Gartner Symposium: GE Capital rethinks strategic supplier policy

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

Financial services business GE Capital is rethinking how it selects 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 the IT function was 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 our mindset, and work with nimbler companies to deliver solutions."

The parent company, GE, has grown through acquisition, which has led to complex IT systems. He said: “We have 2000 systems. 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 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."

He said GE previously focused on building partnerships with major suppliers. "We are very good at managing big vendors, but they are struggling. We now have a more enlightened view of suppliers."

Griffin believes the role of the IT function within business has changed, which means IT needs to think differently about supplier relationship management. He said: "We don't get paid for putting in a new ERP system. It is just assumed to be plumbing. [IT] will be recognised by how we differentiate ourselves."

Griffin expects GE will become a major user of cloud services, because running servers will not be a core competency of IT in the future. He said: "The key advantage for us is 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, users have very elevated needs in terms of what they expect from enterprise IT. "Anything clunky won't work," he said.

The drive in business to commoditise technology means IT needs to reinvent itself. Griffin said: "Our core competency will be user experience, and we need to be clear what we want apps to do. The best apps are single purpose and contextual [in nature]. I can't say that is true of business applications."

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

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

GE Capital has 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 GE Capital's 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.

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