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Digital Transformation Failure at GE
Digital Transformation Failure at GE: Problem, Solution & Learning
Digital Transformation
CMPT 641 (Winter24-10)
University Canada West
Instructor: Jeffrey Ha
Jashanjot Singh
Student ID: 2302042
2
Digital Transformation Failure at GE
ACADEMIC INTEGRITY STATEMENT
I agree that the work in this paper is my own work and that I have given credit to all
sources of information used in my paper by including citations and references in the APA
format. I acknowledge that I am expected to exercise the utmost academic integrity in all
work submitted for this course.
Jashanjot Singh
3
Digital Transformation Failure at GE
Table of Contents
Introduction
..................................................................................................................
4
The Failure of GE's Digital Transformation Initiative
.............................................
5
Problem leading to failure of digital transformation strategy at GE
......................
6
Prime Reason for Failure (My Opinion)
....................................................................
6
Failure’s Impact of Digital Transformation in Large Enterprises
..............................
8
10 Step Solution for Successful Digital Transformation at GE
................................
9
Implementation Roadmap & Key Milestones
.........................................................
12
Phase 1: Planning and Roadmap Development
.......................................................
12
Phase 2: Pilot Projects and Initial Rollouts
..............................................................
13
Phase 3: Full-Scale Implementation
.........................................................................
13
Phase 4: Optimization and Continuous Improvement
.............................................
14
Digital Transformation Assessment Matrix for Agility & Success
........................
15
Justification behind Proposed Digital Transformation Solution
...........................
16
Customization to GE's Scale and Diversity:
............................................................
17
Incorporation of Agility:
..........................................................................................
17
Measurable Outcomes and Continuous Improvement:
............................................
17
Root Cause & Learning from the Failure at GE
.....................................................
18
Conclusion
...................................................................................................................
18
References
...................................................................................................................
20
4
Digital Transformation Failure at GE
Introduction
"Is the titan of the industrial era falling victim to the digital age?" This question forces
business practitioners and managers to study the failure of General Electric’s initiative for
digital transformation. My study is also focused on the reason behind the failure and the
shortcomings in the implementation that occurred at GE. To delve deeper into what happened
at the company during its digital transformation initiative, I went through dear 10K reports
from 2019-2020 and 2021. I also explored some of the online resources available in this
regard to understand the challenges faced by the company and the missteps encountered.
With all the information and knowledge collected through these studies, I could arrive
at a reason why the company failed miserably in its initiative and came up with a solution. I
also devised a structured evaluation matrix of GE's digital transformation efforts. The
proposed solution targets strategic adjustments and operational overhauls in order to realign
GE's digital initiatives with its core competencies and market realities. The assessment
framework developed for this purpose should serve as an important tool and as a guiding
strategy which can steer the company back onto the digital and industrial leadership journey.
The findings of this research help understand and reveal both internal and external
factors that contributed to GE's digital transformation challenges. This paper highlights the
importance of cultural adaptability and strategic coherence. It also teaches us the need for a
balanced approach to innovation and traditional operational excellence. The insights from my
study give a clear picture of GE's journey and teach a valuable lesson to conglomerates who
are navigating the tumultuous waters of digital transformation. The lessons learnt from GE's
experience are important in terms of agility, foresight, and a deep understanding of
organizational strengths and weaknesses. This may help any large organisation in the quest
for digital change management.
5
Digital Transformation Failure at GE
The Failure of GE's Digital Transformation Initiative
In the past, General Electric (GE) represented the might of American industry. The
business started a bold plan to rise to the top of the digital industrial sector. The CEO at the
time, Jeffrey Immelt, oversaw this endeavour. His goal was to revolutionize GE by fusing its
conventional sectors with digital technology. The initiative of GE Digital and a product
named Predix, was the central idea of this endeavour. It was basically a cloud-based platform
which was created to maximize the potential of the Industrial Internet of Things (IIoT). This
concept was completely novel and faced several obstacles, such as the industrial market's
acceptance and preparedness to recognize it as the new norm.
Despite having highly ambitious goals and significant investments, GE's digital
transformation initiative fell short of expectations. The initiative failed to achieve its expected
impact and faced critical challenges. Some of them are listed below:
Strategic Misalignment
: GE's goal for digital transformation was forward-thinking,
but it frequently looked out of sync with the company's fundamental skills and current market
realities. The ambitious plan of becoming a top ten software firm appeared to go beyond GE's
industrial identity and finally led to strategic perplexity.
Execution Challenges
: The company faces several challenges in implementing its
digital plan. From integrating digital services with current industrial products to growing its
new digital platform, It failed to provide a consistent, seamless experience throughout its
digital and industrial market.
Cultural and Organizational Barriers
: The attempt to create a digital-first culture
within an established industrial giant encountered strong resistance. Transformation from
GE's traditional manufacturing operations to its digital aspirations proved more challenging
than it was anticipated. It highlighted the difficulties of transforming organizational culture
and structure at giant companies. (Morgan, 2023)
6
Digital Transformation Failure at GE
Financial Strain
: A huge financial investment was needed to fund the initiative at
GE. It was surprising to note that GE was already facing pressure on its financial
performance at that time. The costs associated with developing digital capabilities, that too
with slower-than-expected returns, increased the company's financial challenges.
Market and Competitive Pressures
: As GE started its digital transformation
initiative, it faced stiff competition from both established technology firms and young start-
ups. These competitors often have a clear digital focus or more agile approaches to
innovation. The condition made it difficult for GE to secure a dominant position in the digital
industrial market.
Problem leading to failure of digital transformation strategy at GE
I believe that the varied and diverse operations at GE, coupled with an ill-researched
implementation strategy, were the prime reasons behind the failure of the digital
transformation initiative at GE. This opinion is rooted in the complexity of managing and
transforming a conglomerate with extensive global operations and competitive environments
that demand continuous innovation and adaptation.
Prime Reason for Failure (My Opinion)
I found that the vast diversity in GE's operations and the lack of a well-researched,
cohesive digital transformation strategy were pivotal to the initiative's failure. GE operates in
over 170 countries, with 94 manufacturing plants in the United States and Puerto Rico and
190 manufacturing plants in 37 other countries. This global footprint and the scale of
operations in various sectors, including Power, Renewable Energy, Aviation, Healthcare, and
Capital, add layers of complexity to any company-wide change efforts.
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