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BEST PRACTICES RESEARCH

© Frost & Sullivan 2015 1 “We Accelerate Growth”



Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Application Convergence Impact and Customer Impact ............................................. 3

Best Practice Visual .............................................................................................. 7

Conclusion........................................................................................................... 7

Significance of Growth Excellence through Application Convergence ................................. 8

Understanding Growth Excellence through Application Convergence ................................. 8

Key Benchmarking Criteria .................................................................................... 9

Best Practice Award Analysis for GE Predix .................................................................... 9

Decision Support Scorecard ................................................................................... 9

Application Convergence Impact .......................................................................... 10

Customer Impact ............................................................................................... 10

Decision Support Matrix ...................................................................................... 11

The Intersection between 360-Degree Research and Best Practices Awards ..................... 12

Research Methodology ........................................................................................ 12

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 13

About Frost & Sullivan .............................................................................................. 14



Background and Company Performance Industry Challenges

A new form of industrial revolution is currently being experienced: the shift from

traditional analogous operations to digitalized processes. As industries find themselves at

the cusp of this digital makeover, they must seek answers to the challenges they face in

this constantly changing business environment.

As all industries depend on fixed and variable resources to function, directly or indirectly

they are impacted by the volatility of the prices of these resources. While a fall in prices

may be detrimental to the business of oil and gas companies, it is a boon for consumers.

It, however, remains a challenge for companies to align their operations with the

fluctuating nature of prices.

As an enterprise becomes increasingly digitalized, large amounts of data are generated

across the operations. However, as these operations are often disparate, Frost & Sullivan

points out that the data thus generated is siloed and not integrated. As such, creating

holistic insights significantly becomes a challenge as the data is incongruent. The aspect of

siloed data collection, data transparency, integration and visualization makes analytics a

complex process.

Another challenge faced by companies is the increasing vulnerability of data. As more and

more devices and machines get connected, each becomes a point of vulnerability.

Cybersecurity is a growing concern for digitalizing industries, especially due to the

sensitive nature of the data generated. Ensuring the safety of software platforms and

applications to enable secure operations, while saving on money, time, and resources,

remains a daunting task ahead of the complete digitalization of enterprises.

Application Convergence Impact and Customer Impact

Completeness of Vision

Companies and industries embracing digitalization are increasingly moving towards the

vision of a totally integrated digital enterprise. To achieve this vision, Frost & Sullivan

notes that companies must look at ways to incorporate not only the Internet of Things

(IoT), but also connect machines and people through a common platform.

GE’s software platform – Predix - provides industries with an innovative software

technology platform that optimizes industrial processes, assets, and operations. Predix

can be deployed on machines, in situ or in cloud, to connect the devices and machines on

the floor. Apart from device integration, data assimilation and management, data

analytics, and mobility are also provided with the help of the same platform. Predix



connects machines with people and generates insights based on the data created through

the enterprise. The platform supports the development of cloud-based analytics

applications that take into consideration the operational data to generate targeted action

points for better decision-making.

Frost & Sullivan appreciates the fact that a major challenge overcome by GE Predix is the

integration of disparate data sources. Predix brings together the operational technology

end of the business and the information technology end. This marriage of formerly distinct

ends of the spectrum creates synergies that impact the complete organizational structure

through insights that can be generated with it. Applications like SCADA, PLC, and

Gateways from the operational end of the enterprise are brought in conjunction with

supply chain management, enterprise resource planning, and other such applications from

the traditional information technology domain.

The scale of the Predix platform extends across a spectrum of industry verticals ranging

from power, transmission, smart cities, healthcare, manufacturing, aviation,

transportation, energy management and oil and gas. GE also pioneered the development

of platform-based approach in the market to drive an integrated ecosystem of industry-

specific applications. The organization aims to deliver secure connected assets and total

data management and to drive the flexibility of mobile and cloud solutions. The ability to

merge the platform effectiveness to create an integrated responsive enterprise properly

reflects on the platform’s superior capabilities. The convergence of social, mobile, cloud,

big data, machines and applications, all enabled by Predix, results in improved operational

and asset efficiencies, while reducing the downtime and driving profitability.

Growth Potential

Industries (oil and gas, power, mining, etc.) are progressively transforming and adopting

digital technologies. End-users who are progressive in nature are looking at cloud-

based/hosted/hybrid data models to leverage the best synergies of both worlds. However,

the degree of market adoption is still low. As industrial processes are yet to be completely

digitalized, there is a significant growth potential for software processes that enable the

digitalization. GE’s cross-industry experience and the capability to understand the

requirement of industries to be able to connect a wide variety of machines, sensors,

systems, processes, devices, and personnel instills a sense of confidence in the end-users

mind as a trusted partner. Furthermore, Predix’s ecosystem partners (Intel, AT&T, Cisco,

among others) have all developed several cutting-edge hardware solutions to drive

incremental value to customers.

As the transformation of industries is an ongoing process, Predix takes into account older

machines that may still be a part of the operation, along with newer, sophisticated

machinery. The platform thus enables the connection of all machines in the domain, old

and new, on a large industrial scale through its various applications that synthesize

protocols to procure the data from the devices - irrespective of their age or make. Predix’s



hardware agnostic software platform enables it to be applied across industries, thereby

offering immense growth potential for the platform in the industrial IoT sector.

