Mark Sheppard is living proof that a CIO can successfully make the move from managing internal IT to taking commercial roles selling technology to the external world.
Last month, he was promoted from his position as CIO at industrial giant, GE – a post he held since 2012 – to ‘digital lead’ across the organisation’s Asia-Pacific operation. Sheppard is now responsible for commercialising software produced by the global conglomerate to customers across the region, which is a big growth market for the organisation.
“We’ve seen GE make quite a transition – we are calling ourselves a digital industrial company and as a business, it has been a significant change for us,” Sheppard, a GE veteran who has spent the bulk of his career with the organisation, tells CIO Australia.
“For a long time in Australia, our largest business was our finance business – GE Money – and over the last couple of years, we have really ramped up the digital industrial side of the business,” he says.
And digital innovation is most certainly at the forefront of what GE – ranked in 2012 as the fourth largest company in the world – is selling to its customer base.
In recent years, GE has invested $1 billion to build a software “centre of excellence” in San Ramon, California after its CEO Jeff Immelt acknowledged the company needed to transition to become a software and analytics organisation. This centre currently employs 1000 staff, which are part of a team of 13,000 software engineers globally.
In 2014, Sheppard pitched to Immelt the idea of creating an innovation centre in Australia, to build GE’s software capabilities outside of the United States. Sheppard tells CIO Australia that although funding had not been received to create a centre here, there’s a 'green light to grow the market as needed'.”
“From a business perspective, we've made a call to start small and grow organically with that,” Sheppard says. “We have a big team in San Ramon, we've got people scattered around, so rather than have a single team, we've got a much more distributed environment with software engineers across the businesses.
“But we will grow the core team in Australia as we need to; it’s a good market here and there's a real entrepreneurial spirit out there. The startup community is also strong, and we see that as something we’d like to tap into,” he says.
GE sees Australia as a credible market with a big opportunity to push its 'industrial internet' wares.
“Resource-based commodity prices are low, costs are high and there’s a real need to drive costs down – a lot of the software solutions that we’ve got really focus on things like asset optimisation. There’s a perfect storm in Australia of having a need and a demand,” he says.
Industrial innovation in the cloud
GE’s innovations are very much predicated on Predix, a cloud-based platform built on Cloud Foundry open source technology, for ingesting, analysing and visualising data. It runs on top of a cloud optimised for heavy duty industrial applications.
“On top of that we are building applications in areas like asset performance management and, overwhelmingly, as we sit down with our customers, that’s where we see the opportunities,” he says.
GE has worked with gas supplier, QGC, to create apps that monitor the condition of gas pipelines on Curtis Island in Queensland.
“We are working with them to create more solutions. We also have a couple of projects on the go with resources companies in the mining space looking at things like optimisation and predictive maintenance [using data gathered from] IoT devices,” he says.
Another project involves analysing data that measures the heat generated by the barrings on the wheels of locomotives that move iron ore. This information can be used to predict whether a train is going to derail.
“A derailment obviously costs a huge amount of money so if you can sense the early warning indicators before that happens, you can have predictive maintenance,” says Sheppard.
“This is cheaper than reactive maintenance. Even before a failure, it’s better to be able to maintain a piece of equipment in a scheduled cycle than pull it out,” he says.
Qantas is also using the company's data analytics solutions to improve flight efficiency and reduce fuel consumption across its fleet of aircraft.
Sheppard says Predix is micro-service based, which means that the architecture is built in such a way that it encourages and ecosystem of developers to create quite granular services.
“So a developer could develop a specific micro-service and ultimately license it for others to use, which is a concept that we really haven’t done before and we see it adding a lot of value in that space,” he says.
“I’ve spoken to a lot of developers, particularly from Australia who have technology around things like data anonymisation and data management, but their market is relatively small here. Their ability to put it into our micro-services catalogue then means that it has got a global reach."
A long stretch at GE
Sheppard joined GE in the United Kingdom in 1995, undertaking strategy and IT roles until 2001 when he relocated to Sydney to manage the IT integration of a newly acquired plastic businesses into GE across the region.
He joined GE Capital as acquisition integration leader in February 2002 before being appointed VP, operations and quality, Australia and New Zealand in March 2003.
Sheppard then became Asia-Pacific chief operation/quality officer in September 2005, a role he held for more than seven years, before becoming Australia and New Zealand CIO at the organisation.
He tells CIO Australia that it wasn’t a conscious decision to spend the bulk of his career at GE. Before landing in the industry he was teaching computer science at Teesside University in England.
“I decided I would come over [to GE] for a couple of years, and my philosophy then changed - I decided to stay while I was still learning and growing. Though I've been in one company, I’ve done quite radically different jobs.
“GE is one of those great places where you are able to flex your career like that. I’ve been here for 20 years, it doesn't feel that long and I never intended to do it, but I have absolutely no regrets.”
GE is constantly reinventing itself which is a key reason why the organisation has been in operation for around 130 years, Sheppard says.
“GE doesn’t look anything like the business it was when I joined. In fact, a good number of the businesses that were around have either been sold or look completely different. When I was in lighting, my team was a supply chain business, we made 15 cent light bulbs and the trick was to sell as many as you could without breaking them.
“Today, we make LEDs, which last a lot longer. So we have a business model which has changed from a supply chain and manufacturing business to a project-based business, which is predicated on things like smart cities – lighting cities by the hour.
Collaboration through hackathons, lessons in coding
GE Australia reaches outside the business for innovative ideas through 'hackathon' events. Last year, the company invited developers to create products that solve challenges in market sectors such as transportation and gas.
“We will run some more hackathons this year. We are also looking at university challenge which I imagine will be something in the power space,” says Sheppard.
“With all the hackathons in Sydney and Melbourne, we picked real world problems, and leaders across the business were also involved so there was an element of reverse mentoring.”
Like many large organisations, GE struggles to find good data scientists, particularly those with an industrial and engineering background who can make sense of data and turn it into practical solutions. GE is working with universities on their curriculum design to try and overcome the shortage of specialists in this area of IT.
“The technology skills shortage is a worldwide problem and we recognise that there is a role for us to play,” says Sheppard.
This year, the company plans to teach 1000 school kids in Australia and Papua New Guinea how to code through its ‘coding for kids’ program. The company ran similar sessions in 2015.
“Just as a trial last year, we asked staff to bring their kids in and we would teach them to code. We ended up teaching a couple of hundred kids and then employees wanted to code.
“To really get the gender balance right, we are [attracting kids] as early as we can to get as many girls as we can interested as well. The youngest we went down to was grade 3 – as soon as kids can read and they can use Scratch, we will try to teach them.”
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