Otis Case Study
Air Bustle Joined Otis In 2000 as executive vice president and chief operating officer, and In 2002, he was elected president of Otis McFarland & Delaney, 2005). Despite the company’s exceptional performance and growth during 2000 to 2004, he realized that he needed to carefully optimize the Information System (IS) of the organization for future progress in the competitive market. Due to slow building cycles in developed countries, and also its rivals, new- unit sales were quite stable.
And therefore, service was estimated to account for up to 75% of Toot’s revenues. Whereas, in emerging economies like China, revenues were being generated mostly from new sales (McFarland & Delaney, 2005).
OUTSHINE In the sass, Otis embarked a huge project of installing a 24 x 7 “centralized customer service system” (McFarland & Delaney, 2005) called OUTSHINE. Technology was not as advanced as today, and the company’s processes at the time relied on individual regional systems, rather than a centralized one (Messier, Rata, Bray & Vane, 2012).
Otis would have gone through a major restructure of several of Its service offices, because an IS was being built from the ground up. Information was now going to be traversing through a streamlined information channel, rather than layers of hierarchical structure. A lot of resources would have been invested in training employees about the new processes, and training managers about the added responsibilities and new information that was going to be available as a result of OUTSHINE.
Any sort of organizational change experiences resistance from stakeholders in one form or the other. Toot’s employees might have resisted the change for a number of reasons. Fear of redundancy, added responsibility without any change in remuneration, lack of self-confidence in acquiring new skills required for the Job, lack of perspective as to why the change was being implemented, or imply too comfortable with the status quo, are some examples of the form of resistance that Otis might have had to overcome (Melcher, Rata, Bray & Vane, 2012).
Information Transformation Obvious noticed the change in the industry, and the way business was being done, Ana presented a balloons Tort Otis: “10 Decode ten recognizes leader In service excellence among all companies-not Just elevator companies-worldwide. ” (McFarland & Delaney, 2005).
His aim was to create a paradigm shift within the organization from being a product manufacturing company to an excellent customer focused service provider.
Due to regional and cultural variations within manufacturing, sales and supply-chain departments, he decided to streamline the department processes globally by using technology as an enabler. The organization went through a third- order change of transformation, whereby the existing IS was changed drastically. Its focus was shifted from managing production and physical assets to managing logistics and information, and this caused a systemic effect on all the other departments (McFarland & Delaney, 2005; Piccolo, 2007).
As a part of this transformation, departments were restructured and new process improvement orgasm were implemented on a global basis.
Programs such as Standard Interface and Modular Based Architecture (SAMBA), Achieving Competitive Excellence (ACE), and Sales and Installation Process (SIP), were introduced in engineering, supply chain, and sales and field operations departments, respectively (McFarland & Delaney, 2005). E*Logistics Project The most significant aspect of this IS transformation was the e*Logistics information transformation project (McFarland & Delaney, 2005).
It provided the tools, in the form of IT systems, which were required to re-engineer business processes across the many. The project involved merging separate IT initiatives that were under development within Otis, with the basic idea of connecting different departments of the organization through the Web. Giuliani Did Francesco was appointed the Project Director of e*Logistics, perhaps due to his experience working in quite a few departments of the company, or because he might have had a vested interest in the transformation (McFarland & Delaney, 2005).
Under his supervision, e*Logistics automated manual processes involved in different stages of product installation and maintenance, while simultaneously integrating the dispersed data and information on a global scale. Back-end Technologies The technologies behind the development of e*Logistics were based on standardized data interfaces, and they were owned and built by Otis itself. This means that the software solutions were designed to incorporate and adapt to existing technologies, rather than designing solutions with fresh technologies from square one (McFarland & Delaney, 2005).
The new business model and company’s vision were instilled into Otis on a global scale. Senior management ensured that every employee, from top to OTTOMH, was on-board the change Otis was about to embark upon, and that employees were willing to adapt to the technological and organizational restructuring (Messier, Rata, Bray & Vane, 2012). The company valued the role of its employees in successfully implementing this change, and therefore invested resources in familiarizing them with technologies.