GE's vision is to truly build an industrial application ecosystem of the future. The company

is inviting system integrators and value-added resellers to build applications on its

platform and open up a collaborative innovation system. Instead of being constrained by

internal development, GE Predix is looking to leverage global experts in the field and

develop cutting-edge solutions for emerging customer challenges. A case in point is that of

SoftBank licensing the GE Predix platform to leverage the extensibility of the platform and

subsequently build out industry-class applications.

Disruptive Capability of the Application

The digitalization drive is rapidly becoming a competitive edge for companies as they

increasingly invest in the adoption of software platforms. GE Predix has enabled

technology disruption in the industry with its innovative software platform that supports

hardware agnostically. Predix is bringing about the revolution in the industrial IoT by

allowing applications to converge all of the elements of an enterprise in a single platform.

With more than 40 applications already released by GE using the Predix platform in 2015,

the disruption of technology used traditionally by industries has gained significant traction.

Unlike its other competitors, Predix enables the convergence of the infrastructural and

digital domains, viewed as the new core competency by industries. The application of

Predix in industries is bringing about a true disruption in technology by enabling newer

ways of operating machines. For example, the application of Predix to a digital wind farm

allows the operators to alter the angle of the blades in real time, adding up to 10% in

energy output and drive significant value-delivery to a wind farm in the scale of 100

megawatts. Predix has been implemented by leading companies and cities such as

TransCanada, Impala Platinum, AirAsia, San Diego and Israel National Water Company as

part of its customer portfolio. In addition, GE Predix has been implemented in over 200+

Electrical Submersible Pumps (ESP) wells to drive reduction in performance variability by

using its analytics platform.

Recently, GE Predix introduced its purpose-built ‘Predix Cloud’ specifically for industrial

data and analytics across several industries. The cloud’s unique differentiation is fivefold:

1. Specifically built to accommodate scale for industrial assets. The Predix Cloud builds on

best-in-class partnerships with Intel, Pivotal, Cisco, AT&T, Vodafone, and Softbank.

2. The offering of a Platform-as-a-service (PaaS) analyzes and stores data in real-time

with a closed-community secure model.

3. Easy to access through on-demand and pay-as-you-use pricing models.

4. Platform agnosticity helps in working across a wide range of industries and industry-

specific applications.

5. Rapid data and service provisioning. This is quite critical to operations, as companies

compete on speed of service and scale.



To address security concerns, applications are monitored and reviewed in isolation before

implementation to reduce extent of damage. Furthermore, GE has incorporated ‘software-

defined mortar’, which isolates each application layer to customize the amount of data

that each layer can access. This ensures a differentiated approach in threat detection,

isolation and data loss prevention.

Business Value to Customers

Industrial data can be challenging to handle, given the scale of enterprise and the large

volume of data generated. GE Predix clearly tackles this challenge by providing prompt

access to data and analytics for real-time decision making, while creating real business

value in terms of time and costs for its customers through the analytics and resulting

actionable insights. The enterprise- and industry-wide scalability to provide real-time

information to the organization for efficient operations delivers business value that is

unmatched by other systems in the market.

Customer Ownership Experience

The digitalization and all-encompassing platform for industries is a fledgling concept, one

that is yet to be scaled across industries. GE Predix can be used by diverse industries

ranging from oil and gas and power to healthcare and aviation, in order to enable

operations and asset optimization using the machine and network architecture. Predix has

invested and placed a significant emphasis on user experience (UX). The UX strategy is

comprehensive and instilled across GE Software and design. Frost & Sullivan agrees that

the meticulous steps GE has taken to bring a true visually enriching and business-

impacting experience is truly commendable. The single purpose mission was to

standardize its software experience (look and feel) and provide support and resources for

the company’s designers. As described in Frost & Sullivan surveys about end-user

requirements, it's not just about the technology, but rather the perceptive vision of how

the technology will be used. GE’s well-thought out methodologies to deliver a complex

technology in a compelling way speaks quite well about the company's closeness to its

customers. The investment in UX has enabled GE to deliver rapid turnarounds and new

product introductions in record time when compared to industry norms. Some of the key

product examples include myFleet and myEngine, which were aimed at remote monitoring

and diagnostics.

Customer Service Experience

Predix provides services to not only customers, but also to developers to install wide-

ranging analytics for industrial purposes. The software platform offers pre-packaged

services for machine learning, exploratory analysis, and engineering-based modeling.

These services are expected to create accurate insights and provide predictive analysis in

the processes to save time and cost. Through years of software experience, Predix has

enabled analytics of futuristic machines and IoT applications. The comprehensive approach



demonstrated by Predix speaks volumes of its customer-centricity towards the needs of all

stakeholders in the industrial software market space. The stewardship displayed by GE

Predix in building out the industrial cloud with layered provisioning and security has a

strong potential to become the industry standard for connecting people, processes and

technologies.

