GE's Kate Johnson: How CIOs Can Be Heroes - InformationWeek
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5/28/2015
03:46 PM
Chris Murphy
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GE's Kate Johnson: How CIOs Can Be Heroes

GE's new software group CEO aims its industrial Internet message at CIOs, as she helps GE up its software selling game.

Big Data: 6 Real-Life Business Cases
Big Data: 6 Real-Life Business Cases
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Kate Johnson becomes the CEO of GE Intelligent Platforms Software just as the Internet of Things is altering the landscape for industrial software. GE sells about $4 billion worth of software a year, but since that software is spread across its industrial businesses, the business has been fairly low-profile.

GE expects that profile -- and revenue -- to rise as industrial companies see the chance to collect more data from networked equipment, and analyze that data better to improve their operations, such as predictive analytics that can spot a looming breakdown so workers can prevent it. "You're starting to see a GE software footprint," Johnson said.

As more companies become digital businesses, and embed some kind of technology in their product or customer experience, they're going to face the decision GE did: Do we sell software as its own product, or do we bundle in software as part of the product? Whether you're selling a car, annuity, or amusement park ticket, software will become an increasingly important part of the experience.

GE does sell software as its own product, thought it does so largely to its installed base of customers in power, water, aircraft, locomotives, and other mostly industrial products.

"What 'good' looks like is when Power & Water sells more software to their installed base, to drive more value out of those assets," Johnson said. GE sells a portfolio of industry-specific software for managing and analyzing industrial data, much of it built on its Predix development platform.

GE IP CEO Kate Johnson

(Image: Pogonici/iStockphoto)

GE IP CEO Kate Johnson

(Image: Pogonici/iStockphoto)

Johnson wears two hats -- CEO of GE Intelligent Platforms, and Chief Commercial Officer, reporting to CMO Beth Comstock, where she's been working to improve GE's ability to commercialize software. Johnson comes from tech, most recently as a senior VP for Oracle's North American consulting business. Here are some insights from our recent interview with Johnson as she takes the CEO role:  

Why now for GE to push its software business more?

Two reasons, one external and one internal, Johnson said. Externally, would-be customers are ready to embrace analytics in a much bigger way to wring more value out of their industrial equipment.

Internally, GE is farther along on its own transformation, better integrating the role of analytics and a digital experience in the design and operation of industrial gear. Johnson has been focused since joining GE on helping the company hone its software selling.

"Selling industrial equipment and selling software is different. … Software is about selling an outcome -- there's nothing the customer can hold," Johnson said.

Are CIOs leading this digital industrial push, or getting pushed aside?

GE Intelligent Platforms is targeting CIOs directly with this message of analytics and digital business, Johnson said, "so you can be the hero."

Companies across industries face the same problem -- keep assets running, get more productivity from existing infrastructure. But digital business could get companies -- and IT -- out of pure cost-cutting mode. CIOs can be the person to bridge the information technology and operational technology worlds, since CIOs understand the data and how to drive cross-company projects.

"There's a digital revolution out there, and we have to figure out how to take advantage of that, not just by driving efficiencies but by finding new revenue opportunities," Johnson said.

So what's holding companies back from embracing the industrial Internet?

Complexity, Johnson said, and in particular knowing where to start. That's another area CIO experience helps -- knowing how to take an incremental approach to a potentially big project. Johnson recommends starting by getting one key asset networked, and running some time series analysis against it to start getting insight into its operations.

[Tear down the silos. See How Corporate Culture Impedes Data Innovation.]

"If you start with connecting one asset, it's addictive," she said.

Is the software group a spin-off play down the road for GE, like American Airlines' Sabre reservation tech business became many years ago?

Johnson says no: "We see our software as inextricably tied to our equipment." GE's competitive advantage in software comes from its knowledge of the industrial gear itself, combined with its new and growing software talent that includes a major software center in San Ramon, Calif.

"That's why we've been successful so far -- no one knows that pump as well as us," Johnson said.

[Did you miss any of the InformationWeek Conference in Las Vegas last month? Don't worry: We have you covered. Check out what our speakers had to say and see tweets from the show. Let's keep the conversation going.]

