Insights from the digital transformation of engineering
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Insights from the digital transformation of engineering

Sooraj Shah — October 2018
GE’s CDO Bill Ruh shares lessons learnt while leading a revolution at the industrial giant.

Since 2011, when William Ruh arrived at engineering company GE from Cisco, his role has never quite stayed the same. He explains that this is because the playbook for the role of a chief digital officer (CDO) is still being written. That’s how it once was for CIOs, as he says.

“If you go back to the early days of IT, there was no CIO. It took 20 years or so to figure out the standard model for IT — and its chief — and that’s currently what we’re going through on the digital side,” he says.

But in those seven years, Ruh says he has learnt a lot about what being digital means, and how it stands apart from traditional IT. In particular, he says that companies that keep ‘digital’ as a separate function from the rest of the business will ultimately fail because digital has to be built into the way business is done every day.

GE as a business learnt this the hard way when it created its own in-house software center of excellence, which channeled digital specialists such as data scientists and cloud experts into a separate function that acted as an internal consulting arm of GE. It then moved a lot of these capabilities into the separate GE businesses to support their digital transformation efforts.

Bill Ruh, CDO of GE
“We took that group and pushed it into the businesses and created CDO roles in each, with each reporting dually to the CEOs of the business and to me,” Ruh explains. “They were tasked with building out a portfolio of their own company in their own businesses, and we were tasked with building a horizontal framework that each business used to build their capabilities,” he adds.

That led to the formation of GE Digital, where Ruh is CEO. He argues that this complements the CDO role as it enables GE to monetize some of the technologies and capabilities it develops by selling them to its customers.
Digitalized assetsRuh believes that CDO’s main priority of driving digital into the organization’s products and related services needs to be informed by a background in product management.

“Technical experience is not good enough. You have to be able to understand portfolios, what the opportunities are, experience of the market and how to build a product. And CIOs don’t necessarily all have that capability,” he says.

Ruh echoes many technology leaders when he says that the hardest part of digital transformation for industrial companies is not applying the technology but shifting the culture. That has inspired the adoption of agile and DevOps, with the company remaking its entire software development process around the approach. “Creating DevOps is a lot harder than you think, and getting the right talent in order to run it effectively was very hard,” Ruh states.

GE used some of the ideas from Eric Ries, the author of The Lean Startup to create its own approach on product management. “That’s where we’ve seen the biggest change — you can put agile and DevOps in place and see zero productivity unless you change the nature of product management, how you envision a product and what input to focus on,” he says.

All that said, Ruh does argue that certain projects, such as building a jet aircraft engine, are still more suited to a waterfall project approach. 
IIoT-enabled factoriesThe Industrial Internet of Things (IIoT) is another area of intense focus for GE. But many of the discussions on the subject within the industry rarely capture its future potential, according to Ruh. He portrays IIoT as just the first step towards autonomous factories, fields and fleets.

“Autonomous is the ultimate vision for IIoT. To get such [assets] to operate and interact with maximum efficiency, decisions need to be made in real time, and humans can’t do that. For example, in a wind farm, IoT will be the basis for dynamically adjusting every control system for individual wind turbines, drawing on all of the sensor and other data that will show how to achieve the greatest efficiency with the least amount of potential maintenance,” he outlines.

Indeed, with connected sensors increasingly built into assets and processes, the company is also able to build ‘digital twins’ of these physical elements, enabling engineers to run accurate simulations of events without bringing the real system to a grinding halt.

Ruh also predicts that IIoT will be dramatically enhanced with the addition of AI and machine learning. Again, a cultural shift is necessary so that employees start to be comfortable with machines telling them what to do, rather than the other way around.

While the benefits of IIoT in the future have become clear, one big challenge stands out: the security of the billions of devices and their software. Companies need to rethink their architectures as IIoT architectures. They should also consider whether they need a two-way flow of data and logic: “They can isolate devices by only enabling data extraction and not letting commands come in. But Pandora’s box is already open and if people don’t act they can expect a cybersecurity problem,” he says.
First published October 2018
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