Best-practice Visual

Conclusion

GE’s Predix is an innovative and disruptive software platform that enables the futuristic

vision of totally integrated digital enterprise. Predix is able to connect machines of any

vintage from any vendor,helping customers connect all the available assets for centralized

and optimized operations. Through partnerships with companies such as Intel, AT&T,

Vodafone, Verizon, Amazon, Pivotal, SoftBank and Cisco, Predix creates a comprehensive

ownership experience, while its pre-packaged services give its customers a holistic service

experience.

With its strong overall performance, GE’s Predix has earned the 2015 Frost & Sullivan

Global Growth Excellence through Application Convergence Award.



Significance of Growth Excellence through Application

Convergence

Application convergence drives a spectrum of opportunities for value-enhancement as new

applications and ecosystems get created. A case in point is that of the convergence of

information technology and operational technology through the application of software in

the industrial markets. Further, application convergence leads to the extension of

customer value and unique points of differentiation. At its core, application convergence

can only be sustained with leadership in three key areas: customer demand, business

value, and competitive positioning.

Understanding Growth Excellence through Application Convergence

Application convergence leads to opportunities for new value creation in undiscovered

ways, resulting in solutions which outperform existing approaches and drive superior

performance by utilizing multiple system inputs.



Key Benchmarking Criteria

For the Global Growth Excellence in Application Convergence Award, Frost & Sullivan

analysts independently evaluated two key factors — Application Convergence Impact and

Customer Impact — according to the criteria identified below.

Application Convergence Impact

Criterion 1: Completeness of vision

Criterion 2: Growth potential

Criterion 3: Ability to drive application ecosystem interest

Criterion 4: Disruptive capability of the application

Criterion 5: Impact of applications over legacy approaches

Customer Impact

Criterion 1: Business value to customers

Criterion 2: Customer's perception of value

Criterion 3: Customer ownership experience

Criterion 4: Customer service experience

Criterion 5: Brand Equity

Best Practice Award Analysis for GE Predix

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by application convergence attributes and

customer impact (i.e., the overarching categories for all 10 benchmarking criteria; the

definitions for each criteria are provided beneath the scorecard). The research team

confirms the veracity of this weighted scorecard through sensitivity analysis, which

confirms that small changes to the ratings for a specific criterion do not lead to a

significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players

as Competitor 2 and Competitor 3.

DECISION SUPPORT SCORECARD FOR GROWTH EXCELLENCE THROUGH APPLICATION

CONVERGENCE AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Growth Excellence through

Application Convergence

Application

Convergence

Impact

Customer

Impact Average Rating

GE Predix 9 9 9.0

Competitor 2 7 8 7.5

Competitor 3 6 6 6.0


Criterion 1: Completeness of Vision

Requirement: Ability to showcase a long-term vision and pioneer industry transformation.

Criterion 2: Growth Potential

Requirement: Ability to leverage the benefits of converging technologies and drive growth.

Criterion 3: Ability to Drive Application Ecosystem Interest

Success of application convergence depends on the ecosystem maturity, its partners and

strategy to build-out industry-specific solution

Criterion 4: Disruptive capability of the application

Requirement: The new application’s capability to replace existing market incumbents and

provide a path to long-term sustenance.

Criterion 5: Impact of applications over legacy approaches

Requirement: Capability of applications to deliver a set of superior solutions is key to win

support from customers.

Customer Impact

Criterion 1: Business Value to Customers

Requirement: Capability to deliver superior business value instead of simple substitution.



Criterion 2: Customer's Perception of Value

Requirement: Customer view-points on blurring of application and its potential to create

new revenue streams.

Criterion 3: Customer Ownership Experience

Requirement: Customers are proud to own the company’s product or service, and have a

positive experience throughout the life of the product or service

Criterion 4: Customer Service Experience

Requirement: Customer service is accessible, fast, stress-free, and of high quality

Criterion 5: Brand Equity

Requirement: New application enhances the company’s brand, creating and/or nurturing

brand loyalty

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORT MATRIX FOR GROWTH EXCELLENCE THROUGH APPLICATION

CONVERGENCE AWARD

High

Low

Low High

Cu

sto

mer I

mp

act


GE Predix

Competitor 2

Competitor 3



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry players and for identifying those performing at best-

in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices

Frost & Sullivan Awards follow a 10-step process to evaluate Award candidates and assess

their fit with select best practice criteria. The reputation and integrity of the Awards are

based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify Award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized Award candidates

6

Conduct global industry review

Build consensus on Award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible Award candidates, representing success stories worldwide

7 Perform quality check

Develop official Award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice Award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform Award recipient of Award recognition

Present Award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of Award and plan for how recipient can use the Award to enhance the brand

10 Take strategic action

Upon licensing, company may share Award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess Award’s role in future

strategic planning

Widespread awareness of recipient’s Award status among investors, media personnel, and employees



About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best in class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in

partnering with Global 1000 companies, emerging businesses and the investment

community from 31 offices on six continents. To join our Growth Partnership, please visit

http://www.frost.com.

http://www.frost.com/

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BEST PRACTICES RESEARCH - ww2.frost.com · BEST PRACTICES RESEARCH ... supply chain management, ... Impala Platinum, AirAsia, San Diego and Israel National Water Company as