Managing Information Technology (469907) Stream 31, MBA Individual Assignment Case Study - Otis Elevator: Accelerating Business

Transformation with IT

Prepared By: Student Name: Nishant Manchanda Student ID - 1133573

Otis Case Study By Nishant Manchanda (1133573)

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Overview
This case study provides insights about the Otis, providing information on how organization grew and over a period of time how top management adopted IT to enhance its operations. Detailed benefits of implementing various IT applications, in terms of the increase in operational efficiency and substantial growth in companys profit, are discussed in detail in this case study.

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Summary of the case study Otis, a wholly owned subsidy of United Technologies Corporation (UTC), is worlds largest manufacturer, installer and service provider of elevators, escalators and moving walkways. Otis was named after the companys founder, Elisha Graves Otis, who invested the safety break elevator in the year 1853. Otiss first commercial passenger elevator was installed in E.V. Haughwout and Cos store in Broadway in the year 1857. Since then, Otis has installed approx 2.3 million elevators and escalators and out this 1.7 million escalators and elevators are serviced by Otis. Otiss major revenue comes from the service contracts they sign with their customers for servicing their elevators and escalators. In the year 2010, Otiss total revenue was US $11.6 billion and approx 80% was from outside USA. Otis has an install base in more than 200 countries and territories. Otis has major manufacturing facilities in America, Europe and Asia and has Engineering and test centres in 11 countries.

Otis has been an innovative company and has launched many innovative products on an ongoing basis. Otis has seen many great leaders throughout its journey who understood the organization, its core values and its customers very well. This leadership brought many management and technological changes in the company. Result of the same, Otis has acquired more than 150 companies since 1995 and has also done significant changes the way company works in order to service their customers better and gain more and more new installation and service contracts. Otis has been an IT savvy company from almost 3 decades. Otis has invested a lot in IT to make their business operations better and improve customer service. With their first IT application OTISLINE Customer Service Centre, Otis started their 24 X 7 customer support centre under which various customer service benchmarks were defined, different escalation levels were introduced and quick analysis was provided to the management to take quick and effective decisions and improve customer satisfaction. Followed the success of OTISLINE, Otis introduced another IT application called REM elevator monitoring, to gain real time information on elevator working performance. Success of these two initiatives set the stage for the next transformation wave at Otis. Since then, Otis has invested a lot in IT to make their business process more efficient and effective in order to enhance customer experience which in turn brings more revenue. In early 2000, Otis introduced system called e*Logistic, which
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was implemented to bring a total change in the way company works. From customer acquisition to order fulfilment to billing, everything was automated to ensure fast, accurate, error free customer deliveries. All these initiatives taken by the senior management of the organization helped Otis in increasing efficiency of the organization and stay on top in the competition. Result of all these initiative were seen when the returns on sale were around over 18% in the first quarter of 2004.

Installing OTISLINE

In my view installing OTISLINE would have been a great challenge and huge cultural change the way company operates. As it was one of the early IT applications which Otis installed with the aim to serve their customers better. The time when most the activities in any organization was done manually and IT was not seen as the part of strategic decisions at that stage first challenge must be to convenience management to invest such a huge amount in IT and second to make 160 people use the application effectively and achieving the high set off service standards set by the organization. The task of aggregating data from various sources and building a capability to respond to customers query on less than a second must have been a huge challenge for the IT team as well.

Use of IT tools at OTIS in 2004

The competition was growing, so the need of staying competitiveness. Otiss top management was keen on improving the operational efficiency of the organization. Successful implementation of OTISLINE showed the way of investing in technology to improve the operational efficiency and improve the overall business face. By the year 2004, Otis had taken various technical initiatives to automate the entire supply chain. Though the tools used were simple database based applications, workflows, internets, extranets and email, but the result were great. Reason which is quite visible for huge benefits is that, the complete sync between all major operations brought the effectiveness in the operations. From sales order processing to order fulfilment to field installation and finally closing the activities were in sync, thus

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saving lot of resources, wastage, excess inventory and increasing in customer satisfaction. Result of this, Otiss return on sales reached over 18% by first quarter of 2004. Standardization, Integration, Firm Strategy Service Business, Utilizing existing infrastructure

e*Logistics Program A transformation change the Otis work Culture

After a successful business transformation and cultural change came in the organization from the implementation of OTISLINE, RIM, SIP and other small tools, Bousbib, Vice President of Otis joined in the year 2000, recognized the need of becoming more flawless service company. He believed in the phrase We maintain elevators, we service customers. This was the sign for Otis to shift its motive from being a manufacturing / engineering company to customer Service Company. To achieve this, Otis had to redefine its business processes beyond OTISLINE, service support tool and REM elevator monitoring tool and to include other sides of the business such as new-equipment design, supply chain, new equipment delivery and field installation. Otis had highly complex global operation, dealing with multiple manufacturing units, servicing customers over 200 locations and suppliers from all over the world. To enhance the efficiency of operations and make organization infinitely Information enabled e*Logistic program was launched. Guiliano DI Francesco, project director of e*Logistics, proposed to automate the sales, factory and field operations through the web for proper flow of information throughout the organization. The implementation of e*Logistic automated the entire value chain and flow of information was flawless from sales order processing to order fulfilment to field installation and in last performing closing activities. This brought the cultural change in the entire organizations way of working. Direct benefits were seen in following areas Sales Processing Prior to the implementation of e*Logistics, order booking, validation and scheduling was done manually. This entire process was automated in the e*Logistics program through a workflow and circulated all key documents to all supervisory personals electronically. Once
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contract is awarded, field installation team could do the site assessment and then place the order to factory. All this things resulted in saving lot of time, reducing inventory levels and eliminating waste throughout Otis value chain Order Fulfilment Regional Contract Logistics Centre (CLC) were responsible for accepting orders from sales team and make on time delivery to customer. Prior to e*Logistics, this process was manual, thus inviting lot of errors, miss communication and in last wasting lot of time. With the implementation of e*Logistics, sales person could send the order electronically to CLC, reducing the chances of any error to almost nil. With the help of e*Logistics, CLCs got the access to worldwide subsystem integrators (SSIs) and allowing them to source parts from multiple SSIs wherever they could find the lowest cost and delivery time. Field Installation e*Logistic program allowed field installation supervisors to be more equipped and connected in the entire supply chain. Regularly monitoring the status of the site remotely, field supervisors would request the delivery of product when it is required. This entire automation and advancement helped Otis in eliminating many hidden costs of lost, stolen and damaged material. Closing Activities With e*logistic, as soon as the supervisor confirmed the completion of job, a workflow triggers promoting a series of customer contacts and billing. This results in accurate billing and high conversion of maintenance orders.

Otis Case Study By Nishant Manchanda (1133573)

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