Generac powers business transformation with data, AI

CIO Tom Dickson has helped evolve the generator manufacturer into an energy tech provider thanks to a shift to predictive modeling fueled by the cloud, analytics, and AI.

Being a company’s first CIO provides room to make your mark, and Generac Power Systems’ Tom Dickson has done just that, moving swiftly to help transform the backup generator manufacturer into an energy technology company.

Dickson, who joined the Wisconsin-based company in 2020, has launched PowerInsights, a homegrown digital platform that employs IoT and AI to deliver a geospatial visualization of Generac’s installed base of generators, as well as insights into sales opportunities.

Crucial to PowerInsights’ development was the company’s fast track to the cloud. The digital platform, which earned a 2023 CIO 100 Award for innovation and IT leadership, was enabled by Generac’s embrace of Microsoft Azure and Azure Data Factory as well as Databricks’ AI platform, all completed over the past two years, Dickson notes.

The CIO, who attributes Generac’s speedy digital transformation in part to his partnerships with Microsoft and Databricks, says PowerInsights’ data and AI capabilities have generated actionable intelligence about Generac’s installed base of customers, including go-to-market scoring, as well as recommendations by product and location.

The analytics and AI tools also help identify potential new customers and offer other new market opportunities for the Fortune 1000 company’s sales team.

Powering transformation with data

To get there, Dickson spent his first year at Generac devising and presenting a detailed digital transformation for the manufacturer, centered around data. Dickson’s AI and analytics strategy would require the company to consolidate a wide range of corporate data spread across various business units — customer data, equipment data, and IoT data from the installed base of generators — into his proposed data factory.

“It’s a tale of two companies,” Dickson says of the company’s evolution from standalone manufacturing to a multifaceted energy technology company. “Most manufacturers do not have their data consolidated,” the CIO explains. “From an IT perspective, the biggest opportunity for us is consolidating and connecting all our data from across different units in the company into one single data platform for the purpose of strategic analysis and reporting and the potential of that analysis and AI to drive future revenues and growth for the company.”

To render the most comprehensive data map and recommendations, Dickson and his team collected data from every business unit, every IT system, every server, and every data center. PowerInsights also uses various IoT technologies and services derived from more than 15 acquisitions Generac has completed, including solar batteries, e-thermostats, and software that connects industrial equipment to the internet. Sensors on IoT devices, including Generac’s backup power supplies, clean energy solar batteries, and other energy technologies, feed data into the Azure Data Factory as well.

“AI makes that data usable,” Dickson says of the platform. “We were able to plot all of our assets and all of our acquired M&A assets into one single map for visualization so we can allow predictive analysis to predict how past weather patterns might impact one region’s stability and predict possible machine failures.”

For instance, the data and existing models give sales and service teams opportunities to notify existing customers about the need to service their equipment before a frosty winter or imminent storm. PowerInsights also incorporates a licensed external service to determine when and where power outages occur.

“We have integrated power outage data as well so [our sales and marketing team] can overlay our assets when a power outage occurs in a particular part of the country and reach out to people to see if they’re interested in a generator,” Dickson says.

Dickson’s team wrote one AI model, for example, that was released to a small subset of its dealer network “to predict when they could potentially win more business for us both,” he says, adding that Generac’s work with Databricks has furthered the company’s journey into predictive modeling.

For example, one PowerInsights model predicts the potential path of a power outage based on the path of an incoming hurricane and alerts customers to ensure their systems are serviced. Another model identifies customers living in bordering states who may want to purchase a power supply system.

Milan-based IDC analyst Roberta Bigliani sees great promise in Generac’s digital platform. The “intelligent and predictive strategies” enabled by PowerInsights “help the OEM improve its products and go-to-market,” Bigliani says. “IoT and AI can provide a precious feedback loop to the design and engineering function to improve design or component sourcing based on usage and failure modes or go to market in a more effective way by targeting disaster-relief organizations or boosting supply to disaster areas.”

Driving success

During Dickson’s brief tenure, Generac has increased its IT team by nearly 30% and upskilled its IT staff on Azure and Databricks technologies with help from Microsoft. The company currently employs three data scientists and is training more for future generative AI applications, the CIO says.

“I used my partnership with Microsoft to upskill my IT team,” Dickson says. “I joined during COVID, and I didn’t have any talent pipeline. I was new to town.”

Dickson’s ambitious data collection and AI strategy combined with an upskilled IT workforce and a CEO and C-suite who were open to Dickson’s recommendations were all pivotal factors leading to success, the CIO says. Also vital has been the fact that the IT team under his leadership reports directly to the CEO, Dickson notes.

PowerInsights appears to be having an impact, though Dickson was reluctant to share specific financial information about its contribution to the bottom line.

Still, when Dickson joined in August 2020, Generac was a $2.2 billion company. By the end of 2022, the company’s reported revenue was $4.6 billion.

IDC’s Bigliani and her colleague Jean-François Segalotto see Generac exemplifying several trends in the energy equipment space: “servitization” (aka selling outcomes as a service) as well as intelligent and predictive strategies.

“OEMs have shifted from competing only on products to competing on services,” she says. “Generac and some of their competitors in the power generators space have invested in digital capabilities mainly IoT, AI, and AR that enable them to move from a reactive [strategy], such as break-fix, to a proactive service that includes, for example, predictive or prescriptive maintenance, or even remote support via AR applications.”