It was this tactic that enabled them to reap extraordinary benefits by using simple IT tools.
Institutionalizing Changes Since the launch of e*Logistics, changes to sale orders became transparent across different levels of the sales cycle. SIP program was based on the idea of identifying best practices across different units of Otis, globally. During the project proposal phase, SIP recognized that a pre-bid checklist was an appropriate way of managing new clients. E”logistics anemone tons Day Introducing a steward solution, Instead AT paper based forms, which enforced a sign-off from both sales and field-installation supervisors(McFarland & Delaney, 2005).
This eliminated information inconsistency between the two units, and also helped in other aspects of this phase by retaining consistent information about customers and proposals.
Upon acceptance of a proposal, the order would enter the next phase of sales processing. E*Logistics automated and institutionalized the new processes of this phase by electronically dispersing important documents amongst the managerial staff for bookings, validations and scheduling.
Data was uploaded to different financial systems of the company, and as a result of these automated processes and clear visibility of sales orders, field-installation supervisors were able to better assess the readiness of a site, thereby reducing costs and excess inventory, while improving delivery times McFarland & Delaney, 2005). To improve processes in the order fulfillment phase, Contract logistics centers (CLC) and distribution centers (Disc) were established to manage customer requirements, product configurations and supply chain management.
Instead of faxing or mailing sales orders, e*Logistics provided a central software solution which connected CLC on a global level. As a result, CLC were able to place orders from different suppliers in a cost-effective and timely manner (McFarland & Delaney, 2005).
E*Logistics embedded new processes in the field installation phase as well, by sending reminder e-mails to field-installation supervisors, and demanding an update of the field sites prior to shipping the products. Orders were now processed and shipped Just-in-time, as per remote requests from the field-installation supervisors.
These processes gave the supervisors a better control on the fiscal accomplishment of each sale (McFarland & Delaney, 2005). E*Logistics also automated the process of billing customers and transitioning sales into service contracts, by prompting service agents to contact customers upon Job completion. This resulted in precise billing, increased conversion of new-unit sales to service contracts, and faster collections in the closing activities phase (McFarland & Delaney, 2005). The above five phases highlight how e*Logistics baked new best-practice processes into the organization.
Implementation In 2001, Ron Beaver became the Chief Information Officer (CIO) at Otis with 450 IT employees and 250 contractors reporting to him on a dotted-line basis. He was the leader of global IT with seven regional IT leaders reporting to him directly, who were responsible for their local systems and processes. 0 of the aforementioned staff were dedicated towards design and implementation of e*Logistics, and it was not deemed as a separate investment to all the other programs that were introduced for process improvements (McFarland & Delaney, 2005).
Rather, it was considered as an enabler to implement those programs successfully. As with any IS transformation project, there were a number of technological challenges involved in ensuring successful implementation of e*Logistics.
Delivering the software to over 20,000 desktops across the organization, and training over 3000 staff in sales and field- operations worldwide, were a couple of such challenges faced by Otis (McFarland & Delaney, 2005). Therefore, to minimize the associated risks, the project was rolled out at pilot sites across Europe.
Its successful implementation at pilot sites aided in planning implementation in other regions, which were priorities based upon “need Ana return on Investment” (McFarland & Delaney, 2 I nee projects success was measured based on a number of metrics, such as number of orders processed through e*Logistics by each sales representative (McFarland & Delaney, 2005). Conclusion The organization invested a lot of resources into streamlining its processes globally and shifting its focus from product flow to information flow.
Huge effort was involved in progressing towards Busboy’s vision of being the world leader in service.
E*Logistics was implemented in conjunction with existing programs and they worked together to multiply the benefits. The success of this transformation project is an evidence that Otis should continue to invest in technological developments, in order to further improve its business processes and sustain its image in the global market. References McFarland, F. W. , & Delaney, B. J.
(2005). Otis Elevator: Accelerating Business Transformation with IT.