Otis Elevator was founded in 1853 and has revenue of $12 billion. CXOTalk host, Michael Krigsman, speaks the Chief Information of Otis, Marcus Galafassi, about the modern technology shaping this well-known brand.

Marcus Galafassi was appointed Vice President, Information Technology & Chief Information Officer for Otis in 2015. In this role, Marcus is responsible for the strategic direction and execution of Otis’ worldwide IT operations. He provides oversight for all information systems and drives optimization and efficiency across the enterprise.

Marcus brings more than 20 years of IT experience with UTC to this position. Previously, he was responsible for driving IT strategy for UTC Building & Industrial Systems (BIS) EMEA, as well as a similar role as Vice President for Information Technology at the BIS Refrigeration unit. Prior to that role, he held positions of increasing leadership across Europe and Latin America at UTC Climate Controls & Security and Carrier divisions.

Transcript

Michael Krigsman: Elevators, escalators, we use these things every single day, but what about the company that makes it? How are these things made, and what's the business like behind the scenes, behind the curtain, behind the elevators? And, when you press the close button, does that actually close the doors? We are going to find out about all of these questions today on Episode #292 of CxOTalk. I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk.

Now, before I introduce our special guest, I want you to, right this minute, tell your friends, tell your family to watch this show and be sure to subscribe on YouTube. Subscribe on YouTube.

Now, without further ado, I want to introduce Marcus Galafassi, who is the chief information officer of the Otis Elevator Company. It's a name that we all know. We all know Otis. Hey, Marcus. How are you? Thank you for being here today.

Marcus Galafassi: Very, very good, thanks. Thanks, Michael. I'm glad to be here.

Michael Krigsman: Marcus, please tell us about the Otis Elevator Company. Tell us how big you are. You're a really, really big company.

Marcus Galafassi: Yeah. Otis is a $12 billion company. It has been founded 165 years ago by the inventor of the safety elevator, Elisha Otis. We are operating in most of the countries in the world. We have 68,000 employees. We have 33,000 mechanics in the field. We support, every year, more than two million elevators in the world. Look at this data; we move, every day, two billion people. Two billion people, yes.

Michael Krigsman: You move two billion people every single day.

Marcus Galafassi: Every day, every single day. Every day, two billion people are touching our product. This is amazing.

Michael Krigsman: It is amazing. As the chief information officer of this enormous enterprise, share with us the scope of your responsibilities and the things that you are working on.

Marcus Galafassi: Yeah. In our digital transformation, we have set up several initiatives. The traditional CIO that's going that way, we are always thinking about the plumbing, the infrastructure, creating the right cloud setup, creating the right infrastructure to run the business, which is, of course, very important.

I think the role that we are doing here when we started this pretty much two and a half years ago, we are going beyond that. We are establishing connectivity to all our field workers, which is pretty much amazing. Again, 33,000 folks in the field are touching our customers every single day. We are making them connected, making the core communication flowing between ourselves and the mechanic in the field.

Also, we are doing a lot of things in the backend, our simplification of our system landscape. Again, this is a little bit more traditional, but the innovation is something crucial for us. We have just launched, two or three weeks ago in the Shanghai Expo in China, our IoT product, our IoT connectivity product, and we are now integrating our elevators with the sensors back to the cloud, making that information available to not only ourselves but also to our customers. That's the innovation piece that our CIO role is moving forward.

Michael Krigsman: As CIO, you're not just responsible for internal systems, but you're actually involved developing systems that affect the product directly.

Marcus Galafassi: Yes. Yes, and I'll give an example. For example, the apps, we have done a lot of apps for our mechanics. These apps, they are apps that are linked to customer experience.

I give you one point. When you have a service contract, and I take my jacuzzi if you want some analogy. I had a problem with my jacuzzi, and I called the service guys. The guys said, "I came." I didn't see anything, right?

Okay. I called back again, and then the guy said, "No, I came, and I fixed it." No, but the jacuzzi is still full. I mean you didn't dry the jacuzzi and the problem is in the pump. Okay.

