OTISLINE

Consider the time when Otisline was just being thought of. To retain
leadership position, Otis was in desperate need to do something drastic. Do
you agree or dont you? Justify your position.
The elevator industry in North America amounted to $1 bn in equipment sales and $2 bn in services
approximately. Doing a complete Porters 5 Forces Model of this industry we see that threat of
substitutes is high especially in service as customers can easily substitute each other. Bargaining
power of customers is very high as customers have option of choosing between a large array of
options. Bargaining power of suppliers is low as there are not many people buying raw material
for manufacture. Barriers to entry are medium as any company entering now will have to match
the technology of OTISLINE. Internal Rivalry is very high as in both segments there are many
competitors and there is cut throat competition.
Though Otis was the market leader in both sales and service it was a very competitive industry
with 8 major manufacturers. On the service front the competition was more severe as many small
companies devoted to servicing were present. This was primarily due to the fact that service market
had steady demand and high profitability. Thus internal rivalry as stated in Porters 5 Forces Model
was very high. The small service companies even provided service at cheaper rates as compared
to Otis so competing with them on price was not an option. It would result in a price war and
drowning of all profits. This was also a major reason why subsequent service contracts were
received by small companies as the major deciding factor while granting subsequent servicing
contracts was cost of the service. It needed a Sustainable Competitive Advantage to compete
with small service providers. Thus there was a great need for Otis to come up with something that
differentiated them from the rest of the competition.
A Value Chain Analysis of the firm reveals that is needed to improve its after-sales service.
Thus OTISLINE would be a value add to the organization as a whole.

Every large information system brings in changes in some or other aspect(s)

of the organization. What all changes would you expect to happen in Otis
when Otisline is implemented?
We can look at impact of information systems from two fronts:

Impact on Core Strategies

Impact on Core Operations

Impact on Core Strategies:

OTISLINE would allow the organization to respond to customer call backs 24 hours a day. Earlier
commercial answering services were used for non-primetime call backs. This would be a game
changer in the service industry. Differentiating by increasing responsiveness would be a great
strategy as responsiveness is one of the attributes which the customer has a high priority while
 judging a service. Additionally, it would also collect data at a district, regional and NAO level on
the quality of service provided. This would help in tracking the quality of service provided and
trace issues of problems of installation, component malfunctions etc. This would help in reducing
no of call backs per elevator. A reduction of 1 callback per year per elevator would lead to $5
million savings.
OTISLINE would also allow for remote monitoring of microprocessor based elevators. This would
allow for proactive intervention in case of any issues and improve customer satisfaction.
OTISLINE would also have an impact on marketing strategies as well. OTISLINE would provide
data of customers who have service contracts with competitors and when will they expire so that
they can target customers more effectively.
OTISLINE would also help in elevator sales as New Equipment Sales Representatives could
access NES application by calling OTISLINE. NES was an integrated database management
system designed to automate the production status reports on elevator sales prospects.
Impact on Core Operations
On the operations front there would be greater efficiency in data management and retrieval of
customer data as labour and time spent on theses activities while done manually would be saved.
OTISLINE would increase efficiency in all aspects of the providing service be it time required, be
it sales etc. Hence operations as a whole would greatly benefit from this implementation.

Otisline is disruptive for the elevator industry. Explain.

OTISLINE is a huge disruptive in the elevator industry because it changed the way service was to
be provided. It brought very quick responsiveness and high customer quality that was unmatched
during its times and very advanced. Apart from improving customer service it also had an impact
on other functions such as information services, mechanic dispatching, service marketing and
engineering. Traditional Systems became obsolete with the advent of OTISLINE.
In Macfarlans Strategic Grid we would place this in the strategy quarter as the impact on core
strategies and core operations were very high.
OTISLINE had huge future prospects such as remote elevator monitoring, contract management,
in-car phones in mind, hand held terminals, new equipment ordering, telemarketing of services
etc. which would redefine how service is provided in this industry. For example, contract
management would allow the company to abide by customer schedule.
Also OTISLINE would make other players to come up with their own reply to OTISLINE. This
would seriously increase competition however this would be a bane for small service providers
as it would be impossible for them to replicate this technology and hence they would perish or be
reduced drastically in the future market.
Submitted by Group C11

Harsh Mehta 0151/53 Jasmine Sahoo 0167/53 Jigmee Dorgee Sherpa 0170/53 Kathikeyan S 0179/53