIO.

Copyright © 2016 IDG Communications, Inc.

1 2 Page 2
Page 2 of 2
The 10 most powerful companies in enterprise networking 2022