Job responsibilities: Information technology, Lean Six Sigma and Sourcing
"Our job is to leverage the scale of a $180 billion company rather than several individual businesses by aggregating our demand and then negotiating in as many cases as possible as one company rather than several individual companies."
"Good sourcing is information. On indirect sourcing it's knowing what we buy, which is a challenge in itself; aggregating that; and then making sure that our businesses are leveraging the negotiations we've done because they tend to be better deals than those done individually. On the indirect side, that's a very big deal. On the direct side, we were one of the first to do e-auctioning. Our job would be to commoditize the item as much as possible and then leverage IT to have our supplier to bid for the business."
An Example:
"We buy about $150 milion of personal computers a year, laptops and desktops, and we've selected one supplier companywide. As you might imagine, we have a great relationship with our supplier, but also a very low price."
"We auction about 30% of our total buy. We spend a lot of time upfront communicating with our potential suppliers, so we've agreed on delivery requirements, on the specs that we want, on the quantity that we need, and then the only thing remaining is price, and that's what the auction is all about. And to maintain the integrity of the auction, we commit that if you agree to everything we've communicated, and you win the auction, you get the business."
Six Sigma initiatives:
"We've been aggressively trying to migrate away from talking about tools and instead to talking about outcomes. Six Sigma is a tool. It is a wonderful tool, but it is a tool. What we've been talking more about as a company is outcomes, and the two outcomes we really want are product reliability and customer responsiveness.
So we start with that and work our way back to what tools are needed to make that happen. For product reliability, the Six Sigma tools are sensational. On the responsiveness side, it's often less about using Six Sigma and more about getting the right people in the room to map out how long it takes for us to do something in front of customers and, using mostly common sense, take out those things that get in the way of meeting our customer needs responsibly."
Example:
"In our GE Money business we offer private-label finance to retailers. We are the financing behind jewelry stores and pharmacies and the like. Sad to say, it was taking 63 days from when a retailer contacted us saying it wanted to consider using us a private-label financier until it could conduct the first transaction with our financing. No one had calculated this before we went on this journey.
We did a number of what we call lean workouts, where we get everybody in the room to map out the process, and they got it down from 63 days to one day. The leader of that business was able to go out and have as his marketing campaign, "Enroll today. Transact tomorrow." We we did that, sales doubled. And there are 30 examples of that throughout the company."
Professional Networking capability:
"We've gone out of our way to call it professional networking rather than social networking. We've been building a professional-networking capability that allows everybody to put in the organization directory the skills that they bring to bear. It's very searchable, so if someone is looking for a particular skill, they can go to that site. That gets about 25 million hits a day, so it really is becoming sort of a heartbeat of the company."
Coming technology changes:
"Over the next five years there will be a distinct change in the man-machine interface. We've all grown up with the keyboards and mice, but I'd be surprised if five years from now we didn't all interact with our computers via multitouch gestures. A number of companies are coming out with the ability to use your hands directly on screen. If you want a keyboard, you just click something, and right on the screen is the keyboard, as well as the equivalent of managing all the image on there instead of using a mouse. That's going to be a big change.
Another big change is going to be OLED, organic light emitting diodes, which are extremely thin screens that will start out as TVs but will quickly become available as computers. They have better resolution than either LCD or plasma, and they're so thin that you'll be able to roll them up or fold them up and carry them. This will happen within the next five or six years. You'll be carrying around this screen, you roll it out, and it's got multitouch capability, and that's all you'll need.
Something that has already grown dramatically but will continue to grow even more and ultimately become core to enterprises, as well as consumers, is what's known as cloud computing - having all the applications centrally located. If you ask what percent of the documents you create are just for you, it's almost zero. Almost every document you create is for collaboration in one way, shape, or form. So why not start by building it on the web and providing permission to people that you expect to view it and edit it and leverage it? So I think that's going to be a big change over the next few years as well."
Source: C-Suite Strategies. The Colvin Interview. "Information Worth Billions - General Electric's CIO, one of the world's most influential, tells how he makes infotech pay in a big way." Fortune, July 21, 2008: pp. 73-78.