Ge Health And Social Care Case Study Essay
56 ● Module I / Foundation Concepts
REAL WORLD
CASE
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2
GE Energy and GE Healthcare: Using Information Technology to Create Strategic Customer Relationships efficient network-enabled remote servicing, can charge $500 to $600 per hour for the same technician. Even more important, the information generated by its continual monitoring allows GE to take on additional tasks, such as managing a customer’s spare parts inventory or providing the customer’s and GE’s service and support personnel with complete access to unified data and knowledge about the status of the equipment. Customers now look to GE not just for high-quality energy equipment but also for help in optimizing their ability to supply consistent and high-quality power …show more content…
This has allowed GE to tie its pricing to the business benefits it provides (“power by the hour”), for instance, rather than the products themselves. The same kinds of economics are at work at GE Healthcare. Its typical customer is a medical radiology clinic in the market for a new MRI (magnetic resonance imaging) machine. But these customers have not purchased such machines in years. Given the rapidly obsolescent technology involved and the quirks of hospital finances, they’ve tended to lease the machines. Now even conventional leasing has gone by the wayside as companies like GE offer to install the equipment at no up-front cost, and instead charge for its ongoing upkeep and use. Think, for example, of all the activities associated with the life cycle of an MRI scanner: 1. Determining requirements and whether having a scanner is justified 2. Financing the scanner 3. Installing the scanner 4. Testing, calibrating, and validating the scanner 5. Maintaining and replacing parts 6. Replenishing materials (gases and imaging media) 7. Training personnel to use the scanner 8. Determining a patient’s need …show more content…
Again, the company can make such estimates because of its investment in information technology for network monitoring, diagnostics, and data analysis of the use of its products at customer sites throughout the world. Not long ago, we met with managers in GE’s industrial capital equipment leasing division. These are the people responsible for those leased trailers you find at practically every construction site on earth. We were incredulous when we heard how much self-awareness the trailers have; even down to the number of times a particular door or window is opened in a given period. Why collect data on such seemingly minor events in the life of each trailer? “Because,” we were told, “the business is actuarial science now.”
Source: Adapted from Glen Allmendinger and Ralph Lombreglia, “Four Strategies for the Age of Smart Services,” Harvard Business Review, October 2005, and Peter Weill and Sinan Aral, “Generating Premium Returns on Your IT Investments,” MIT Sloan Management Review, Winter 2006.
CASE STUDY
REAL WORLD
CASE
W
2
GE Energy and GE Healthcare: Using Information Technology to Create Strategic Customer Relationships efficient network-enabled remote servicing, can charge $500 to $600 per hour for the same technician. Even more important, the information generated by its continual monitoring allows GE to take on additional tasks, such as managing a customer’s spare parts inventory or providing the customer’s and GE’s service and support personnel with complete access to unified data and knowledge about the status of the equipment. Customers now look to GE not just for high-quality energy equipment but also for help in optimizing their ability to supply consistent and high-quality power …show more content…
This has allowed GE to tie its pricing to the business benefits it provides (“power by the hour”), for instance, rather than the products themselves. The same kinds of economics are at work at GE Healthcare. Its typical customer is a medical radiology clinic in the market for a new MRI (magnetic resonance imaging) machine. But these customers have not purchased such machines in years. Given the rapidly obsolescent technology involved and the quirks of hospital finances, they’ve tended to lease the machines. Now even conventional leasing has gone by the wayside as companies like GE offer to install the equipment at no up-front cost, and instead charge for its ongoing upkeep and use. Think, for example, of all the activities associated with the life cycle of an MRI scanner: 1. Determining requirements and whether having a scanner is justified 2. Financing the scanner 3. Installing the scanner 4. Testing, calibrating, and validating the scanner 5. Maintaining and replacing parts 6. Replenishing materials (gases and imaging media) 7. Training personnel to use the scanner 8. Determining a patient’s need …show more content…
Again, the company can make such estimates because of its investment in information technology for network monitoring, diagnostics, and data analysis of the use of its products at customer sites throughout the world. Not long ago, we met with managers in GE’s industrial capital equipment leasing division. These are the people responsible for those leased trailers you find at practically every construction site on earth. We were incredulous when we heard how much self-awareness the trailers have; even down to the number of times a particular door or window is opened in a given period. Why collect data on such seemingly minor events in the life of each trailer? “Because,” we were told, “the business is actuarial science now.”
Source: Adapted from Glen Allmendinger and Ralph Lombreglia, “Four Strategies for the Age of Smart Services,” Harvard Business Review, October 2005, and Peter Weill and Sinan Aral, “Generating Premium Returns on Your IT Investments,” MIT Sloan Management Review, Winter 2006.
CASE STUDY