Tales From the Digital Industrial Frontier
As the industrial Internet continues to evolve, it's important to keep in mind how it can be applied to solve real-world problems. Here's some advice.
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The rise of data has drawn a frontier in our organizations.
On one side of it is the kind of decision making we are all familiar with, a mix of anecdote, reliable, and unreliable information, and our best guesses. Across the frontier is a better kind of decision making, where a new transparency, created by data flowing from and through every part of our businesses, creates tools for people to make wiser and more profitable decisions.
Crossing this digital industrial frontier is not without its dangers. When you work in IT, as I have done for my entire career, you sometimes end up knowing certain parts of your business better than the people who run it. And what you choose to do with that knowledge—who you tell and how you tell them—can determine whether it becomes a vehicle for innovation or a point of contention.
But crossing the digital industrial frontier can also reward you and your business far beyond everyone’s expectations. When you’re willing to use data to identify and tackle new problems, the riches you can discover and the speed with which you can discover them are truly astonishing.
That’s because with data the decision-making happens differently. Beyond the digital industrial frontier, the IT function doesn’t just support the rest of the business, but actively informs and transforms it. For this to happen, decision makers in IT have to bring their insights to every part of their business, starting at the highest strategic level. Wherever important decisions are made, they have to be willing to be present.
Here are three moments I found myself crossing the digital industrial frontier, and some of what I learned in the process.
From Impossible to Up And Running in Two Weeks
It’s 5 p.m. on a Friday. I’m in India, getting ready to board a plane back to the U.S., and my cell phone rings. It’s the leader of one of GE’s global businesses.
“Hey Jim,” he says, “If you were buying milk today, and you knew you paid more for it than you did yesterday, wouldn’t you want to know why? And then wouldn’t you find out how to get the price down to what you paid before?”
“Of course I would,” I replied.
“And if you were buying parts for GE, wouldn’t you think the same way?”
“I suppose so,” I said.
“Is there a way to let us know immediately whenever we pay more for a part than we did that last time? I’ve got a roomful of people here who say it’s impossible.”
“Let me see what I can do,” I said.
My flight was leaving in two hours, but I called up the sourcing IT leader for the business I’d just spoke to. I asked for a report that priced every part purchased that day against what had been paid the last time.
His response: “That’s probably impossible. In fact, I’m sure it’s impossible.”
“Okay,” I said, “I’m grabbing dinner before my flight. But let’s see what we can do in the short term. Can you try it for just the top ten parts by cash volume? And call me back in a couple of hours with whatever you’ve got?”
After dinner, I learned that not only was it possible to run the report I’d asked for but it was possible to do it for every part. And five hours later, in the concourse on the way to my connecting flight, I got a text automatically informing me that one of our buyers hadn’t received his best possible price for a part just that day.
Within two weeks, that text had turned into an automatic notification system for the entire business. And within a month, it had turned into a notification system across all of GE. Today, it’s an application we use called Source Check, and it’s an example of how digital industrial technology can save money by linking physical assets, business processes, and people.
It’s also an example of the most constructive way businesses can use data. Instead of turning it into a weapon to track down and punish buyers with the “worst” records — we used it to improve a process, and forge a tool that the whole company continues to use to build an advantage over the competition.
Between Trust and Transparency
One of the first times I ever found myself crossing the digital industrial frontier was when I was asked to take on a job that nobody else wanted. The problem I had to solve was hidden in about 500 spreadsheets being used across one of GE’s service businesses. Manual errors in data entry and calculations were impacting the profitability of our contracts. The delta between our expected value and actual value was widening.
The problem had come to the attention of the senior leaders, and the only people capable of solving it were in IT. The catch was this: at that point in GE’s history, IT didn’t have the credibility or the authority to be allowed to touch process where even the smallest change could cascade into millions of dollars of impact.
People understand what happens in a spreadsheet, but they don’t necessarily understand what happens in a software application. And when their job depends on developing that understanding, you’re no longer just in the IT business. To make change happen, you’ve also got to become an educator, a diplomat, and a salesman. The solution to my problem was entirely digital, but getting there required a hefty analog lift — slowly building influence and credibility from scratch and then spending that credibility wisely.
Just having the data wasn’t enough. I also had to walk the fine line between the data’s promise of transparency, and the trust I needed to use it.
Getting everybody on board proved to be worth the effort. In mining the data across those 500 spreadsheets for errors, we struck gold. The centralized, streamlined system that replaced the manual spreadsheets didn’t just eliminate past errors, it actually predicted future patterns. By getting an informed set of predictions, the entire business, not just the accounting department, was able to plan better for the future.
Bring the Frontier With You
The digital industrial frontier isn’t a dividing line between IT and the rest of the company. It’s a dividing line between people who are open to the possibilities that data offers and people who aren’t quite there yet.
I’ve even found myself delivering unexpected, data-driven news to people, who already spend every day at the intersection of data, machines, and business processes.
In the case of one GE quality assurance department, run by capable software engineers, I was invited to take an audit of their information flow. They welcomed the audit but told me that it was probably a waste of my time. They only used a handful of processes, and those were already lean and centralized. They were fellow engineers, after all.
Yet I found myself coming back a few weeks later with a list of more than 50 different processes they were using. I had to ask the uncomfortable question of which one they wanted to keep.
After the initial shock, they were happy to let go of a lot of unnecessary complexity, not to mention the added cost that came with it.
Having the the data with me in that meeting helped keep emotion from short circuiting the decision-making process. It prevented that initial shock from turning into indecision or even paralysis. And It’s a dynamic I’ve observed in many similar conversations. In the right time and the right place, data drives a better decision-making progress.
If you’re a CIO or any type of IT professional, and you find yourself with some data that could provide valuable benefits to your company, I challenge you to draw the line that marks the digital industrial frontier in your own organization—and then invite your colleagues to cross it with you.
Dare to see yourself as a process owner or a process champion, not just a process supporter. It’s as much your responsibility as it is anybody’s to show people the radical new outcomes that data alone can create. When the data flows freely, data allows companies and their customers to achieve what they couldn’t before. It unlocks new productivity and the potentially huge increases in revenue that follow.
Check out conversations from GE's Minds + Machines 2016 conference to learn more about digital industrial transformation.
Published at DZone with permission of Jim Fowler, DZone MVB. See the original article here.
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