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio
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PeterF028
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PeterF028,
User Rank: Moderator
6/15/2015 | 10:40:58 AM
Leading innovation
As the CSC CIO Survey demonstrates, CIOs are in a prime position to serve as innovative disruptors...something that most organizations truly need as we enter into a world of tech convergence. Tech is the center of everything, and oftentimes, its the CIO who has the chops needed to help with application and optimal utilization. Peter Fretty, IDG blogger working on behalf of CSC. 
jagibbons
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jagibbons,
User Rank: Ninja
6/1/2015 | 12:05:48 PM
Re: GE's Kate Johnson: How CIOs Can Be Heroes
tzubiar, another critical factor in making this shift is to make sure your security and day-to-day operations are rock-solid. If you aren't consistent at "keeping the lights on," you, as a CIO, won't have the credibility to drive business value.
jagibbons
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jagibbons,
User Rank: Ninja
6/1/2015 | 12:01:01 PM
Re: Once again consumers get shafted
Agreed, impactnow. Every company has data that is valuable on the black market. No company is safe from threats and there are too many attack vectors. We all will be victims. We all need to have a solid response plan while still taking every available measure to reduce the likelihood. Make your systems less attractive as a target as the next guy. Maybe the criminals will pass you over.
impactnow
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impactnow,
User Rank: Author
5/31/2015 | 1:49:35 AM
Re: Once again consumers get shafted

While companies need to be accountable for data breaches at this point in time I don't think any company or government has the people or infrastructure in place to avoid a breach. If they are targeted sadly they will be breached, there are too many holes that aren't even known and we are all struggling to catch up with the hackers minutely.

asksqn
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asksqn,
User Rank: Ninja
5/29/2015 | 3:01:01 PM
Once again consumers get shafted
This article makes me chuckle.  Before ANY "digital" company can even begin to drool over/consider how best to massage mass quantities of data to predict anything (or spy on consumers) it really ought to focus on securing the data from breaches.  Instead, the typical rush to monetize the data is in effect.  I predict bigger, badder consumer breaches as the IoT and Fortune 500 cos. like GE rush to implement the fast buck revenue model.  Meanwhile, consumers end up on the short side of nothing (and ID theft) courtesy of lazy so called "C-suite" employees like Kate Johnson who can't generate revenue quick enough for shareholders.
SunitaT0
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SunitaT0,
User Rank: Ninja
5/29/2015 | 1:06:36 PM
Re: GE and software
@tzubair: Do you Xiaomi makes little to margin profit on their smartphones? What they make up for is software and services. So I don't think GE would fail because it would create more job opportunities and make competitors create better software and services.
tzubair
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tzubair,
User Rank: Ninja
5/28/2015 | 5:35:17 PM
GE and software
"Selling industrial equipment and selling software is different. ... Software is about selling an outcome -- there's nothing the customer can hold"

@Chris: I think venturing into software is one risky move by GE. What do you have to say about that? They might still be in the technology industry, but as Kate said, selling software or solutions is totally different game. There have been companies which had been lured into the software industry but they have had to give up quite soon.
tzubair
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tzubair,
User Rank: Ninja
5/28/2015 | 5:30:00 PM
Re: GE's Kate Johnson: How CIOs Can Be Heroes
"I was glad to see her championing the role of the CIO in this as well. People talk a lot about 'digital' officers, are marketing spending the big bucks, and whether we're getting replaced, but that's really a non-issue; tech expertise will be essential regardless."

@zerox203: I think the role of CIO has evolved and they have championed in the company because they have moved from a pure technical role to a business oriented role which is quite strategic in many cases. Previously, their contribution to business would come about mainly by the costs they would save in the hardware and software. Now, their real value addition is linked with the value technology adds in the company and shapes the direction of the company.
zerox203
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zerox203,
User Rank: Ninja
5/28/2015 | 5:05:21 PM
Re: GE's Kate Johnson: How CIOs Can Be Heroes
She's absolutely right about one thing; $4 billion is a lot for a business that most people won't normally associate GE with. It says a lot about how valuable their connection to vertical industries is via their equipment, and where those industries are going. I caught myself halfway through, realizing you were talking about larger-scale industrial gear, and not IoT-type-endpoints as we're tending to think of them (re: lots of small sensors) - I imagine that's going to add another dimension still when we're talking about analytics in the coming years, and GE wants to get out in front of that so they're the name everyone knows once the demand is there. Sounds smart to me. Combine tons of data there, commodity hardware working alongside specialized gear, and yeah, we're gonna need platforms and software to pull all that data together.

I was glad to see her championing the role of the CIO in this as well. People talk a lot about 'digital' officers, and marketing spending the big bucks, or whether we're getting replaced, but that's really a non-issue; tech expertise will be essential regardless. When you talk about delivering value, think about shaving just a few seconds or what-have-you off a processthat's operating at a huge scale. That's a ton of money saved. Doing it for one area of the business is a proof-of-concept for the others... and you can use the money saved to reinvest in more software, and more infrastructure, which is getting cheaper and cheaper. If you see an opportunity for that, CIOs can definitely be heroes... and you'll have to excuse me for humming the David Bowie song of the same name while reading this.
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