1 of 3 Chapter 12 Enhancing Decision Making 487 Is Predix GE's Future? CASE STUDY Gregon rendre eneral Sectric ( Game of the world's larg can run on any doud infrastruct. The platform est indestrial companies with produces rangs open standards and protocols that allow custom es to more easily and quickly connect their m equipment, has been transitioning to a much more chines to the Industrial Inteet. The platform can technology-centric business and business accommodate the site and scale of industrial daca model. Jeffrey Immelt, GESCED from 2000 to 2017 for every customer carent levels of use, but it wanted to turn into a top 10 software company also has been designed to scale up as demand grows. by 2020. In 2015 GE set up GE Digital as its own Predix can offer apps developed by other compa business within the industrial conglomerate for this mies as well as GE I wallable for on-premises or purpose dodhased deployment and can be entended by GE has been focusing on electric power come with their own data sources algorithms, jet engines, locomotives, and finger and code Customers may develop their own cus and the software to connect the devices to the applications for the Predi platform. GE is also dood. The company is using sensated data building a developer community to create apps that from industrial machines to help customers momiam be honed on Predi. Predix is not limited to in equipment performance, preventbrown, and dustrial applications. It could be used for analyzing the machines overall health. This emerging daca in healthcare systems, for example GE now has technology opened new opportunities for GECUS a Health Cload running on Fredis Data security is tomers to analyze their loT daca while also helping embedded all platform application layers, and this to transform GE from a traditional manufacturers is essential for companies linking their operations to modem digital business the meet In a number of industries, improving the produce GE Carly Predix to monitor and maintain tivity of existing by even a single percentage son industrial products, such as wind turbines point can generate significant benefits. This is true of je engines and hydroelectric marine systems the oil and gas to where average overy of Prediksi to provide GE Corporate come an oil well is 35 percent. That means 6 percent of machine operators and maintenance engineens with well's potential is left in the earth because available maltime inform to schedule maintenance technology makes it to expensive to extract. Ichched, improve machine efficiency, and reduce nology can help of extraction companies as the downtime Helping customers collect and use this recovery rate from 3510 35 percent, the world's operacional data proactively would lower costs in put will increase by B0 billion barrels - the equivalent GE Service greements. When GE agrees to provide of three years of global supply rvice for a castomer's machine, it often comes with The oil and gas industry is also deeply affected a performance Proactive Identification of by tnplanned downtime, when equipment cannot potentials that also takes the cost out of shop operate because of a malfunction. A single produces the come and helps GE tive day on a platform can cost a liquefied natural In early 2013. GE began to use Predix to (LNG) facility as much as $25 illion, and an analyze data con i formachines. By iden average mistad LNG facility experiences about the yin what made one machine more efficient or down days a year. That's $125 $0 $150 million on downtime-prone than another GE could more tightly Minimizing downtime is critical specially consider manage its operations. For example, by using high- Ing declining revenues from lower the price GE performance analytics, GE learned that some of its wees a $1 billion opportunity for stor software. att engines were beginning to require more The foundation for all of CES Industrial Internet the scheduled maintenance. By collecting (IoT) applications is Predix, a software platform massive amounts of data and analyzing the data launched in 2015 to collect data from industriales con este feet of machine GE was able to sors and analyze the information in the cloud. Preis der engine dau by operating environment. The 2 of 3 488 Part Three Key System Applications for the Digital Age company found that the hot and harsh environments events affect their risk and make a time decisions in the Middle East and China caused engines to clog about where field service Cews should be deployed heat up, and lose efficiency, so they required mot along the pipeline. The risk of visual maintenance GE found that engines had far fewer zation and analysis capabilities rem on Predi of these problems if they were washed more fro GE pulling data from weather systems and quently. Feet analyties helped GE increase engine diyeporting services to provide compre- lifetime and reduce engine maintenance. The com hensive view of a pipeline network Weather has a pany thinks it can save its customers an average of able impact on for pipelines in a prone to 57 million of jet airplane fal annually because their seismic activity and wants Checking engines will be more efficient weather games on the sands of miles of pipe for Predex is starting to provide solutions for GECES rain or Boods and integrating those dau with tomers. The New York Power Authority, the nation's other complex pipeline de ses is very difficult to largest owned utility, has been working with performancally. Not by bringing all relevant data GE Digital to build apps that improve the efficiency sopether in one place. Gre pipeline operator of its power