OTISLINE

1. Otis has been the market leader in both sales and service segments. Consider the
time when OTISLINE was just being conceived. Why do they need to do anything
at all, and that too in the service sector?
Otis has been the market leader in both sales and service sector in the elevator industry. It had
to keep on combating various threats and leverage various strengths in order to maintain its
strategic position in the industry. Lets look its strategic position in the elevator industry
with respect to Porter's 5 forces and identify few areas of improvement.
1. Rivalry between existing players - The service market was fragmented prior to introduction of
micro-processor-based elevator control systems. It needed to continuously reduce its costs
to maintain its competitive position in such a scenario. It is also possible that some
competitor comes up with some new technology which transforms the industry the way it
was transformed after introduction of micro-processor based control systems.
2. Threat of new entrants - The threat of new entrants was low with the introduction of microprocessor-based elevator control systems. Still it might be the case that few years down the
line proprietary devices are copied and capital required goes down. In order to combat this
threat new upgrades need to be made.
3. Suppliers - OTIS was taking services from a commercial answering service which did not
have the same interest as OTIS to give good quality service to the customer. OTIS did not
have much control on the quality of the services from these companies. The service had to
be standardized both in terms of call back response time and onsite customer service. It had
to make some changes in its strategy to account for this problem.
4. Buyers - Buyers did not have much loyalty when it came to taking services. Although OTIS
had differentiated products but majority of the revenue came from services. They were quite
price sensitive when it comes to getting servicing in the later years of the building. The
switching costs were also not very high once the service contract is over. So OTIS would
have to constantly differentiate its offerings in terms of both quality and price to remain
competitive.
5. Threat of substitutes - There existed few potential substitutes like escalators and moving
sidewalks which could affect the elevator business and consequently the elevator services
business.
2. Which aspects of the OTIS organization would be affected by OTISLINE, if
implemented?
Using Porters Value Chain model as the framework, it is possible to identify the core and
supporting activities that would be affected by OTISLINE.
The major impact was in operations. The entire response system saw an overhaul, with each task
of the dispatcher being sub divided (customer facing, service man facing). The information
collected from the customer on the call could be directly input into the system, which allowed
for easy identification of repeat calls. It also allowed the calls from the customer to go to the
dispatcher in the best position to help them and not merely their local ones. This shortened the
time of the entire process to sub seconds. Additionally, the service was now available 24 hours a

day and 7 days a week. It also allowed for priority dispatch services to critical areas such as
hospitals or when people were stuck in the elevator.
It also changed the manner in which the serviceman operated. By cutting the written report,
paperwork was reduced. The details of the problems were entered by the serviceman calling the
OTISLINE number.
The new IT system also changed the marketing and sales division work on two fronts new
equipment sales, which allowed the company to track elevator sales prospects and service, whose
salient features included a guaranteed response time among others.
OTISLINE also affected the after sales services, which in this case includes all the services post
the first service call. It allowed the company to keep track of customer satisfaction through
measurement of reduction in the volume of complaint calls. Through the database, it was
possible to identify elevators that were breaking down more frequently and analyse the reasons
for it. In areas of recurring problems, more resources could be allocated.
Apart from its core activities, the supporting activities also felt the effect of the introduction of
OTISLINE.
The firm infrastructure, which so far had been decentralized in the service sector, was becoming
more and more centralized with the existence of a single database.
OTISLINE helped identify possible sales jobs which would allow the company greater leverage
in obtaining contracts as compared to its competition.
The human resources of the company also saw a four-fold change. A large number of third party
dispatchers were now under the ambit of the company. The decisions regarding the hiring of
employees could now be made using information obtained through OTISLINE. Dispatcher
evaluation would be done through the response times from the same system. Finally, the training
that the employees had to undergo was built around this system.
It is evident from the above that, though OTISLINE was introduced with the intention of
overhauling the operations of the service division, it had far reaching impact on other aspects of
the firm. In fact, it may be argued that the effect the system was not limited to just the company
but also changed the landscape of the industry as a whole.

3. What would be the risks associated with OTISLINE? How did they try to take care
of those?
Control over service mechanics: As there was more control assigned to the Information
System, it reduced the control over dispatching of service mechanics for callbacks and therefore
it was difficult to know their location throughout the day. In order to address this issue,
OTISLINE came up with the solution to provide field offices with a personal computers with
OTISLINE inquiry capability installed so that they can keep a track of their activities.
High Skill level required for working in the OTISLINE system: Once the system was
installed the dispatchers had to be provided with formal training to train them on how to handle
the new advanced system. In-house training on the dispatching system and other skills where
provided to ensure efficient handling of calls. To take care of this risk, they have taken care of
the language barrier by ensuring the calls are allocated to a dispatcher based on the preferred
language selected.

Other risks:
System Failure: Dependency increased on OTISLINE as the whole system was centralized. It
meant that a system failure in any level could stall complete customer services. To handle this
risk, the managers would maintain detailed maintenance manuals of important parameters to
vary which can be used in case of any system failure.
Data Abstraction: As all the data is now centrally stored and accessible for use to everyone, it
can be used by anyone. In order to avoid it we can have authorization and different access levels
in the database to access the data.