Then I asked again, "When do

Michael Krigsman: Elevators, escalators, we use these things every single day, but what about the company that makes it? How are these things made, and what's the business like behind the scenes, behind the curtain, behind the elevators? And, when you press the close button, does that actually close the doors? We are going to find out about all of these questions today on Episode #292 of CxOTalk. I'm Michael Krigsman. I'm an industry analyst and the host of CxOTalk.

Now, before I introduce our special guest, I want you to, right this minute, tell your friends, tell your family to watch this show and be sure to subscribe on YouTube. Subscribe on YouTube.

Now, without further ado, I want to introduce Marcus Galafassi, who is the chief information officer of the Otis Elevator Company. It's a name that we all know. We all know Otis. Hey, Marcus. How are you? Thank you for being here today.

Marcus Galafassi: Very, very good, thanks. Thanks, Michael. I'm glad to be here.

Michael Krigsman: Marcus, please tell us about the Otis Elevator Company. Tell us how big you are. You're a really, really big company.

Marcus Galafassi: Yeah. Otis is a $12 billion company. It has been founded 165 years ago by the inventor of the safety elevator, Elisha Otis. We are operating in most of the countries in the world. We have 68,000 employees. We have 33,000 mechanics in the field. We support, every year, more than two million elevators in the world. Look at this data; we move, every day, two billion people. Two billion people, yes.

Michael Krigsman: You move two billion people every single day.

Marcus Galafassi: Every day, every single day. Every day, two billion people are touching our product. This is amazing.

Michael Krigsman: It is amazing. As the chief information officer of this enormous enterprise, share with us the scope of your responsibilities and the things that you are working on.

Marcus Galafassi: Yeah. In our digital transformation, we have set up several initiatives. The traditional CIO that's going that way, we are always thinking about the plumbing, the infrastructure, creating the right cloud setup, creating the right infrastructure to run the business, which is, of course, very important.

I think the role that we are doing here when we started this pretty much two and a half years ago, we are going beyond that. We are establishing connectivity to all our field workers, which is pretty much amazing. Again, 33,000 folks in the field are touching our customers every single day. We are making them connected, making the core communication flowing between ourselves and the mechanic in the field.

Also, we are doing a lot of things in the backend, our simplification of our system landscape. Again, this is a little bit more traditional, but the innovation is something crucial for us. We have just launched, two or three weeks ago in the Shanghai Expo in China, our IoT product, our IoT connectivity product, and we are now integrating our elevators with the sensors back to the cloud, making that information available to not only ourselves but also to our customers. That's the innovation piece that our CIO role is moving forward.

Michael Krigsman: As CIO, you're not just responsible for internal systems, but you're actually involved developing systems that affect the product directly.

Marcus Galafassi: Yes. Yes, and I'll give an example. For example, the apps, we have done a lot of apps for our mechanics. These apps, they are apps that are linked to customer experience.

I give you one point. When you have a service contract, and I take my jacuzzi if you want some analogy. I had a problem with my jacuzzi, and I called the service guys. The guys said, "I came." I didn't see anything, right?

Okay. I called back again, and then the guy said, "No, I came, and I fixed it." No, but the jacuzzi is still full. I mean you didn't dry the jacuzzi and the problem is in the pump. Okay.

Then I asked again, "When do you come back?" "Oh, we'll come back tomorrow." Okay. They came back the next day and they fixed the jacuzzi. But, I had to call the guy five times, five times or six times and text as well.

That's the problem we do have, the customer experience. We go. We do a service in a contract that we have with the customer. The customer doesn't see that I came there, and a frequent question was, "Did you come here and do what was supposed to be done? I didn't get any feedback."

We just launched a very simple digital tool using text as a basis. I'll tell you; the feedback we got was very simple. The feedback we got was great.

Again, when you do apps like these or also to our mechanics that can improve the right quality or can improve efficiency in the field like searching parts that I needed to order, this is a great opportunity where digital is beyond what I would call in a traditional company or the CIO boundary. We are doing things that go beyond our organization.

