Enabling Technology

Like many, I view technology as an enabler. It enables old, established industries and businesses to create new markets that did not exist before. The Classic example is Ford’s Model T. It was the Model T that changed the transportation market, not the automobile. Through technology (i.e. production savings), Ford was able to mass-produce the Model T and, with that, access an entirely new consumer that previously was content with horse-drawn vehicles. He democratized access to modern transportation.

In my quest to seek solutions for flight training, I find it helpful to seek ideas/examples form other industries with similar characteristics. In May, I had the pleasure of spending an afternoon with the General Manager of the leading CATERPILLAR (CAT) dealer in North America. With $55 billion in revenue, CAT is a big company looking for every opportunity to expand and find new customer segments. The GM walked us through the grounds and showed us a variety of equipment from diggers to dozers. Truth be told, I spent my childhood working on farms that bought and sold heavy equipment as well as assembled commercial grade field mowers. The equipment on the field was a mix of factory new and customer used, all of them had a similar set of antennae and wires connected to the cockpit.

The two antennae are connected to a ‘brain’ in the back of the dozer. In each picture, the skilled operator is actually not controlling the blade or bucket. He/She is simply driving the equipment. What is happening behind the scenes is the ‘brain’ has a previously uploaded 3d plot plan of the construction site (think Matrix movie). The ‘brain’ is delivering these precision metrics coupled with gps positioning to dictate the performance of the dirt pushing or digging. Furthermore, the brain has the ability to connect with the corporate office enabling the plot plan to be adjusted in real-time (Connected Cockpit?). Despite my love for heavy equipment, I don’t know the first thing about how the construction process works. Nonetheless, I can wrap my head around how this type of technology increases precision while driving down the excess cost of ’trial and error’.

Today’s environment is forcing companies like CAT to transition from pushing product to becoming a full solutions/service provider. Historically, CAT would sell new equipment into large construction firms with substantial budgets. Clearly a good business but since the last downturn, these large customers are extending their replacement times and looking to get more out of their investment. To mitigate, CAT (under different company brands) is selling technology solutions to existing customers with older equipment as well as packaging hardware (equipment and sensors) and software (connected cockpit stuff) to provide a different tier of customer a total power by the hour solution.In the days of Ford’s Model-T, decreasing cost created a new consumer pool, for today’s consumer, you have to have a solution that either increases yield or decreases cost. Everything else is just noise.