Chapter 3 case study 

1: GE

1. What does Immelt mean by the “digitization of the industrial world” and “the industrial
Internet?” What are the four central elements of the industrial Internet?
Digitalization of the industrial world: nowadays everything generates data. The industrial
companies are in the information business whether they want it or not.

2. What were the three alternatives GE had for developing the hardware and software
capabilities to become a digital firm?
Acquisition/ build with a partner/ build on their own/

3. Which option for developing its digital capabilities did GE choose and why?
GE choose to develop its own digital capabilities because they did not have enough information
to make the good acquisition. They also felt like it would be better to make it themselves so that
they would create a tailored solution that would fit the company perfectly.

4. Why does the new GE want to treat analytics as a company expertise just as it has always
treated material science?
Because analytics are just as important.

5. What example does Immelt use to illustrate the value of digital knowledge to GE customers?
That 1-mile difference in the locomotive number of miles per hour can generate 250 million
dollars of annual profit.

6. What does Immelt mean when he says GE will become a “platform” and “app” company?
The initiative is generating around 500 million dollars of productivity, and they want to push it
back to the company they also want their own internal company (digital thread)
7. Why does Immelt believe GE will need to hire thousands of new people to achieve its
goals of becoming a digital firm?

Because they have to bring different backgrounds, give them the appropriate training and mix
them together to get to the goal quickly and more efficiently.

8. What is the “culture of simplification” that Immelt believes is needed at GE?

The culture was too complicated. Fewer layers and processes were needed. Embraced some of
the Silicon Vallet approaches.