456 Part I: Key System Applications for the Digital Age efficient. Predix's robust data and analytics platform risk-assessment solution combines internal and exter- made it possible for GE to use data across every GE nal factors (such as flooding) to provide an accurate, engine all over the world and cluster fleet data. up-to-the minute visual representation of where risk Predix is starting to provide solutions for GE cus- exists in a pipeline. This risk assessment tool enables tomers. For example, Invenergy LLC, North America's pipeline operators to see how recent events affect their largest independent, privately held renewable energy risk and make real-time decisions about where field provider is implementing GE Asset Performance Man- service crews should be deployed along the pipeline. agement reliability management software on 13 tur- The risk assessment tool visualization and analytics bines at six gas-operated thermal plants in the United capabilities run on Predix. States. The software is based upon Predix and will Weather has a sizable impact on risk for pipelines in perform predictive analytics on turbines that produce areas prone to seismic activity, waterways, and wash- an operating capacity of 3,159 megawatts, enough to outs. Checking weather patterns along thousands of power a half-million homes. The software will help miles of pipe for rain or flood zones, and integrating plant technicians more accurately predict and diagnose those data with other complex pipeline data sets is equipment failures before they occur in order to avoid very difficult to perform manually. But by bringing all unplanned outages. During preliminary testing, the relevant data together in one place, GE gives pipeline system identified a turbine journal bearing experienc- operators easier access to information to help them ing early-stage vibration. A failure could have damaged address areas with the greatest potential impact. the turbine and produced an unplanned outage, but GE expects customers to benefit immediately from Invenergy technicians were able to detect and repair having all of their data integrated. But it wants them to the malfunction three months before it would have be able to do more. In addition to being able to examine occurred. The GE system will also help Invenergy bet- all current risk, pipeline operators would benefit from ter manage its assets to achieve the optimal solution for a "what-if" calculation tool to model hypothetical sce- reducing cost, managing risk and improving availabil- narios, such as assessing the impact of adjusting operat- ity and reliability ing pressures or addressing particular areas of corrosive British oil and gas company BP ple had been using its pipe. GE would give them the tools for a color-coded own software to monitor conditions in its oil wells but view of how those actions affect pipeline risk. decided to get out of the software business and became GE wants to go beyond helping customers manage a GE customer. By the end of 2015, BP equipped 650 the performance of their GE machines to managing the of its thousands of oil wells with GE sensors linked to data on all of the machines in their entire operations Predix. Each well was outfitted with 20 to 30 sensors Many customers use GE equipment alongside of equip- to measure pressure and temperature, transmitting ment from competitors. The customer cares about run- 500,000 data points to the Predix cloud every 15 sec- ning the whole plant, not just GE turbines, for example, onds. BP hopes to use the data to predict well flows and 80 percent of the equipment in these facilities is not and the useful life of each well and ultimately to obtain from GE.If, for example, if an oil and gas customer has an enterprise-wide view of its oil fields' performance. a problem with a turbo compressor, a a heat exchanger GE identified pipeline risk management as a major upstream from that compressor may be the source of challenge for the oil and gas industry. There are 2 mil- the problem, so analyzing data from the turbo com- lion miles of transmission pipe throughout the globe, pressor will only tell part of the story. Customers there moving liquid oil or gas from its point of extraction to fore want GE to analyze non-GE equipment and help refining processing, or market. About 55 percent of them keep their entire plant running. transmission pipeline in the United States was installed If a customer purchases a piece of GE equipment before 1970. Pipeline spills are not frequent, but when such as a gas turbine or aircraft engine, GE often they occur, they cause serious economic and environ enters into a 10-to 15-year contractual services agree mental damage as well as bad publicity for pipeline ment that allows GE to connect to and monitor that operators and energy companies. Pipeline operators machine, perform basic maintenance and diagnostics, are always anxious to know where their next rupture and provide scheduled repairs. GE receives a bonus will be, but they typically lacked the data to measure payment for keeping the equipment running at a pipeline fitness. Operators had no way of integrating specified threshold. GE may now be able to apply multiple sources of data into one place so they could such outcome-based pricing to coverage of non-GE see and understand the risk in their pipelines. machines GE developed a pipeline-management software suite GE CEO Jeffrey Immelt wants GE to become a top for accessing, managing, and integrating critical data 10 software company by 2020. In order to do this, GE for the safe management of pipelines, including a risk needs to sell vast amounts of applications and Predix- assessment tool to monitor aging infrastructure. GE's based analytics. Although few businesses have the Chapter II: Improving Decision Making and Managing Knowledge 457 capital or infrastructure to operate a platform for inte- Sources: Paul Gillin "Industrial lor Revs Up at Big Renewable Energy grating and analyzing their lor data, GE faces compe- Provider." Silico Angle, May 17, 2017, www predlo, accessed May 30, 2017; Laura Winig. "GES Big Bet on Data and Analytics," MIT Sloan tition from many sources. Amazon, Google, IBM, and Management Review. February 2016 www.se.com, accessed May 20, 2017 Microsoft are all getting into Internet of Things plat- Devin Leonard and Rick Clough, "How GE Exorcised the Ghost of Jack Welch to Become a 124-Year-Old Startup. Bloomberg Busineswek, March forms, and dozens of start-ups have similar ambitions. 