IT recast as digital technology department at GE- Valutrics

GE is in the process of reinventing itself from a big machine manufacturer to a software company, and nowhere is that change more evident than in the IT organization. In fact, information technology no longer exists at GE. Today, IT is known as DT, or digital technology — a change in nomenclature that echoes the company’s seriousness about being a leader in the digital economy.

But becoming a digital technology department has required more than new names and new labels. Jim Fowler, who became CIO at GE in the fall of 2015, described it as a total change in departmental culture. Indeed, the digital technology department is responsible for delivering $1 billion in productivity over a five-year period, a goal that speaks directly to the company’s bottom line.

SearchCIO caught up with Fowler at the recent MIT Sloan CIO Symposium in Cambridge, Mass., where he talked about the departmental culture changes he’s spearheaded, why he calls his staff “productivity makers,” and how reinventing IT has changed the way his department works with the business.

Read excerpts of the interview below, or click on the player to hear the interview in its entirety.

IT doesn’t exist at GE anymore. Your department is now called the digital technology department. How did you help your staff transition from IT to DT?

Jim Fowler: We talk about going from information technology to digital technology, and to some people, it’s just words. But it’s also cultural. One of the things we did this past year is to not only reorganize the entire IT department, but to reorganize around some fundamental changes [that reflect] the way we want to run the function.

The first was to move from a world that was highly outsourced, where we had people who were great at managing contracts and projects, to a world that is highly insourced, where we have hands on keyboards and people that think about product inside the company the same way that we do outside. The only difference is instead of wanting to generate revenue in [operating] profit, we want to generate productivity in cash.

[The second] was to get people out of the mentality of being contract managers and [get them thinking like] product managers, as well as going back to our technology roots. Technology is going to shift the rest of the business. It’s not just a digital technology or an IT functional responsibility. Digital is going to become a part of every job.

The other big change is that we would expect the future leaders of our businesses — our supply chain leaders, our finance leaders — to be farmed out of our digital technology organization. … In fact, my predecessor is now the CEO of our transportation business.

You call your IT staff ‘productivity makers.’ What do you mean Fowler: In the old world of IT, we were project managers that were somewhat back-office order takers. A functional partner would say, ‘I want you to take this process, and I want you to digitize it.’ We had to change that mentality, because the reality is the process and the technology are indistinguishable. In fact, the technology’s going to drive the process — it’s no longer the process that drives the technology.

How receptive were the business partners to this sort of change?

Fowler: Initially, it was hard to get some of the business leaders to want to do this. They were skeptical; they equated everything to long, drawn-out ERP projects. They didn’t know how we could drive this, so we had to get a couple of wins.

We had to pick a couple of people who were more open to us helping them drive change, who were more technically advanced in their thinking. And once we [established] credibility with those first few [projects], it opened up the doors. Of the $730 million in productivity that we delivered last year, the first $20 [million] was the hardest. Once we proved out the $20 [million], the business partners started inviting us to the table to have that conversation.

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