Team 3 Backbay
Business Context/Key Business Drivers • OTIS is subsidiary of UTC and was acquired in 1976. o The company has over 61000 employees with 90% of them working outside United States. o Otis operations were organized in 7 regions and it sold products in more than 200 countries and territories. o In 2004 Otis had 1.5 million elevators and 100,000 escalators operating all around the world. o Otis has elevators in 10 of the 20 largest buildings in the world. o Otis has more than 1.4 million elevators and escalators under maintenance. o Revenues grew from $6 billion in 2000 to $8 billion in 2003. In 2010 the revenue was $11.6 billion. • There were 2 significant IT initiatives taken o The OTISLINE customer service center was implemented to provide 24x7 customer service. o The e*Logistics information transformation project was initiated to facilitate business process re-engineering that was taking place throughout the company. • The reason to take these initiatives was to become recognized leader in service excellence not only in elevator companies but worldwide.
Initiative Objectives/Benefits • OTISLINE Customer service center o As the installation base was growing, service was becoming higher portion of profit than new unit sale. o Service contracts were given out based on responsiveness, quality and price. o With the help of this initiative they were solving the response time as 98% of transactions were answered in less than a second. o The key benefit was to tap the 75% of the market which was service. • e*Logistics o It was an initiative used to manage information flows between participants both in production of elevator or escalator and maintenance process. o Reduction in the process cycle time. o The business benefits were aimed at Otis to become infinitely information enabled and wanting the company to have mastery of information flow.
Initiative challenges • The delivery of e*Logistic program to desktop. They had to check how scalable the application was. • The network and the internet browser settings would have an impact on the performance of the application, as change in the configuration would not let the application behave consistently. • Technology and process training had to be provided to roughly 1500 sales representative and 1500 field installation supervisors across the globe. • Roughly it was taking employees 6 months to get use to e*Logistics program, which was determined in the pilot. • Integration of e*Logistic with legacy systems. • The challenges were addressed and pilot projects were successful and UK had guaranteed 100% use of solution by 2005.
• Both the IT initiatives e*Logistics and OTISLINE were success. • The e*Logistic initiative caused the operating profit to grow, but the working capital had nearly doubled. o The main reason to this was streamlining of process. o They got the complete business process right from getting order to production to delivery to maintenance under one system which helped in effective monitoring, and reducing the turn-around time. o This got done with number of intermediary processes which saved money and time. For example sales representative did not have to mail documents as they were available on system, the system automatically generated reminder mails. • The OTISLINE would be successful because it aimed at response less than 1 sec for 98% of time this is prime essence of service industry, in which you make the customer experience good for them not to leave you.
Relevance and analysis • The case illustrates changes made to the Otis elevator maintenance and order fulfillment areas with help of the IT systems. •