Prospecting for Australia’s digital gold

Yonatan Hagos is general manager of Emerging Verticals at GE Digital. That is, he applies GE’s learnings in using data to optimise processes and equipment in its own businesses, to industries outside the GE fold. He was recently in Australia, identifying opportunities in industries that are at an inflection point—where a leap in productivity or a revolution in process and asset use are required for future prosperity.

Hagos’s job, taking multidisciplinary teams to plant a digital flag in new industries is a little like cold-calling, but GE’s reputation for transformation proceeds him. As Hagos’s colleague, Mark Sheppard, chief commercial officer for GE Digital in the Asia Pacific region says, “When we sit down with customers, the overwhelming message is that the customers themselves want to go on the digital journey that GE has gone on.

“Our 125-year-old-company is going through a massive transformation. We’re leveraging digital in our factories, in our supply chain, in the equipment we sell. And it’s not just a technology journey, it’s a cultural journey—we’re rethinking the way our company works.”

Here Hagos brings a global view on digital transformation to Australian industries.

You think about farming or animal husbandry and you ask what has this got to do with complex assets and rotating equipment—nothing! But agriculture runs on processes and the same people as in industrial companies—mechanical engineers and business folks—are running these businesses. So you can find a lot of commonalities and figure out how you can apply your learnings.

If you look around the world, the pressure to optimise agriculture is going through the roof. Investment levels are skyrocketing, people are buying farms left, right and centre because of the need to feed a growing population, which is making it palatable to grow the industry. At the same time there are challenges in water—in Australia, water is expensive—challenges in transportation, challenges in all kinds of things. So agriculture is at an inflection point and with that comes the opportunity to say, “Well if you could change the way you do things, could you be more profitable and productive than you are today?”

The timing of digital transformation is sometimes less about the technology and more about the maturity of particular businesses, or the industry cycles that are driving them to do things differently.

In the building space there’s been enough hype about smart cities and smart buildings that companies are all eager. In the States we’ve worked with real-estate-management companies like JLL and CBRE, both of which have made acquisitions of technology companies to help them compete. Their driver is to extend the boom their industry has enjoyed for the past 10 years or so. And in Australia there are opportunities for construction companies such as Mirvac, Lend Lease and Brookfield to streamline processes from conception of a development to occupancy, but also to optimise their use of critical assets such cranes on building sites.

Sustainability, climate change and environmental concerns are accelerating digitisation in different regions at different rates. In Europe, the regulations that are coming in on percentage of global energy usage, consumption of energy, all of these factors are absolutely driving industries to do things differently. They have regulations in the UK now, for example, that force utilities and electricity providers to provide visibility to the homeowners, or to their customers, on how much energy they’re consuming, even all the way down to which assets are consuming what amounts of energy.

It’s profoundly going to change the landscape in the UK. Germany and France are of the same kind of mindset, or even more so. Australia tends to be more progressive than the United States, but probably less than Germany.

Logistics is probably the least understood area. It ranges across industries and across the globe. What we’re doing in aviation and transportation is interesting, moving people and resources, but when I talk about logistics, I mean not just in those areas but in the intersects, the multimodal movement of goods. When you’re moving goods from a ship to a train to a truck to a conveyer belt to someone’s home, there’s an entire lifecycle along that. The interest for us is in those intersects—that’s where the opportunities lie.

At the digital frontier I think overall the push to understand technology from a systems perspective is phenomenally interesting and phenomenally complex. We’re now applying what we know about neuroscience—neural knowledge and neural networks—to data and analytics. Technology is actually imitating nature. So we’re studying the neural networks in our brain and how that whole system works, and trying to emulate that in manmade systems. Even if we can make 1% improvement in terms of our understanding of that, and apply that to the systems we use, it’ll revolutionise everything that we do.

When I came to GE a little over four years ago, GE Digital didn’t exist. But the transformation of the company towards this point where we can apply our digital-industrial learnings to customers outside our traditional industrial playing fields started decades ago. In the early ’80s GE was already moving from becoming an equipment vendor to an equipment and services company, and that laid the foundation for where we’re going now in Digital.

When you think about what we’re doing with our customer service agreements (CSAs), that’s at the core of what everyone is trying to do—use existing assets in a more efficient way. Yes, it’s a technology transformation, but it’s tied up with business-model transformation, and different industries will advance at different rates, depending on the forces driving them.

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