generation and distribution network easier formation to help them address Pilot projects with GE have saved the utility $3 mil- areas with the goal impact tion in costs. The goal is $500 million in sings Besides being currik the next decade. British oil and gas company RP plc pipeline operation would be from whical switched from its own software to Predis to monitor culation tool to modellopothetica senato, such conditions in its all wells. By the end of 2015, RP had assessing the impact of ting pating equipped 650 of its thousands of oil wells with GE Soros or addressing particulars of corrosive pipe senos linked to Predir. Each well was outfitted with GE would give them the tools for a color-coded view 20 to 30 Sensors to measure pressure and tempera of how the actions to pipeline tik ruire, transmitting 500,000 data points to the Predix Although few businesses are the capital or in cloud every 15 seconds IP hopes to use the data to frastructure to operate a place for integrating predict well flows and the fallife of each will and analyzing lot dau, Geces competition tom and ultimately to obtain an enterprise-wide view of many sources including giant doad is stip its oil fields performance plienske Amazon Microsoft, and Google, major GE Identified pipeline risk management as a business Software companies Grade SAPTAM major challenge for the oil and gas industry. There and SAS Institute, industrial conglomerates like are 2 million miles of transmission pipe throphout Siemens Honeywell, and Anandapi the globe, moving liquid all or pas from its point of IoT, Uptake and Follom Systems Es advantage is extraction to refining processing or market. Pipeline its longstanding relationships with comes Sob spills are not frequent but when they occur, they only 8 percent of industrials are mine catase serious economic and environmental damage Tredix portfolio proces as well as bad publicly for pipeline operators and en In November 2007. Jeff Pamery, who had ergy companies. Pipeline operations are always and coded immeas GESCEO announced that spend Sous to know where their best rupture will be but ing on GE Digital and Predit wood be cut by mone they formerly lacked the data to measure pipeline than 25 percent, ar 5430 million Digital initiatives fitness Operators had no way of integrating mille test critical to the company nevenless and sources of data into one place so they could set and Flannery wants Predi 51 billion in a understand the risk in their pipelines mul revenue. However, anney want this accom GE developed a pipeline-management Software plished via am fost In July 2018 site for accessing, managing and integrating critical the company announced it was socking a buyer for data for the safe management of pipelines, including kes parts of digitalni a risk assessment tool to monitoring in GE had greatly understand the challenges mm GEX risk-ment solution combines internal of creating all the same needed for analyzing and external tactors (such as flooding) to provide an Internet of Things (IoT) das improve business accurate, up-to-the minute visual representation of process across a wide range of industries GES where risk exists in a pipeline. This risk assessment technical expertise in designing and munur tool enables pipeline operators to bow recent in tuachines the power jetenie plant turbine Chapter 12 Enhancing Decision Making 489 and medical imaging equipment and in creating Lohr, GE Makes a sharp Pivot on Digital, New York Times, April the specialized software to control machines in fac 19, 2018; www.gc.com, accesed May 3, 2018; Courney Borlin, GE tory operations. It was too much of a stretch for GE Predwx Platformu's Focus Narrows as Flannery Cuts Digital Spending." miernet of Things Inartue, November 15, 2017, Alwyn Scott, "GE Digital to move quickly into cloud-based software to Is shifting the strategy for its $12 withion Digital Business, Reen handle all kinds of sensor and machine data and big August 28, 2017, Laura Wing, 'GE's Big Bet on Data and Analytics, data analytics for the entire Industrial Internet. GE MIT Sloan Management Reviete February 2016; Devin Leonard and also faced difficulties adapting its own legacy appli- Rick Clough, "HOW GE Exorcised the Ghost of Jack Welch to Become a 124-Xtar-old Startup, Bloomberg Buren, March 21, 2016 and cations for Predix. GE has many algorithms for moni Holly way, "Ge Leverapas Pivotal Cloud Foundry & Bulld Pradix toring its machines, but they mostly were written First Cloud for Industry,"CloudFoundry org. May 11, 2016. in different coding languages and resided on other systems in GE businesses. This made converting CASE STUDY QUESTIONS the software to run on Predix time consuming and 12-13 How is GE changing its business strategy and expensive. Predix has been pared back to be primar- business model? What is the role of informa- ily a set of software tools to help write applications, tion technology in Ge's business? as opposed to connecting to layers of code to auto- 12-14 On what business functions and level of deci- mate data analysis. GE Digital now focuses on selling sion making is GE focusing? products for specific industrial applications tailored 12-15 Describe three kinds of decisions that can be to GE's existing industrial customers rather than all- supported using Predix. What is the value to purpose software for the wider industrial world. the firm of each of those decisions? Explain Sources: Dana Cimitucca, Dana Matsott, and Thomas Gryta, "GE PU 12-16 To what extent is GE becoming a software Digital Assets on the Block Wall Sreet fournal, July 30, 2016, Steve company? Explain your