21, 2016. Holly Lugassy, "GE Leverages Pivotal Cloud Foundry to Build The biggest question is whether other large industrial Predis, First Cloud for Industry." CloudFoundry.org, May 11, 2016 Cliff companies will turn to GE or to another cloud plat- Saran, "GE Predictive Analytics Optimises Irish Power Electricity Pro duction." Comwer Werkly, July 13, 2015. Charles Babcock, "GE Predix form to manage their information. And if you're a Cloud: Industrial Support for Machine Data" information Week, August 6. manufacturer of some size and sophistication, will you 2015, and "GE IT Makes Power Plants 50M More Valuable information Week, September 29, 2015 allow GE to "own" the data on your business, or will you manage and analyze the data yourself? CASE STUDY QUESTIONS 11-13 How is GE changing its business strategy and business model? What is the role of informa- tion technology in GE's business? 11-14 on what business functions and level of deci- sion making is GE focusing? II-15 Describe three kinds of decisions that can be supported using Predix. What is the value to the firm of each of those decisions? Explain. 11-16 To what extent is GE becoming a software company? Explain your answer. 11-17 Do you think GE will become one of the top 10 U.S. software companies? Why or why not? Q1: How is GE changing its business strategy and busines model? What is the role of information technology in GE's business (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q2: On what business functions and level of decision making is GE focusing? (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q3: Describe three kinds of decisions that can be supported using Predix. What is the value to the firm of each of those decisions? Explain. (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q4: To what extent is GE becoming a software company? Explain your answer. (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q5: Do you think GE will become one of the top 10 U.S. software companies? Why or why not? (Points: 1.0) *Please write at least at least 130 words to achieve high marks. 456 Part I: Key System Applications for the Digital Age efficient. Predix's robust data and analytics platform risk-assessment solution combines internal and exter- made it possible for GE to use data across every GE nal factors (such as flooding) to provide an accurate, engine all over the world and cluster fleet data. up-to-the minute visual representation of where risk Predix is starting to provide solutions for GE cus- exists in a pipeline. This risk assessment tool enables tomers. For example, Invenergy LLC, North America's pipeline operators to see how recent events affect their largest independent, privately held renewable energy risk and make real-time decisions about where field provider is implementing GE Asset Performance Man- service crews should be deployed along the pipeline. agement reliability management software on 13 tur- The risk assessment tool visualization and analytics bines at six gas-operated thermal plants in the United capabilities run on Predix. States. The software is based upon Predix and will Weather has a sizable impact on risk for pipelines in perform predictive analytics on turbines that produce areas prone to seismic activity, waterways, and wash- an operating capacity of 3,159 megawatts, enough to outs. Checking weather patterns along thousands of power a half-million homes. The software will help miles of pipe for rain or flood zones, and integrating plant technicians more accurately predict and diagnose those data with other complex pipeline data sets is equipment failures before they occur in order to avoid very difficult to perform manually. But by bringing all unplanned outages. During preliminary testing, the relevant data together in one place, GE gives pipeline system identified a turbine journal bearing experienc- operators easier access to information to help them ing early-stage vibration. A failure could have damaged address areas with the greatest potential impact. the turbine and produced an unplanned outage, but GE expects customers to benefit immediately from Invenergy technicians were able to detect and repair having all of their data integrated. But it wants them to the malfunction three months before it would have be able to do more. In addition to being able to examine occurred. The GE system will also help Invenergy bet- all current risk, pipeline operators would benefit from ter manage its assets to achieve the optimal solution for a "what-if" calculation tool to model hypothetical sce- reducing cost, managing risk and improving availabil- narios, such as assessing the impact of adjusting operat- ity and reliability ing pressures or addressing particular areas of corrosive British oil and gas company BP ple had been using its pipe. GE would give them the tools for a color-coded own software to monitor conditions in its oil wells but view of how those actions affect pipeline risk. decided