Michael Krigsman: Marcus, what is it about digital that creates these opportunities to go beyond the traditional CIO role?

Marcus Galafassi: I think, if you recall some examples, again, the sensors data is one thing that is pretty much addressing a lot of opportunities for us. In these two million units, from a contract standpoint that you have in the globe, we more than 300,000 connected today. We are harvesting this data from a sensors standpoint.

I think you talked about pushing the "close door" button, right? I bring the example of this "close door" push button. One of the major issues we do have in elevators is doors. Why? Because people are rushing in the day and try to arrive and then see the door closing. They try to hold the door. Then holding the door, again, affects the mechanisms we have, I mean the components we have in the door.

Sensors, we have put sensors in the doors, and you can understand that, throughout the whole data history, how much can you predict on this kind of sensor information, and how can we anticipate services to be maintained? Again, sensors providing this kind of data is very rich. If you look at doors, again as I said, 60% of unexpected services are caused by this type of failure. If you can bridge the technology, the digital IoT capability along with the data analytics, it's a very powerful technology for us.

Michael Krigsman: How did you make the transition to this digital view of the CIO role? I think change in any organization is very hard.

Marcus Galafassi: Yeah. Michael, again, it depends on the market. It depends on the company culture. I think technology is one piece, but we need to go along with the people and, of course, processes. The whole, combined, makes a difference.

But, when you see traditional things that you have done in the past, I think technology has evolved a lot. You go to the U.K., for example, as a data point. Nobody browses anymore in a traditional laptop or desktop. People are using mobile. Mobile is something that came very, very fast. The capabilities are available in the power of your hand.

Having these kinds of technologies in the marketplace, along with the opportunities that you can address in your company, you can see the two combined. I think that's one of the major, I would say, inputs for us to look forward.

Again, remember, 33,000 techs in the field. This is the largest technician population in our industry. Every day, they are in the field. If you could put digital technologies to help them, along with the right processes, this is great.

We have done more than that. In our deployment for these 33,000 techs, we have now 17,000 done. We have established a very strong network in terms of change management. We have more than 1,000 people that know how to support the technicians in the field. They know how to help them to sort the problems out because, again, mobile for me is easy but, from a technician that has worked 30 years in the industry, it's quite a challenge.

Again, that's an opportunity, I would call it. The technology has been evolved. I think the CIO has an opportunity and has to take this and move forward.

That's what we did two and a half years ago. We established a very nice strategy to transform and support our digital folks in the field. Then, of course, we're evolving for IoT moving forward and clean up the baseline, our backend in the company as well.

Michael Krigsman: This transformation, correct me if I'm wrong, it sounds like there's a technical transformation that you made and the implications, therefore, were on processes [and] on your employees. What were the business drivers, the reasons that you made these technology changes?

Marcus Galafassi: Yeah. In our particular case, we had a lot of market assessments in the last two, three years. Again, back to the customer experience. If you recall my jacuzzi example, we had customers, and we have done a lot of assessments in Europe, mainly because Europe is our mature market from a services standpoint. Again, most of the comments and what matters from a customer's standpoint is information. How can I make the information available to our customers, and how are they taking that information and, of course, helping them to drive?

I have a situation, for example. It's a true case where a customer told us, "Look; I have one person that walks every day in the morning, in the afternoon, in the night."

I ask, "Why? Why have this? To do what?"

"Just to walk in every level of my building and check if the elevator is running."

Can I believe that? So, again--

Michael Krigsman: Wow.

Marcus Galafassi: Yeah, so we have a customer that's telling you, "I have one person from my building walking every single day, every time, to check if the elevator is up and running."

Again, if you can connect the elevator, get the sensors, predict if it's going to be broken, or even more as we showed in the Shanghai Expo, we have what you call a customer view. We can show, in a dashboard, all the units that belong to the customer. Actually, the name of this is called the Campus View.

