Tag Archives: GE Digital

What Went Wrong With GE Digital Transformation

GE was on the verge of dominating the industrial internet. Suddenly, it doesn’t. What happened to the GE digital transformation? 

The ambitions that entail GE digital transformation is no secret to us for years. However, there is so much negative news that surrounds GE and its grand vision these days. In other words, GE digital transformation (DT) is considered a failure. What went wrong? Before discussing that, let’s first have a little background. 

Behind the curtain 

GE’s DT initiatives began way back in 2013. GE began developing Predix, the company’s supposed-to-be software platform for the industrial internet. A year later, the company announced that it was generating more than $1 billion in revenue from productivity solutions. In 2015, GE announced the creation of GE Digital, the company’s new business unit. 

Afterward, a year later, GE reportedly had more than 1,500 employees in its office in San Ramon, California. Publicly, things were really going great for GE Digital. However, the picture was less rosy internally. Listed below are two of the many factors why. 

  1. In practice, GE Software was an internal development shop. The company has numerous business units, including Aviation, Transportation, Power, and others. However, these business units all had IT development needs. Hence, GE used the resources from GE software to implement “innovation”.

It was more like digital enablement. Moreover, GE Software’s revenue came from billing other GE business units, not external customers. 

  1. GE Digital started selling services to other industrial companies. GE was offering to help them on their own DT journeys. Thus, the company also became a consulting firm. According to reports, GE had mixed returns on these efforts. 

Indeed, GE achieved some significant improvements thanks to GE Software and GE Digital. However, there were no game-changing, multibillion-dollar innovations. The company only achieved gradual improvements and made them slightly more competitive. 

What Went Wrong 

DT isn’t just adding technology to the existing model. It is about rethinking your current business model to adapt to the digital era. However, most companies fail to do so as it is extremely difficult. Furthermore, implementing the entire DT process in-house will surely lead to failure. 

For GE Digital to have succeeded, it needed to be separate from GE. Making GE Digital its own business unit was a smart move. However, it also took the roles and responsibilities of GE software. You don’t need thousands of people to be successful in your DT initiatives. All you need is a small group of people with an innovative mindset. 

Finally, you need to start small. Most companies attempt to accomplish the entire process at once. However, attempting to do so is a recipe for disaster. GE tried to transform each and every one of its business units and look at what happened. 

Start the process with one industry and one business unit. Then, use the momentum you’ll achieve from the success of that project and spread it to other divisions. 

It is not yet too late for GE digital transformation. There’s no reason it can’t be successful. However, the company needs to structure its digital business correctly. 

Digital Transformation Business Model: Comparing GE And Target

Of course, you’re here for a digital transformation business model. Yes, you want to get inspiration from the success of others. But, there is no silver bullet that can ensure the success of the digital transformation.

Here, we’ll look at how General Electric’s (GE) digital transformation differs from Target. You’ll learn which digital transformation business model you should follow. 

GE Digital

General Electric aspired to be the only owner of the industrial internet. But, unfortunately, the American corporation stretched its resources too thin in this quest. So, it leads to a disastrous digital transformation initiative. Why?

GE Digital was established in 2015 as a separate organization. Its goal is to centralize all company’s IT operations. As you know, GE spent billions of dollars on digital efforts. First, of course, to become one of the top ten software firms by 2020. 

GE Digital acted as a separate corporation to manage the company’s digital operations. Yet, the unit’s goals were opposed to the company’s expertise. Moreover, GE was too hasty, switching from massive machinery to cloud-based software solutions. As a result, it backfired, placing GE in a deep economic quagmire.

Yes, GE Digital was unable to invest in long-term plans. Instead, GE focused on short-term objectives. Objectives that did not provide significant value to the firm.

The backlash resulted in a drop in stock prices and financial stability. And, of course, a terrible reputation.

What Went Wrong

What can you learn from the incident?

  • GE had a good intention, but it got lost trying to achieve everything at once. Driving digital transformation without a clear vision is a suicide mission.
  • Digital projects fail due to a lack of balance. A balance between business needs and capabilities. 

Common Reasons For Digital Failure

  • Uncertainty about what digital transformation entails
  • Management’s unwillingness to buy-in
  • Trying to accomplish everything at once
  • There are no tangible criteria to track digital advancement.
  • There isn’t a plan in place to deal with change.

Target

Hundreds of Target shops are providing customers with easy and inspiring shopping experiences. It is all possible with the support of a comprehensive digital strategy. So yes, Target is focusing on improving its consumer personalization capabilities.

Moreover, Target offers its customers the advantages of both e-commerce and physical stores. In return, allowing them to take advantage of both in-store and digital perks from the company.

Furthermore, Target also used offline sites to ramp up its digital operations. Yes, they didn’t replace their existing physical stores with the digital platform.

Also, the retailer’s physical locations are handling roughly 80% of their internet volume.

What They Did Right

  • Rather than succumbing to the sheep effect, Target took a different approach than its competitors. Rather than shutting down the stores, Target renovated them to handle internet traffic.
  • Target’s same-day delivery service was a big hit with customers. In addition, target expanded its digital fulfillment capabilities by partnering with Shipt.

Keys To Success

  • Having the appropriate leaders at the helm of the digital train
  • Upskilling the workforce in preparation for the digital future
  • Creating a continuous communication route
  • Using digital technologies to improve existing methods
  • Proactively managing change

WalkMe is a digital transformation platform that has rapidly grown to meet the enormous demand for next-generation digital learning.

You can learn at WalkMe with your digital transformation journey.