General Electric
Mini Case Study
Can GE Remake Itself as a Digital Firm? General Electric (GE) is the world 's largest diversified manufacturer. Fortune named GE "America 's Most Admired Company" in 1998, 1999, and 2000. Jack Welch, GE 's CEO and Chairman since 1981, is often cited as the most admired CEO in the United States. Headquartered in Fairfield, Connecticut, the company consists of 20 units, including Appliances, Broadcasting (NBC), Capital, Medical Systems, and Transportation Systems. With the acquisition of Honeywell, announced in October 2000, GE became a company of $155 billion in revenue and 460,000 employees in 100 countries. Despite GE 's size and old-economy businesses, Internet Week awarded GE its e-Business company of 2000. Did GE transform itself into a digital firm? At a January 1999 meeting of 500 top GE executives in Boca Raton, Florida, Welch announced a new initiative to turn GE into an Internet company. Earlier initiatives transformed GE and are partially responsible for its phenomenal rise in profit over the past two decades. Those initiatives were globalization of GE in the late 1980s, "products plus service" in 1995 which placed emphasis upon customer service, and Six Sigma in 1996, a quality program that mandated GE units to use feedback from customers as the center of the program. Welch announced that the Internet "will forever change the way business is done. It will change every relationship, between our businesses, between our customers, between our suppliers. By Internet-enabling its business processes, GE could reduce overhead costs by half, saving as much as $10 billion in the first two years. Gary Reiner, GE 's corporate CIO, later explained "We are Web-enabling nearly all of the [purchasing] negotiations process, and we are targeting 100 percent of our transactions on the buy side being done electronically." On the sell side Reiner also wanted to automate as much as possible, including providing customer service and order taking. GE had
Can GE Remake Itself as a Digital Firm? General Electric (GE) is the world 's largest diversified manufacturer. Fortune named GE "America 's Most Admired Company" in 1998, 1999, and 2000. Jack Welch, GE 's CEO and Chairman since 1981, is often cited as the most admired CEO in the United States. Headquartered in Fairfield, Connecticut, the company consists of 20 units, including Appliances, Broadcasting (NBC), Capital, Medical Systems, and Transportation Systems. With the acquisition of Honeywell, announced in October 2000, GE became a company of $155 billion in revenue and 460,000 employees in 100 countries. Despite GE 's size and old-economy businesses, Internet Week awarded GE its e-Business company of 2000. Did GE transform itself into a digital firm? At a January 1999 meeting of 500 top GE executives in Boca Raton, Florida, Welch announced a new initiative to turn GE into an Internet company. Earlier initiatives transformed GE and are partially responsible for its phenomenal rise in profit over the past two decades. Those initiatives were globalization of GE in the late 1980s, "products plus service" in 1995 which placed emphasis upon customer service, and Six Sigma in 1996, a quality program that mandated GE units to use feedback from customers as the center of the program. Welch announced that the Internet "will forever change the way business is done. It will change every relationship, between our businesses, between our customers, between our suppliers. By Internet-enabling its business processes, GE could reduce overhead costs by half, saving as much as $10 billion in the first two years. Gary Reiner, GE 's corporate CIO, later explained "We are Web-enabling nearly all of the [purchasing] negotiations process, and we are targeting 100 percent of our transactions on the buy side being done electronically." On the sell side Reiner also wanted to automate as much as possible, including providing customer service and order taking. GE had