Otis Elevators

Executive Summary Dear Mr. Bousbib: These are exciting and challenging times at Otis Elevator Company. We are currently the largest manufacturer, installer, and servicer of elevators, escalators, and moving walkways in the world. [1] Just two years ago we completed the second largest acquisition in company history by adding Amtech Elevator Services. This acquisition has proven to be a key strategic maneuver as we have eliminated an industry rival while increasing the company’s revenue, operating profit, operating profit margin, and customer base. Our company’s successful history, entrepreneurial mindset and strong process focus puts Otis ahead of the curve. Most recently Otis has introduced the e*Logistics program. This program will connect our sales, factory, and field operations through the Web to create a single global supply chain. With the implementation of the e*Logistics program we are moving towards our goal of becoming recognized as a leader in service excellence among all companies – not just elevator companies – worldwide. Otis faces 4 main challenges concerning its new IT: • Cultural challenge - Getting everyone on board with a process change when normally it is used to product changes. • Technical challenge – Delivering a system to 20,000+ computers and making sure it works everywhere. • Deployment challenge – Otis occupies 200 countries, 1,800+ locations, and has 4,000+ field supervisors and salespeople in places with different languages, cultures and environments. Managerial challenge – The challenge here is to standardize the process while retaining the key ingredient to success of the company which is the local empowerment and accountability for results. Managing the trade-off of standardizing processes globally while retaining the local empowerment, motivation and accountability will be an especially difficult task. The challenges we face will come with a price, but if there are no trade-offs we will never achieve a sustainable advantage. There is always a certain degree of risk associated with such ambitious goals, but the essence of strategic positioning is to choose activities that are different from rivals’. [2] Otis will legitimize this idea through drastic improvements in logistics and service via the e*Logistics program. The time, money, and resources needed to complete this transition will be needed in abundance, but the benefits reaped will justify our efforts. A key component of enduring these challenges is to align our activities with our strategy. This consistency will give our company fit and protect us from straddling and mimicry. To achieve our goals we must get everyone, inside the company and out, on board. Resistance to change is natural and with 60,000+ employees, and a countless number of suppliers and customers this change will be most challenging. This challenge will be met through our product improvement centers. It is here where employees from all different departments interact early on in the process to identify root causes concerning quality issues, setbacks, etc… and resolve them. In the past, we may not have had cross organizational communication; our employees now, however, need to be knowledgeable about our entire process to be effective. One advantage we have is the familiarity of past IT systems such as SIP, OTISLINE, REM, and SIMBA on which the e*Logistics program will be based. I also recommend that we educate employees, suppliers and customers about the benefits realized by the implementation of the e*Logistics program to ensure a smooth transition. The eLogistics® program will be paramount in making our company “infinitely information enabled. ”[3] The accessibility of this information on a global scale will greatly improve our company’s field efficiency, decrease the amount of inventory sitting at job sites, speed up installation cycle times and allow us to focus on customer service. ----------------------- [1]Case “Otis Elevator: Accelerating Business Transformation with IT,” page 120 [2]“What Is Strategy? ” Michael Porter, page 109. [3]Case “Otis Elevator: Accelerating Business Transformation with IT,” page 127

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