Schindler Group moves 1 billion people a day. Most of those people go up and down via Schindler elevators and escalators operating in over 100 countries. Some use the company's moving sidewalks at airports. But it's not just the mechanical systems--the nuts, bolts and belts of its machines--that keep people moving. The Switzerland-based company has become increasingly reliant on its digital systems to ensure smooth operations, and today its digital organization is as critical as its mechanical one.
Schindler, the world's second-largest maker of elevators and escalators, behind Otis Elevator, has been undergoing a digital transformation for several years. Leaders at the 141-year-old company saw the need to do more than improve the mechanics of their equipment; they say they had to make both their equipment and their employees smarter, in an industry that is highly competitive but also has great growth opportunities.
CIO Michael Nilles has been instrumental in positioning the $9.3 billion company for future growth by leading--in concert with other business units--a digital transformation that includes connecting to the Internet of Things and deploying mobile technologies to do the job.
Michael Nilles, CIO of Schindler Group.
"Digitalization is something that's impacting our top and our bottom line. At first it was bottom line, but it's becoming more and more important to growing our top line," Nilles says. "The big investment is paying off. You can't just replicate this in another company."
The market opportunities are significant. The overall global demand for elevator, escalator and moving walkway equipment and services will reach an estimated $111 billion in 2017, rising 5.6 percent a year, according to The Freedonia Group. Industry analysts say that the big growth drivers are urbanization and high-rise construction projects, especially in regions such as Asia and the Middle East. China is a major battleground.
Schindler competes fiercely with the other members of the elevator industry's Big 4--Otis, Kone and ThyssenKrupp--not only for new elevator installations and upgrades but also for maintenance and service deals. Maintenance accounts for half of the Big 4's revenue and (because of its higher profitability) about three-quarters of their operating profits, according to Credit Suisse analysts.
Greg Ergenbright, president of Schindler Elevator Corp., the U.S. arm of Schindler Group, has been a key partner in the journey to the digital enterprise. He says digital transformation is helping the company win and retain customers--and thus capture a bigger share of those growth opportunities.
Greg Ergenbright, president of Schindler’s U.S. unit.