An Open Letter to CIOs: We Can Transform Our Companies (If We Seize the Moment)

We are still in the early days of the digital-industrial transformation. Just 18% of the U.S. economy has digitized. The remaining 82%—which includes almost all industrial companies—is poised to catch up. But it’s going to take the leadership of CIOs to make it happen.

What makes a digital-industrial company different from an industrial company is the ability to connect IT to operations to drive new and often revolutionary real world outcomes, both for the company and its customers.

 Take the manufacturing of rotors—big parts that are central to most of the equipment GE makes. Before digital-industrial, it took months to take a new rotor design from an engineer’s brain to the factory floor. Now it’s possible to have engineers input a new rotor’s 20 or so design specs into a custom web app that does the 3D modeling automatically. The designs can be sent to the factory floor at the press of a button, and the manufacturing process can begin almost immediately. Thanks to IT, what took months now takes minutes.

 The implications of changes like this are earth-shattering, and so are the financial gains.

 My goal at GE is to leverage IT to drive $500 million in productivity gains in 2016, and $1 billion in productivity gains over the next three years. It’s estimated that digital-industrial productivity gains for the entire US economy could add $2.2 trillion to the GDP by 2025. But, again, it’s going to take CIOs to make it happen.

 I believe that driving the digital-industrial transformation forward is capable of fixing America’s productivity problem. While annual productivity growth soared in the late 90s and early 2000s to 4%, it has plummeted to less than 1% today, a low not seen since the early 1980s. Why do we need to make sure that percentage increases? Because boosting productivity is one of the key factors ensuring that our children and grandchildren will be better off than we are, and won’t have to work as hard as we do just to keep what we have today. The surest way to achieve this goal is to put better technology into their hands. And right now, that means making sure transition to digital-industrial unlocks every bit of latent potential it has.

 That’s where we CIOs come in. This is our moment. Many of us have been relegated to back offices by leadership that didn’t see the long-term potential of IT. Many of us have been afraid to raise our hands in meetings even when we clearly saw that our tools could build a better way forward for our companies. That time has to come to an end, because the stakes are too high and the opportunities too big.

 Now is the moment for industrial CIOs, especially, to band together. Our industries are different, but the problems we are trying to solve are the same. More than any other IT specialists, we have the knowledge capital and domain expertise that comes out of long experience with industrial processes.

 These early days of the digital-industrial transformation are when we are free to pull up a chair up to the big table, and be the business leaders that our companies need us to be. We’ve got to become evangelists for what we do. The choices we make in the next few years will determine what shape the remaining 82% of the US economy takes when it realizes the full potential of the tools we have to offer.