Instead of having the person walk and seeing if the elevator is down or is up and running, he can see the dashboard, and he can see it on his mobile, so think about it. Again, that's the way that you address customer experience. That's the way that you address the communication that was missing in the past. That's what the customers are looking for.

Michael Krigsman: The goal at every stage, both for your external customers, it sounds like, as well as your internal stakeholders, such as service people, the goal is to simplify. Would it be accurate to say simplify their relationship to the equipment, to the elevator and its components?

Marcus Galafassi: Yeah. We have a lot of technologies, back to your previous comment. I said the technology is evolving every day. Thanks for it. [Laughter] We really appreciate technology. But, these 300,000 units, I told you some of them are still connected in an old-fashioned way. I would say ISDNs or corporate-based telephone lines. They're still getting the sensors data.

But, when you look at these technologies and you see the data around the technology, we can still apply, I would say, analytics on top. We can still apply data patterns around that, and you can still have information helping us and us helping the customer. Definitely, one of the major points that we have done in some of the apps that we have built around is to improve the right quality.

In the past, we used to have a technician come if a Motorola broke, as I call it, you know, then connect a cable and hooking the cable into the control board. Okay. Now we have a wireless dongle, and I can connect even in the lobby without even touching the control board in the elevator machine area. That's one thing.

It improves safety as well, by the way. I don't need to have a technician downloading all the data associated with failures or potential failures. I don't need to touch the equipment. That's my point.

If you go and you connect to that elevator with 3G or cellular, this can be done in. We cannot say in the McDonald's shop, but we can do it through wireless for the Internet. Again, that's the power of the information.

All of this is in the cloud. We started cloud four years ago here at UTC, our parent company. We are the pioneers of the cloud in our business. Again, I think that's the powerful information in the cloud at the hand of our technicians and at the hand of our customers. I think that's pretty much our vision.

Michael Krigsman: I want to remind everybody that we are speaking right now with Marcus Galafassi, who is the chief information officer at Otis Elevator Company. You can participate on Twitter. You can ask questions. There is a tweet chat taking place right now.

Marcus, we have a question from Twitter by Joanna Young who is a very experienced CIO. She's been a guest on this show. She asks an interesting question. She's been watching, and she says, "What approaches do you use to support technology improving result achievements or business outcomes such as Lean management, L6S, Agile, DevOps, anything else? What advice do you have for CIOs who are grappling with all of this kind of mess of different approaches?"

Marcus Galafassi: That's a great question. We started two years ago, Agile methodology. We learned a lot. It's not easy coming from a traditional waterfall into an Agile method. I mean the learning process, what it means to split into scrum teams. How can you put it all together?

I think the great news on this is, again, the technology has evolved a lot. I was a COBOL programmer. Don't ask me when I was. It was a long time ago. I remember I was sitting along with the other guy asking, "Can you do a report like that?" Then two weeks after, "Oh, by the way, I missed this."

Again, it was kind of, you come; you ask me what you want. I think I know what you want. Then I do something. After, you just realize it doesn't work.

Waterfall is over, from my point of view. I think we can still use some waterfall technology or process to help us address, I'd call it, traditional IT systems. Some ERPs still require that. But, what we did, we actually have a very strong process with our parent company, UTC, and it is across all our business units. It's called ACE, achieving competitive excellence.

ACE has one of the tools called passport review boards. It sounds very bureaucratic, and sometimes it can be bureaucratic, as long as you want to. But, what we have done now, we have merged some of the key fundamentals and what is a PRB, as you call it here are, at the end of the day, milestones. I need to have a minimal design. I need to have a gateway. After the design is done, what's my build? After my build is done, what is my outcome that goes for production?

What did was merge the key gateways along with Agile to make sure that we would be fast with a sprint approach, creating scrum teams, but also controlling the quality throughout the process. These four apps, I think, work very well. We did eight apps in one year, pretty much. We deployed 17,000 phones, 17,000 mechanics, with an ecosystem using iPhone, and our MDM is AirWatch, pretty much in the same time, a year and a half. It was very, very aggressive, and we see the methodology helping you, like DevOps or Agile. That's crucial.

