A few years ago, on a flight in India I did a back-of-the -envelope calculation and told my client traveling with me "If you could be like GE you could drop $ 1 billion to your bottom line each year". Every tech and BPO vendor we visited on that trip had a GE unit listed somewhere on its customer list or conference room. In India, in Mexico, in E. Europe, in China GE has done a masterful job working with waves of low-cost country outsourcers and captive units. And there was little angst about it - given how global GE business is and how much it exports, its tough to criticize GE about being "unpatriotic" about its global sourcing. The icing on the cake - GE took equity positions in many and added that payback to its cost savings. They were disciplined about it - unit CIOs had bonuses tied to specific metrics on usage of those low-cost providers. And I mean waves of such suppliers - the early ones included Infosys and Wipro which decided in the late 90s GE business was not profitable, but in a honest moment would acknowledge GE had validated them for a number of other customers and had disciplined their operations with its anal Six Sigma and other process excellence initiatives.
A few years from now, I have a feeling I will be telling some other client "If you could be like GE...you could drop a billion to your bottom line through aggressive use of SaaS and clouds".
At the Office 2.0 conference, Dr. Sukh Grewal presented on their SupportCentral initiative - and he later told me about the role GE saw for SaaS vendors like Zoho. GE also recently announced plans to use Aravo for a role in managing 500,000 suppliers.
Don't get me wrong - its SaaS and clouds are still at the edges. GE continues with several on-premise implementations around Siebel and Oracle. And Microsoft still dominates their desktop. But GE has shown it is not afraid to try out smaller vendors (and invest in them to get the upside if they take off) and has enough internal pulleys and levers to make sure its vast network of business units fall in alignment and adopt on a widespread basis when it makes business sense.
I once asked a Big 5 accounting firm alumnus at GE if his alma mater got invited to any of his services business. He gave me an incredulous look "My low-cost country options could fxxx up 5 times, and I would still be ahead"
If you are an incumbent tech vendor, that should be sobering. GE can shut the
door as tight to its incumbents as it can open them to newer vendors. And what GE does gets discussed on airline napkins around the world.