to get out of the software business and became GE wants to go beyond helping customers manage a GE customer. By the end of 2015, BP equipped 650 the performance of their GE machines to managing the of its thousands of oil wells with GE sensors linked to data on all of the machines in their entire operations Predix. Each well was outfitted with 20 to 30 sensors Many customers use GE equipment alongside of equip- to measure pressure and temperature, transmitting ment from competitors. The customer cares about run- 500,000 data points to the Predix cloud every 15 sec- ning the whole plant, not just GE turbines, for example, onds. BP hopes to use the data to predict well flows and 80 percent of the equipment in these facilities is not and the useful life of each well and ultimately to obtain from GE.If, for example, if an oil and gas customer has an enterprise-wide view of its oil fields' performance. a problem with a turbo compressor, a a heat exchanger GE identified pipeline risk management as a major upstream from that compressor may be the source of challenge for the oil and gas industry. There are 2 mil- the problem, so analyzing data from the turbo com- lion miles of transmission pipe throughout the globe, pressor will only tell part of the story. Customers there moving liquid oil or gas from its point of extraction to fore want GE to analyze non-GE equipment and help refining processing, or market. About 55 percent of them keep their entire plant running. transmission pipeline in the United States was installed If a customer purchases a piece of GE equipment before 1970. Pipeline spills are not frequent, but when such as a gas turbine or aircraft engine, GE often they occur, they cause serious economic and environ enters into a 10-to 15-year contractual services agree mental damage as well as bad publicity for pipeline ment that allows GE to connect to and monitor that operators and energy companies. Pipeline operators machine, perform basic maintenance and diagnostics, are always anxious to know where their next rupture and provide scheduled repairs. GE receives a bonus will be, but they typically lacked the data to measure payment for keeping the equipment running at a pipeline fitness. Operators had no way of integrating specified threshold. GE may now be able to apply multiple sources of data into one place so they could such outcome-based pricing to coverage of non-GE see and understand the risk in their pipelines. machines GE developed a pipeline-management software suite GE CEO Jeffrey Immelt wants GE to become a top for accessing, managing, and integrating critical data 10 software company by 2020. In order to do this, GE for the safe management of pipelines, including a risk needs to sell vast amounts of applications and Predix- assessment tool to monitor aging infrastructure. GE's based analytics. Although few businesses have the Chapter II: Improving Decision Making and Managing Knowledge 457 capital or infrastructure to operate a platform for inte- Sources: Paul Gillin "Industrial lor Revs Up at Big Renewable Energy grating and analyzing their lor data, GE faces compe- Provider." Silico Angle, May 17, 2017, www predlo, accessed May 30, 2017; Laura Winig. "GES Big Bet on Data and Analytics," MIT Sloan tition from many sources. Amazon, Google, IBM, and Management Review. February 2016 www.se.com, accessed May 20, 2017 Microsoft are all getting into Internet of Things plat- Devin Leonard and Rick Clough, "How GE Exorcised the Ghost of Jack Welch to Become a 124-Year-Old Startup. Bloomberg Busineswek, March forms, and dozens of start-ups have similar ambitions. 21, 2016. Holly Lugassy, "GE Leverages Pivotal Cloud Foundry to Build The biggest question is whether other large industrial Predis, First Cloud for Industry." CloudFoundry.org, May 11, 2016 Cliff companies will turn to GE or to another cloud plat- Saran, "GE Predictive Analytics Optimises Irish Power Electricity Pro duction." Comwer Werkly, July 13, 2015. Charles Babcock, "GE Predix form to manage their information. And if you're a Cloud: Industrial Support for Machine Data" information Week, August 6. manufacturer of some size and sophistication, will you 2015, and "GE IT Makes Power Plants 50M More Valuable information Week, September 29, 2015 allow GE to "own" the data on your business, or will you manage and analyze the data yourself? CASE STUDY QUESTIONS 11-13 How is GE changing its business strategy and business model? What is the role of informa- tion technology in GE's business? 11-14 on what business functions and level of deci- sion making is GE focusing? II-15 Describe three kinds of decisions that can be supported using Predix. What is the value to the firm of each of those decisions? Explain. 11-16 To what extent is GE becoming a software company? Explain your answer. 11-17 Do you think GE will become one of the top 10 U.S. software companies? Why or why not? Q1: How is GE changing its business strategy and busines model? What is the role of information technology in GE's business (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q2: On what business functions and level of decision making is GE focusing? (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q3: Describe three kinds of decisions that can be supported using Predix. What is the value to the firm of each of those decisions? Explain. (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q4: To what extent is GE becoming a software company? Explain your answer. (Points: 1.0) *Please write at least at least 130 words to achieve high marks. Q5: Do you think GE will become one of the top 10 U.S. software companies? Why or why not? (Points: 1.0) *Please write at least at least 130 words to achieve high marks