This article relates to chapter 13 with respect to six sigma and total quality management in the world of information technology. The CEO of GE turned to the leader of the company’s Six Sigma quality-improvement project when he decided that GE needs to totally become an e-business. There was a tough transition program across 36 GE business units with an overall $7 billion in online transactions in the previous year, and now $1.5 billion was looking to be saved on streamlined internal processes. According to the CEO, GE was frightened after witnessing a dramatic change in the brokerage industry, so it decided to launch a Destroy Your Business initiative to find out how the internet would destroy its business. An e-commerce leader was appointed in each business unit to spend six to eight months studying issues and reporting back to the CEO. After looking closely at its dot-com competitors, it found that mostly websites posed a threat. The business models were not good and people still needed to go to the manufacturer to pick up parts. The tools these other companies were using, however, showed some potential to help out GE. The major tips given for GE’s e-business push were to focus on the sell side, make sure the company grows as much as possible from the online channel, and to add value to the customers so they will have a reason to transact electronically. Internal productivity is also key. Major challenges included migrating customers. GE decided to allow them to have their workflow for purchasing online, which translates to increased productivity. In the firm, it was difficult to shut down parallel processes, or other ways of conducting business not online. GE had a big initiative to get more deflation by asking suppliers to go through auctions online to bid for it. This did not introduce much opposition on behalf of the suppliers, largely because it helps eliminate the need to travel for negotiations for a contract, and communication is considerably faster. GE employees have been forced to work differently due to the elimination of options (travel reservations can only be done through the company’s website for example). The last piece of advice granted to other companies trying to become e-businesses is to achieve complete company commitment towards the goal. One department cannot drive it, top management needs to implement the ideas of quality and six sigma.
Reference:
Q&A: Gary Reiner. (2001). Retrieved from PC Magazine on May 26, 2009.
Website: http://www.pcmag.com/article2/0,2817,33527,00.asp
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I always like GE as a company because of its innovation. There are a lot of potentials in E-Commerce and it is a good investment to transform its business. The economy is so tough nowadays, most company main focus now is to cut cost and stay afloat so it is refreshing to hear that there are companies out there still looking to invest in the future and be ahead of competitors.
ReplyDeleteI liked the last point you made. I think it is so important for companies to implement new technologies from management down. Employees, especially ones who have been with the company along time need to understand the importance of innovation. People cannot be forced into changing their ways unless they have a clear explanation and the motivation to learn new things. I think a lot of companies go about bringing in new technologies the wrong way and employees end up rebelling causing less efficiency throughout the company.
ReplyDeleteI think GE will greatly benefit from their e-commerce initiatives. It will help their productivity and reduce their expenses. In working with the Government, we are constantly having to learn a new IT system that will help alleviate our expenses. We have a new project mangement tool that is accessible from a Web browser on the intranet. Although, we have encountered some reluctance to use the system, it provides management with visibility of our projects. Similarly, I think GE will become a more efficient company using more innovative e-commerce technologies in our present economic situation. It's the only way a company can survive.
ReplyDeleteI think the idea to run the program of destroy your business was a good idea because they that way they got an idea of what to expect and where to focus. Since they did that 6-8 month program they now know exactly how to infiltrate the E-business world.
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