Executing Our Strategy
Understanding Caterpillar’s Digital Solutions
Q&A with Ogi Redzic, Chief Digital
Officer and Vice President, Cat Digital
How does digital fit within Caterpillar’s enterprise strategy?
Digital is an enabler for Caterpillar’s entire business, with a particular focus on services growth. The goal of our services strategy is to make sure our customers can be more successful using our products and services than our competitors’. Our digital solutions help our customers better manage their equipment fleets, lower their total owning and operating costs and reduce downtime.
What does Caterpillar’s digital model look like?
We think of the model in three layers. The first layer is connectivity — for example, using Product Link™ technology to transmit information from assets via cell and satellite. Without connectivity, customers cannot remotely access information from their machines. As we connect more new and existing assets, we can begin to leverage data at scale and help maximize customers’ efficiencies, productivity and profitability.
The second layer is our digital platform, which ingests and transforms data, providing services and supporting the advanced analytics used in our business-changing apps.
The third is the suite of applications we’re building to make it easier for customers to manage their fleets and perform remote control functions and for dealers to deliver services more efficiently. We’re investing in growth in all three of these areas with the goal to double our services revenue by 2026 and make our customers more successful.
What progress have you made in increasing Caterpillar’s digital capabilities?
We’re making significant investments to upgrade our digital infrastructure. By the end of 2019, we had 1 million connected assets sending information to our platforms. That’s more than double the number of assets connected at the beginning of 2016. We've also made major enhancements to our cloud-based digital platform and rejuvenated our cat.com and e-commerce sites. And of course, nothing happens without the best people, so we’re focused on hiring and developing top tech talent in our Cat Digital organization.
How will digital change Caterpillar’s relationships with its dealers?
Even as we make changes to provide better customer digital experience and improve e-commerce offerings, dealers remain critical to our business model. We’re engaging with dealers and leveraging our combined expertise to grow digital capabilities, improve their rental businesses, and modernize their marketing and sales.
Building Tech Talent
The Cat Digital division partners with our Machinery, Energy & Transportation (ME&T) groups to bring digital capabilities to our iconic yellow iron. We’ve expanded our office in downtown Chicago to grow our team of innovators and leaders who are committed to creating quality products and solutions that merge the digital and physical worlds. Our solutions include advanced visibility into the health of mining trucks running far underground; helping small business owners find rental equipment at the click of a button; and generating actionable insights using millions of data points from a million connected assets.
Our Cat Digital team includes software and developers, data analysts, telecommunication and e-commerce experts, and cloud engineers. “People have been building, mining and powering the world for thousands of years,” says Michael Sharov, digital strategy director at Cat Digital. “What excites me is that we’re helping them do this in a brand-new way through the application of software, data science and connectivity.”
Why is Caterpillar uniquely positioned to provide data services to customers?
There are other companies capable of making the investments necessary to offer connectivity and associated digital solutions. What makes Caterpillar different is our domain expertise and our dealer network. Our engineers have decades of experience designing engines and predicting failures, and our dealers have deep, long-standing connections with our customers and their businesses. This knowledge, combined with machine learning and other digital expertise, will set us apart.