If you want to go digital and you want to do it fast, you need to have, of course, some change management along with your customers, internal or external. Again, external, we are having a lot of experience bringing some key customers to attend some of the sessions and providing feedback in the design. I think that's the evolution.

Another important thing, we started this pretty much alone. A year ago, UTC, UTC Digital--UTXD, as we call it--has launched an accelerator in Brooklyn where some of these capacities were not present there at all. We started, again, an hour away from a notice elevator standpoint, but the capacities like design thinking, ideation, incubation, product management, not project management, product management and, of course, analytics. We are creating these capacities inside the house. You can go and show off the results outside, but I don't think it's healthy.

If you want to just really turn your company digital, you need to have this kind of capacity. You need to have a design and thinking process. You need to have Agile, DevOps. You need to have product managers taking care about the product evolution, the digital product evolution throughout the period. And, of course, in AI, analytics are components that can help you improve and enhance the product. Again, it's a mix of methodology, capabilities that you need to have in-house, and you need to foster this more and more and more in our IT organization.

Michael Krigsman: Your organization, Otis Elevator, is what, 100 years old?

Marcus Galafassi: One hundred and sixty-five.

Michael Krigsman: One hundred and sixty-five years old, and so how do you drive this kind of change in an organization that is so old and so well established?

Marcus Galafassi: Yeah, that's a very good question. I was before our president and talking the other day. It's, again, not all about technology. Technology is great, but it's technology; it's people; it's process.

I think, what you have done, we addressed a very strong champions network to help us achieve goals. I'm talking to the apps aspect now. We have 1,000 champions across the world. I think these people have been trained. These people have been fundamental to help us turn this. I call it adoption because it's really adoption.

You can give a very nice phone to a technician, and he can YouTube. He can do this; he can do that. But, at the end of the day, you want them to use the apps and make his life more efficient, the customer's more communicated, and the experience better.

The key fundamental point is if you go to this technology and if it's 165-year-old company or if it's a 6-month old company, it has to have a change management concept in place because, without that, the technology itself is not going to help you. People have to adopt. If people don't adapt and adopt, then you have a problem.

I'll take another example. You see these banking apps or all the other apps. My children love to download apps. I have this one phone that gets everybody together. [Laughter] It's a mess. Every day, I'm trying to delete the apps they downloaded.

Sometimes you use one app, and then you're never going to use it again. Then the people are going to ask, "Why? Is the UX/UI bad?" I don't think so. I think it's really sometimes people are going to use that app only for that period of time or that need.

We need to be careful. Sometimes we still think in the old-fashioned way. We do an app like an ERP. Are they going to use it forever like that? No. In this world, everything changes. If it's good today, it's bad tomorrow, we need to do it again and again and again and again. That's why Agile is very important. That's why sprints are very important. If you don't do that, then there is no digital in place.

Michael Krigsman: You've just raised a whole bunch of interesting issues. We have a question from Twitter, which I'll get to in a moment because I want to take the moderator's privilege and follow up with my own question before we go back to Twitter.

When you were talking about change management earlier, how is change management today in the digital world different than historically? Historically, change management was, well, we're going to send a newsletter to everybody so that they know that something different is going to happen. Today, it's different. How is it different today, change management?

Marcus Galafassi: Yeah. Again, it's nice. I remember my first CRP implementation, I think in '99 in Argentina, was SAP. SAP, at that time, you needed to do a very lengthy description of what you want called a blueprint. Great. Okay, maybe great for that time.

Michael Krigsman: Hey. I don't want to interrupt, but I have to tell you that those tools, ASAP, Accelerated SAP, the QADB, and the business blueprint generator, a company I was running created all of those tools for SAP back then.

Marcus Galafassi: I'm not going to say anything bad about it.

