Gartner Symposium: GE Capital reassesses supplier strategy

Financial services business GE Capital, is rethink its strategy for selecting strategic suppliers, in a bid to boost innovation within IT

Speaking at a seminar at the Gartner Symposium in Barcelona. Kevin Griffin CIO GE Capital said that the IT function is on a journey to simplify the systems it runs and supports.

He said GE Capital was using the ideas behind the Lean Startup methodology to determine what constitutes a minimum viable product. “Partnering is key. We have to change mindset,and work with  nimbler companies to deliver solutions.”

The parent company, GE, has grown through acquisition, which meant that IT grew in complexity. He said: “We have 2000 system. Where it makes sense we want to make IT simpler

Simplicity means fewer moving parts so GE is consolidating its datacentres from 50 to 10. It also has an aggressive timescale to cut the number of ERP systems and is in the process of consolidating 350 ERP systems down to 50. The company operates thousands of of servers and a complex middleware stack which must all be simplified, he said.

Speaking on how the company innovates, he said that in 2000, during the dotcom bubble, innovation simply involved putting a group of people together to build a website. Such websites were far less functional than what is expected today. “Today we need to partner with thought leaders to innovate because[IT] is not outward facing.”

While he admits that GE would have previously focused on building partnerships ith the strategic suppliers, he said: “We are very good at managing big vendors, but they are struggle. We now have a more enlightened view of suppliers.”

Griffin believes the role of the IT function within business has changed. He said: “We don't get paid for putting in anew ERP. It is just assumed to be plumbing. [IT] will be recognised by how we differentiate ourselves.”

Griffin expected the company to become a major user of cloud services, because running servers would not be a core competency of IT in the future. He said: “There is no competitive advantage of ERP any more. The key advantage for us is the data.”

So the company is pulling in smaller firms to partner with, such as Good Technology for its mobile strategy, and is co-investing in technology development where appropriate.

Rather than focusing on building complex enterprise applications, he said IT needs to appreciate that thanks to the likes of Apple, end users have very elevated needs of what they expect from enterprise IT. “Anything clunk won't work,” he said.

Griffin warned that here is a drive in business to commoditise IT. “Our core competency will be user experience, and we need to be clear what we want apps to do. The best are single purpose and contextual. I can't say that is true of business application.

He expects these empirical apps will communicate with each other using data flows.

We don't have the sills will need lots of enterrpise application and have data flows, not all but perhaps 40%.

Among the apps GE Capital has built is a front-end iPad app for Salesforce.com, that integrates geospatial data, allowing a mobile sales rep to see which customers need attention and their location.

GE Capital ha also developed an app for its  fleet business, which helps customers find a garage if their company car breaks down, or the windscreen breaks.

In our equipment leasing business he said GE Capital developed an app that calculates financing cost and links to the backend system to give the user a decision instantly.