Capitol University Graduate School Department Cagayan De Oro City Report on Management 313 Title: GE’s Move to the

Internet Reporter: Sol Erwin Diaz, Ph.D.-1 John F. Welch – General Electric Company CEO – he proved to navigate the treacherous waters of the internet economy. (Dilemma) At the beginning of 1999, new zealots wondered aloud whether Welch’s staunch refusal to grant special equity deals for technology talent signaled that he was past his prime, a prisoner of old economy thinking. Boca Raton, Florida (January 1999) – during a management meeting, Welch outlined a sweeping Internet agenda that that would leave no GE businesses untouched. He added e-business to a short list of broad initiatives including globalization, customer service, and a quality control yardstick called Six Sigma – that each manager would be responsible for carrying out. • • The internet was no longer just a new medium for buying and selling, he said; it was fundamentally changing how business operated. The result was new buying, selling, and manufacturing techniques that spread through the massive company in weeks, not years. Full-time internet connections were letting GE remotely monitor heavy equipment – and tell customers how they could be working more efficiently. Wall Street was treating GE as both a blue chip and an internet company, sending stock higher when one or the other was in style. GE’s stock price doubled within a year and a half after Welch’s edict was handed down. The revelation is that the internet is primarily a productivity tool, and secondarily a selling and procurement tool. They’re using the internet to eliminate paperwork and run operations a lot more efficiently. In the middle of 2000, GE expected to slash overhead costs by as much as 50 percent- which would amount to a staggering $10 Billion – in as little as two years.

LICENSE TO STEAL  It turns out that all the work that GE did to break down the bureaucracy and create a culture of sharing was wonderful preparation for e-commerce

It kept track of the patients examined by the equipment and fed the data back to the customer. BIDDING FOR DOLLARS  E-auction application (December 1999)  E-purchasing (March 2000) E-BUSINESS GENESIS 1994 – GE’s Plastics unit was distributing technical documentation over the web on a site called Polymerland. GE is now moving towards multi-lingual web sites as it expands its web based operations beyond its US home base into Europe and elsewhere. E-business leaders held monthly interactive teleconferences. place and track orders and to order spare parts. Work on the culture so that people are proud to take ideas from others.  Turbine Optimizer – counterpart to iCenter in Power System. with suppliers offering bids in response to requests made by GE for quotations. mold a digital representation of a custom-designed product. selling. customer care. and which enable customers to obtain prices. E-business within GE is driven by an e-business strategy and there is a focus on dealing with technology. Buy-side activities have focused on moving suppliers to on-line purchasing systems. referred to within GE as Buy-side. setting up electronic commerce sites for its customers. and fulfillment. DATA FOR SALE  iCenter – relied on a direct Web connection to equipment operating at a customer’s site. GENERAL ELECTRIC . GE has made a significant investment in sell-side activities. 1999 – Welch was praising that site as an example of what the rest of the company should emulate. and even get cost estimates for materials on the web. as much as those who came up with the idea to begin with. using PC emulators to demonstrate new Internet applications for buying. logistics. Achieving business benefits is the main driving force behind GE's investments in the Internet. manufacturing. organization and people issues. and have delivered significant cost savings for GE. Coordinate e-business endeavors among GE’s 20 far-flung units. • • . manufacturing and demand side aspects. They met in person quarterly. Make-side and Sell-side respectively.THE INTERNET IN A GLOBAL DIVERSIFIED COMPANY • • GE's approach to e-business involves addressing supply side.  Give great praise to those who have copied from others. 2000 – GE pioneered customer support tools called the Wizard – let product engineers select materials and colors for plastics pellets. This has involved establishing web sites that provide information. Activities within GE in this area date back to 1995. in collaboration with other Internet technology and service providers.• • GE is also using the Internet (in the form of an Intranet) internally to improve communications and to share knowledge and experiences.html) . It is using its expertise and experience. GE is not only user of Internet technology and services. to deliver Internet related business services to its customers. (http://www.

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