Michael Krigsman: Not the methodology. [Laughter]

Marcus Galafassi: [Laughter] I'm not going to say anything bad, but thanks. [Laughter]

Michael Krigsman: [Laughter] Which now I'm dating myself. Anyway, I apologize. I interrupted you, but you were just talking about my child, my baby. [Laughter]

Marcus Galafassi: [Laughter] Again, I think these tools and this process, they were right in that time. I think, back to your question, if you can merge some technologies or processes, again, I think the whole point is back to my experience in SAP. We were doing this, and it was okay; traditional was out.

When you go to apps, this has to evolve time-to-time. It is not something that is going to be simply designed for once and forgotten. I think, Michael, the technology has evolved a lot in that perspective. When you see the technology evolving, it brings the processes. The newsletters that you used to send in the past was even typed, if you recall. It was the Word 5 or WordPerfect typed, and then you send. You put it in the outbox, and someone is going to collect and distribute.

Today, the power of the technology is so high. We have a put Yammer as part of our suite here. Today, Yammer is our communication tool. I'm not sending email anymore. Email is more and more becoming obsolete.

I use my children as a baseline. I chat with them. I don't send emails to them. They don't even have an account. [Laughter] The generation now is Snapchat, and they have to Snapchat you. I have to Snapchat them. Then that's the way we communicate.

Internally, here, back to the original question--sorry to deviate a little bit--again, the power of the technology, we need to use that and make the right usage to improve change management in the communication. It's so nice. I've got another example that our service leader gave me, and I was very happy about it because we deployed along with these 1,000 champions in our change management network. A lot of communicates decided on our Yammer setup.

There was a guy. I don't remember his name. A mechanic, he was having a problem. It's like China time zone back to California time zone. The guy was typing in Yammer. He said, "I have a problem, specific problem with this setup in this machine with this control board," and so on and so forth. A guy overseas, he answered and said, "Look. I had the same problem. By the way, I did this."

Think about the power of this. This is a true change management. [Laughter] It's a tool that is across the board. People are talking to each other virtually. They don't know each other face-to-face. They never met each other face-to-face. But again, that's, for me, the power of the technology. But, we had to create this network because, if we don't create the network, if we don't create the right groups, we just can create, as they call it, a little bit of confusion, you know. We need to use the right technology to help and evolve the newsletter to type it once in a true, digital communication.

Michael Krigsman: Change management today, actually then, is community. It's creating the environment where people can collaborate. That's change management.

Marcus Galafassi: Yes.

Michael Krigsman: That's modern change management.

Marcus Galafassi: Yes. Pure collaboration. Pure collaboration and you have done some tooling as well, some tools where our mechanics, if they have a problem, they can call an expert. They can Skype themselves. They can show on the phone where the problem is, and someone is going to help them to address the problem.

Again, before it was someone trying to call someone. We are digitizing all of our technical information, which is the basis for searching parts and everything else. In the past, we used to have binders in the trunk, and you go back to the trunk in the car. You open it up and see what's the part I need.

Again, definitely technology helps change management, but we need to organize that and structure that properly and have the right champion network, have the right expectations how to use the technology, what can be done, what cannot be done, [and] create the collaboration. Collaboration is key. I think the technology helps, but if you don't organization and have structure, then it becomes another app that is not going to be used.

Michael Krigsman: Well, I really appreciate that explanation because I've been wondering and thinking about it for a long time. What is the meaning of change management today? I think you've summarized it better than I've seen or heard anybody else does that.

We have an interesting question from Arsalan Khan on Twitter who asks about your metrics. What are the metrics that you use to evaluate and ensure that your digital strategy is taking hold across the organization?

Marcus Galafassi: Yeah. I'm not talking about KPIs from a business standpoint. This is, I would say, a complex metric that you have to address adoption. Let's talk about adoption metrics.

We have adoption metrics in terms of usage of the apps. We have a process also to collect, in our incubator, ideas that ties, again, with the KPIs that we have established.

