OTISLINE Case Study Group D17

Naveen N Kumar(233), Neerav Verma(235) & Neha Yadav(237)

1. What might be the motivation for Otis to launch this project ? Otis, a subsidiary of United Technologies Corporation, was the first elevator company to introduce microchip into the elevator mechanism. It incorporated the latest technology into its elevators, (indicating that Otis was investing in the technology as it saw some advantage out of it.) Otis installed its first computer IBM 1401 in 1965 to automate maintenance billing which was used for production control and accounting. It kept upgrading its information systems from time to time as and when new computer or technology was available. But this still was unorganized as each department had separate technological advances, i.e. in some departments like billing and production, the technology was advanced, but in departments like dispatching it was still lagging behind. This led to the inefficiency in dispatching. They introduced information technology in 1981 to check the feasibility of centralized customer service department. It used answering machines to turnaround on weekends and no prime time calls, which was inefficient. Hence Brad Robertson decided to start the OTISLINE project which would improve the visibility of the service business and help in better managing of the current operations. OTISLINE reduced the responsiveness of the Customer callback requests dramatically. It also improved the quality of call handling and service feedback.
Background: OTIS was a market leader in both the aspects of elevator industry i.e. sales and services. However, the services industry despite being very stable had become very competitive due to entrance of many small players since services involved higher margin on profits, which attracted many entrants in the field. An elevator service company would be typically invited on the basis of responsiveness, quality and price. OTIS was able to charge premium for its products because of its established name but it had to maintain the quality and customer satisfaction high to get new installation contracts (more sales) and service contracts. It all started for OTIS with a companywide cost reduction program in 1981. Key reasons for the program were: 1. A centralized customer service system was deemed desirable because getting new

contracts would only be adjudged based on through responsive call-backs by the company. 2. Reduction of response time which only a centralized system would make possible to do. A centralized system would enable the company to accept calls even during non primetime. This didnt work efficiently for the company through local answering services due to non alignment of interests. 3. Get timely feedbacks from the customers on service quality. 4. More aligned cost effective solution was needed. 5. The response on call-backs till now varied across locations and it was felt to make it more effective to enhance customer satisfaction, the company needed to be more effective across all locations. 6. Of the 2300 service mechanics employed by NAO in 1985, most handled both callbacks and preventive maintenance. According to NAO OTIS could save up to $5 million by reducing call-backs which centralized system could make possible achieve

2. How was value created in this model? OTISLINE proved beneficial to the company in the following value proposition terms: Responsiveness Customer Satisfaction Cost Reduction Communication Teamwork Innovation Reliability 3. What adjustments in the organization were needed, if any, to accommodate OTISLINE? Initially some field office managers were skeptical of the concept as they felt that the system would decrease their control over the dispatching of the service mechanics for callbacks and that therefore they would not know the location of their service mechanics throughout the day. It needed to improve the functioning of the OTISLINE to accommodate these requests. Another major adjustments needed was training the staff in using the software and maintenance of the software. It also had to hire better talented individuals who could operate the OTISLINE without difficulty and improve their call handling ability.