Otisline Case Solution

                                                          OTISLINE CASE SUBMISSION

Q1.  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 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. 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. Porter analysis has been done as follows to find the key reasons for the program:

• Remain the Market Leader: In order to remain at the market leader position, OTIS had to ensure a better product quality & faster service than its competitors. This required an efficient Service Management system especially to handle previous fault related data.
• Centralized System: High variance in quality of answering services deployed by OTIS was a big motivator to come up with a centralized system like OTISLINE, which actually has the sole interest of reducing the customer response time. A centralized system would enable the company to accept calls even during non-prime time. This didn’t work efficiently for the company through local answering services due to non-alignment of interests.
• Better Customer service: 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. Get timely feedbacks from the customers on service quality.
• Cost reduction: Of the 2300 service mechanics employed by NAO in 1985, most handled both call- backs and preventive maintenance. According to NAO, OTIS could save up to $5 million by reducing call-backs which centralized system could possibly achieve.
• Available Budget: As the cost reduction program completed in 1982, OTIS Management had a budget to assess the contribution of IT systems in quality improvement of maintenance service.

Q2.  Which aspects of the OTIS organization would be affected by OTISLINE, if implemented?

Following aspects of OTIS would be affected if implemented:

Information services – OTISLINE dispatcher was a given a local display and short database path so that he could provide critical information to the customer in very short time frame. Because of importance of OTISLINE, a huge portion of information services budget was earmarked for it support.

Customer Services – OTISLINE promoted the dispatcher efficiency by only assigning one function to each dispatcher.  It was expected that centre would soon receive 10,000 calls/day as system gets implemented for all districts.

Dispatching and Control of Service Mechanics – OTISLINE helped in improving the timeliness and quality of information available to district, region and NAO management significantly. Some field office managers were critical about their control over the dispatching of service mechanics but OTISLINE is being worked upon to address this issue.

Marketing –

• Equipment Sales team could access the NES application by calling OTISLINE which would allow them to automate the production of status report on elevator sales prospects.
• OTISLINE improved NAO’s responsiveness to customer maintenance request.
• It improved communication between customer and service and sales department.
• There was a reduction in complaints and service calls due to OTISLINE.
• NAO was the first one to have professionally staffed customer service centre which was possible due to OTISLINE.

Engineering –

• Remote Elevator Monitoring would monitor control system and log performance statistics onto a distant computer. In case of problem, elevator could transmit message to computer which would then transmit message to OTISLINE and dispatch a service mechanic.
• Hand Held terminals for service mechanics for communicating with OTISLINE dispatcher eliminating the need for call in for service messages.
• OTISLINE could be used for telemarketing purposes to contact the new customer as well as notify old customers.
• New equipment Sales could be expanded to new equipment ordering and also in car phone system could also be installed to inform OTISLINE dispatcher in case of emergency situations like someone is stuck in the lift.

Q3. What would be the risks associated with OTISLINE?  How did they try to take care of those?

If we see the McFarlan’s Strategic Grid, we see that Otis line implementation comes as a High on Core strategy and high on operations decision