I think one of the main concerns, along with the change management, is how can you drive adoption? Adoption, again, is relative. It depends on the person's experience, the person's expectation, but we have set up very nice KPIs around how the apps and the usage of the apps have been, on a monthly basis, collected.

We revisit that. We have, of course, an organization which, pretty much, if you take North America, are the regions. Inside the regions, we have the branches. At the branches, we have a supervisor. A supervisor is with the technicians.

We are making the information visible, meaning that if a mechanic is not using or, to better say, using the iPhone only for Twitter or the iPhone for only YouTube, we're going to see it in the sense of, okay, there are other apps that are not being used. We can, with our ecosystem, manage this properly. We're going to have these KPIs sorted and populated to the supervisors.

We want to have a lot of education around that because it is not to go and say, "Look, you have not used that." It's more the point that, why are you not using it? Understanding the why and what is driving the need here and there to improve, I think that's the key fundamental benefit of these KPIs.

Then, if you go to business metrics, we have business metrics that are pretty much defined again to improve the customer experience and to improve our mechanic's efficiency in the field. We have built the whole ecosystem around those principals. We are tracking that.

Of course, it is not a rosy picture. It's not a sunny day every day. People have ups and downs. We have some apps that we have a very exciting day and everybody [says], "Oh, let's use it." Boom-boom-boom-boom-boom, it was like a rocket to the sky. Then one month after, poof, down.

Again, I always use my children as an example. They download the app. They use it on the first day a lot. [Laughter] Then the next day, what's the next step?

Again, how can you go back and use these KPIs to bring the usage back and understand what are the problems to improve or even get rid of them? I'm not married to the eight apps forever. I told you. I want maybe the eight apps replaced by another eight apps or maybe eight apps consolidated into four apps or maybe more apps. That's, I think, the evolution of the ecosystem is the evolution of the KPIs that are going to give you more data points and then, of course, the digital transformation evolution.

Michael Krigsman: When you're thinking about enterprise apps, it sounds like you're rethinking the role of apps and the way that apps are being used in the field. It sounds like that's really fundamental to your thinking.

Marcus Galafassi: Yes. Yes, and we are using our accelerator in Brooklyn. We are now launching our V2, and I will try to get more speedy on the versions or the sprints. We did the apps, as I said, last year. We are doing another V2 this year really to address some adoption issues we have using these KPIs collected.

But, again, we have a process in place. We have improved it with a lot of design thinking and improved the UX, the experience. We are trying to combine some of the apps to have the right business flow or process flow from a mechanic's standpoint.

I think the key fundamental and, again, back to the traditional CIO or traditional IT versus a more digital approach, we needed to map personas. We needed to map our ecosystem where these personas are going to use these and for what purpose. Usually, I mean traditionally, we have not done it in the past. So, I need to put myself in the shoes of a mechanic, and I need to in a hoistway, which has no cellular communication at all.

When you build up an app and think, "Oh, an app is great," oh, but there is no offline capability. Okay, I think it's a big mistake, right? You are in a building, in a hoistway, completely closed, and there is no network coverage. You cannot build up an app thinking that the app is great if there is no offline capability.

We need to have, again, the persona. You need to put yourself in their shoes and have the right empathy to make the right process, the right tool, the right app for them.

Michael Krigsman: It sounds like you've redesigned IT from a technology standpoint but, more importantly, from a business standpoint, really, really thinking about, what are the implications for your customers for your users at every step.

Marcus Galafassi: Yes. Yes, and again, the great partnership is along with our business leaders here, service, our sales organization as well. We have a digital stream for sales that we're ramping up now. Again, it's not myself here trying to drive everything from my desk. It doesn't work like that, as we always know. I think the partnership, along with our business leaders, our leadership, is fundamental.

Again, when you talk about Otis, our president asks us and wants to have us thinking that way. Everybody has to think digital. I think that's great to have 68,000 people in this organization. Think about the power of everybody thinking in a different idea every day.

I know they're going to be busy. [Laughter] But, I figure, aside that part, I think it's great.

