OTISLINE(A)

Group 20 members: Anirudh Srinivasraghavan (0043/49) Amandeep Bhukal (0030/49) Ajaya Sahu (0021/49)

1. What might be the motivation for Otis to launch this project? Otis Elevator, a subsidiary of United Technologies Corporation was the market leader in the elevator industry both in terms of sales and services. The company name was known worldwide and became synonymous with passenger elevator, the most useful and dramatic invention of the nineteenth century. In the 1970s with the advent of microprocessor the design of elevator underwent transformation replacing the mechanical elevator control system. Otis was the first mover and products like Elevonic 401 strengthened their market position and increased the NAO (North America Operation) market share significantly. By 1985, even though the industry became competitive with players like Dover, Montgomery and U.S. Elevator, Otis was still a leader in both sales and service but the services industry had become very competitive due to entrance of many small players. With the smaller players coming up with large discounts and many attractive offers, OTIS service revenues were getting affected. OTIS, as a leader of both sales and service of elevator market had the following motivations to come up with OTISLINE a. Emerging as a leader: The brand OTIS was associated with technological leadership, reliability and quality and in order to maintain this leadership, OTIS had to ensure a better product in terms of quality, reliability and faster service than its competitors. To provide better and faster service required building an effective Service Management System (SMS). b. Reducing Cost to Increase Profit: By 1981 the company was more focused on reducing the cost to increase the profitability. NAO calculated that reducing callbacks for each installed elevator by one per year would save them $5 million. Implementation of OTISLINE would reduce the number of callbacks per year by providing preventive maintenance. c. Improving Customer Service: The assessment of customers on elevator service offerings was mainly based on its responsiveness to callbacks. Lesser the response time better the company services. Hence, OTIS had to come up with a better quality service that would provide a considerably lower response time. d. Centralized Customer Service System: Otis and other elevator services were initially using the commercial answering services for working hours and prime-time callbacks. To gain an edge over other service companies, a centralized service system was required to accept customer service requests for elevator maintenance during non working hours and to reduce the variance in the quality of answering service. e. Availability of Funds: By the end of the year 1982 the company had generated a significant budget to assess the ability of information services to improve the quality of maintenance services through the cost reduction program. 2. Analyze the risk and benefit of this project. The potential risks of the project could be as follows: a. System Breakdown: If the OTISLINE system breaks down even for an hour or a day, it would a very serious negative impact on the brand image of OTIS. This might be a potential reason for customer dissatisfaction. b. Employee Dissatisfaction: Automation of the entire process might lead to lesser authority and control of field office managers over the service mechanics. Also, high monitoring of daily performance of the service mechanics could make them dissatisfied. c. Improper budget allocation: Over emphasis on OTISLINE could reduce the budget allocated to innovation of other products and services. The potential benefits of the project could be as follows: a. Brand building: The success of OTISLINE in providing quick service and excellent customer satisfaction could greatly enhance the brand image of Otis in the market space.

b. Diversification: Otis can leverage their brand and customer base to enter into other related industries such as escalators and other heavy electrical equipment sectors, as a serious player. This would also help them to reduce their dependence on the elevator business. 3. What would be the impact of the system, if any, on Otis? OTISLINE would have a major impact on Otis and would contribute significantly to the revenue of its business. The potential impact of OTSILINE on different business activities would be as follows: I. Information Services: Prior to OTISLINE, the Service Management System database contained the customer master profile and other information like route information and price estimating data to control and monitor the service business. But with OTISLINE and the database, the SMS service was expanded to include all the maintenance activities for elevators along with improving the present price estimating service and adding new applications such as billing. OTISLINE application reduced the response time significantly. The application enabled OTISLINE dispatcher to respond to a customer in less than a second by giving the local dispatcher a local display and by engineering short database path to the necessary information. II. Customer Service: a. Dispatchers Efficiency: OTISLINE enabled the dispatcher to update the database with the information obtained during the call allowing quicker identification of the elevator during the subsequent calls from the same customer. Better customer service was provided with the use of toll free number and distributing the incoming call to the next available dispatcher. The telephone system enabled the supervisor to measure the performance of the dispatcher against department standards by using the amount of time each dispatcher was available to accept calls during the shift. The OTISLINE application enabled the dispatcher to identify the building and elevator needing service quickly through a series of questions displayed during the call and thereby improving the customer service. b. Dispatching and control of Service Mechanics: OTISLINE improved the report management system used by the local office to support daily operations and by the engineering department to flag problems and establish preventive maintenance procedures. Earlier the service mechanics were asked to prepare reports for each callback and submit to the field officer for future use. But with OTISLINE, instead of writing a report for each callback, the service mechanic was asked to call OTISLINE and report the steps taken to repair the elevator. It improved the quality and timeliness of information available to district and field offices and NAO management significantly by storing all data about services on a central computer rather than each local officer keeping manual logs. Earlier the inconsistency of callback reports over different offices created problem in identifying malfunctioning components and other recurring problems. III. Sales: New Equipment Sales: OTISLINE could greatly boost elevator sales. The New Equipment Sales (NES) application was an integrated database management system designed to automate the production of status reports on elevator sales prospects along with storing data about competitive losses and performance of NSE representatives. By calling OTISLINE, NSE representatives could also finalize new sales deals. Communication: The communication, within the organization as well as between the company and the customers would improve and thereby boost the customer satisfaction and hence the sales of Otis.