Otis Elevator looking to IoT, digital transformation to provide a business lift

Marcus Galafassi was named VP of Information Technology and CIO at Otis Elevator last October, joining the company at a critical time as the venerable firm is looking to make a large investment in technology to improve customer service and pave the way for new capabilities.  Network World Editor in Chief John Dix recently talked to Galafassi about the big picture plans.

I understand Otis has some big digital transformation and IoT plans in the works.  Tell us about that.

I’ve been with United Technologies for 23 years, but when I had the opportunity in late October to come to Otis to lead IT I was excited because of the transformations that will be made possible by the biggest investment in engineering and information technology in the 160 years of Otis’ existence. 

In RD we are looking at a 25%-30% increase in spending, and for the information technology to support the transformation we are investing a considerable amount over the next five years.  I cannot disclose the figures, but on a year-to-year basis I would say the investment in RD and IT together is 40%-50% more.  It is a considerable amount of money that the leadership has dedicated to the transformation and digitalization strategy, to support the product evolution, to support the evolution of the customer experience. 

We have 31,000 technicians servicing two million elevators across the globe and these elevators are transporting around two billion people every single day.  So we have two main goals to address:  One, improve productivity by instrumenting our 31,000 technicians worldwide, and two, connect our elevators so we we can offer new capabilities to customers and so we can apply data science to improve service. 

Are any of your elevators connected today?

Yes.  Out of the two million elevators more than 300,000 are connected today with a technology called REM (Remote Elevator Monitoring).  We collect several pieces of data, including information about how far the cars have traveled and information about malfunctions … like a door failing to close or open all the way.  That signals an alarm, of course, but once you have collected this data you can apply data science and start to create a model to predict future failures and send a technician to fix a problem that isn’t even evident yet. We can also do that for elevator wire ropes, although that is more complicated to predict.  But what you want to do is collect data about the health of all the electronic and mechanical components so you can anticipate anticipate failure and service requirements.

What changes going forward?

We’re collaborating with ATT to move to a global SIM card for wireless connectivity of our elevators, creating a machine-to-machine (M2M) network that replaces the connectivity we have today. All of these will be managed by ATT’s portal, giving us full control of the elevators.

Also ATT and Microsoft have several APIs that will facilitate the extraction of data so we can design more apps to take advantage of the information collected. That’s pretty much why we selected these two companies -- ATT gives us network coverage on a global basis, Microsoft is our CRM partner and can help us build apps, and they partner with each other, too.

Do you start by upgrading the connected elevators to SIM cards, or use the tech to pull new machines into the network?

Page Break

We don’t have a precise roadmap yet, but we’ll probably start where we don’t have connectivity today.  We’re going to have a proof of concept (POC) in North America and move to Japan as well.  I don’t want to network them just to connect elevators. We need to have an additional portfolio opportunity. We need to prepare a roadmap along with our marketing strategy, sales strategy and of course engineering, but from a future products standpoint we are already designing elevators to be connected through M2M.  This product evolution is going to play out in the years going forward.

Can you give us a glimpse at the capabilities you expect to enable?

End-to-end connectivity makes many things possible.  In Europe, for example, we have already launched eView, which is an interactive, multi-display system in the elevator that can be used to broadcast information and also support interaction with elevator occupants.  If a person is trapped, we can use the system to communicate with them. This is a new product and obviously it relies on connectivity.

So if my car is stuck I hit a button and you can open up a video connection with me?

Exactly.  And we can also use the system to support marketing purposes in each car.  You can broadcast the weather, broadcast news, whatever.

Is that a potential new revenue stream for the building owner?  A way for them to charge advertisers that want to reach these captive audiences?

That’s revenue the building owner can collect.  That’s an extra for them.  But of course there is more.  Another capability we’re working on is eCall, which is a smartphone app that can be used to call an elevator.  So this, again, is interactive and requires connectivity to the elevator.

How do I benefit using an app to request an elevator?

You don’t need to go to the wall and press the button; you can use the app while you are walking.  That’s one thing.  But what you’re really looking for is the ability to predict.  The elevator is going to know you are going to floor five because you’re a subscriber and always go to the same floor.  So, in the future, it’s going to see you approach and know where you want to go without you pushing any button.  That’s the technology that’s going to evolve.

So it will use some form of near-field communications to see I’m approaching?

That’s the idea. It’s John coming and he goes to the fifth floor every day.  The phone is going to communicate to the elevator and drop you at the fifth floor.

eView was launched in late March and we are now ramping up for customers.  We’re pretty much targeting eView and eCall at the European market first because we’ve had some contract erosion there and this is one of the tools we are using to fight back. 

Ok, so that’s the connected elevator.  You said you’re also teaming with ATT to connect your 31,000 technicians?  Are they connected in any fashion today?

Only 8,000 out of the 31,000 technicians have phones today, so it’s a massive change of management in the field.  We are issuing smartphones to all of them as part of our strategy.  The goal is to increase productivity and improve customer stickiness. 

By putting technology in their hands it will improve productivity by giving them fast access to spare parts lists, understand part numbers, and even help with visualization by taking a picture of a part that is broken and and then issuing it back over the supply chain to be sorted out.  There are a lot of things we will be able to do.

And then on the customer stickiness front, we will have apps to improve customer experience, like improving basic communications so they know where their technician is. We actually have 12 apps planned that have to be sorted out in the next year in terms of strategy.  All of them are related to productivity or customer experience.

So you start with connectivity by giving them a device and you build on that platform?

Correct. Our goal is to get everything ready by the end of next year.  It is a big undertaking because we have to build the apps and we have to have the right content management system in place.  We operate in more than 200 countries and territories, so we cannot just have an app in English. Technicians don’t speak English in Italy, France, Spain, etc.   And we have logistic centers in Europe, in North America, in Asia, and we have to have the right part numbers for the right parts in each location, so it’s complex. 

We call it the global Web from a technology standpoint, but there has to be local content management, there has to be support for the local language.  That is why it takes a while to implement this technology.

That sounds like a nightmare.  So you update it in one location, then you have to replicate that around the world?

Exactly.  It’s a global challenge.