I think another point, again, talking about IoT and how the technology has evolved, engineering, R&D, I have myself a very close relationship with our engineering. I don't see, today, how engineering can be completely aside to IT or DT or digital technology.

When you design a product, and I talk about an elevator, we need to think in that perspective as well. How can we integrate the sensors? How does that sensor go into the cloud? What are the AI opportunities we have around that? Can I put Alexa to call the elevator? Yes, of course, you can, and we did it, by the way. You're more than welcome to come here and visit us in our Bristol Tower.

Bristol Tower is in Connecticut, in Bristol, and it is the highest tower in North America. We have a prototype of that we show to customers. They love that. Again, these kinds of ideas, that's what you want as a spirit, as a digital company.

Michael Krigsman: The driver of this transformation is coming right from your CEO.

Marcus Galafassi: Yes. Definitely, yes. Definitely, yes. Again, it is across our service lead, our sales lead, our finance organization, our CFO, legal counsel. Everybody is involved. We have a true partnership where we have to have, and that's great.

I think, again, it's the market. It is the company momentum. It is the opportunity that you have talking about. But, of course, it has to have the right sponsorship. Trying to become digital or turn your CIO traditional role into a digital role has to have the right sponsorship. We are very happy and glad to have this in our organization.

Michael Krigsman: As we finish up, we have another question from Twitter. I know you spoke earlier quite a bit about IoT, but we have a question. "How are you using IoT to improve the company's business? Is it for customer experience?" More specifically, how are you using IoT and why?

Marcus Galafassi: Yeah. I mentioned before the Campus View, which is one of the customer dashboards that we have presented in the Shanghai Expo. The Campus View gives you how healthy the customer fleet, the elevators, are in their respective building.

You can see the available red and green dots. Why it's red is because we can have an elevator or the unit down, shut down. Also, you can see, and you click. It can start to turn green to yellow, yellow to red, and you can move the time. The time means I can move ahead a little bit and see in three months that yellow becomes red. That's what we can see. Of course, the customer has the information available.

Back to the question. We are using the sensors data. We are feeding off this data in our cloud. We have done a condition-based maintenance to predict using, again, doors as 60% of our call-backs, as you call it, or unexpected visits are driven by doors problems. We have done very well, along with engineering and our research center here, prediction in how these patterns of failures could happen and then how they would happen. We can anticipate that failure. That's what addresses not only deficiency in our site but, also, we prevent to have a unit in a shut-down mode, which is the worst thing that can happen to our customers. Customers need our elevators 100% of the time up and running. That's pretty much the whole business value we see with IoT in our case.

Michael Krigsman: I have to ask you one final question, which is the door close buttons. Do the door close buttons actually work on elevators, or are they just fake kind of props?

Marcus Galafassi: Okay. That's a very nice question. If the customers ask you to shut down, we're going to shut down the button. Okay? [Laughter] That's a customer request.

Sometimes we do it on purpose. Remember the story I told you. I'm rushing getting into the building, and then, oh, you know. The worst thing can happen is the guy doing that. The second worst thing that can happen is the guy pushing the open door because this is a movement for the engineers attending the broadcast today.

The doors are kind of like this, and then we have momentum. The whole mechanics have to go back. If you have some extra strength, it's even worse.

We don't like it because, again, this turns the momentum of closing the door completely interrupted, so we don't like it. It can be perceived as a fake button. [Laughter] But, again, I let you judge that. [Laughter]

Michael Krigsman: [Laughter] All right. Well, what an interesting and very fast conversation. Marcus Galafassi, thank you so much for taking the time to be here with us today.

Marcus Galafassi: Thank you.

Michael Krigsman: We have been speaking with Marcus Galafassi, who is the chief information officer at Otis Elevator. What a great, interesting discussion this has been. Once again, tell your friends to watch. The replay will be up there very soon. Don't forget to subscribe on YouTube, everybody. Thank you so much and have a great day. Bye-bye.