Reinventing the Value Chain for the Age of the Industrial Internet

When I talk about the Industrial Internet at conferences and seminars, I tend to focus on the many ways in which it will change our lives and transform the world around us. Mostly I talk about the Industrial Internet’s amazing potential for creating a new wave of operational efficiencies that result in smarter towns and cities; near-zero unplanned outages of power and critical machinery; enormous savings of fuel and energy; and exponentially better management of natural resources.  

But there’s another revolutionary aspect of the Industrial Internet that I discuss less often, even though it’s just as important as the benefits mentioned above. The part I usually don’t talk about is how the Industrial Internet is transforming not only software development and hardware design, but the entire value chain — everything from start to finish, including new product conception, prototyping, sourcing materials, manufacturing and distribution to customers.

In addition to providing the world with thousands of new products and services delivered at reasonable price points, the Industrial Internet will fundamentally redefine relationships between everyone at every link of the value chain. It will be a transformation of absolutely monumental proportions, a true paradigm shift.

How will all of this affect those of us on the front lines? The biggest change that I see is in how we work together. Five years ago, “collaboration” was often used loosely as a buzzword. Today, it’s at the heart of everything we do. Collaboration is foundational to the whole process of creating and developing viable new products and services for the Industrial Internet.

Why is collaboration essential now? In the old days, software developers would write code and “throw it over the wall” to operations people in IT. If there was a problem with the software, the folks in operations were expected to deal with it. When product lifetimes were measured in years or decades, that approach was considered acceptable. Today, when products and services are updated on a continuous basis, there simply isn’t enough time for that kind of laissez-faire approach. That’s one of the reasons DevOps has become popular. DevOps combines software development, testing and operations. It depends on cross-functional teams and close collaboration. It rejects the notion that software developers and operations people can’t get along.

DevOps for the Industrial Internet requires an even higher level of collaboration. Harel Kodesh, the CTO at GE Software, calls it “extreme teamwork,” a phrase that accurately captures both the passion and intensity of our approach.

I think it’s fair to say that we’re reinventing the value chain concept, especially as it pertains to technology. We’re reaching for new levels of interdependence and interoperability. Achieving those levels will require a truly 21st-century approach to collaboration and shared effort at every step of the value-creation process.