However, before Schindler could take on that higher-level transformative work, he says the company had to fortify its IT foundation. That foundational work was in two areas: IT rationalization and global business process optimization.
The IT rationalization phase was aimed at standardizing the global IT infrastructure and retiring legacy systems to improve efficiency at the company, which has more than 54,000 employees worldwide (more than 5,000 of them in North America). The next phase, called SHAPE, for Schindler Harmonized Applications for Process Excellence, focused on integrating and synchronizing global business processes and applications. "The overall target was to drive the company toward operational excellence," Nilles says, noting that this project affected the entire company--including finance, the supply chain and service management, for instance.
These were major undertakings and they presented big challenges. "It was a hard and painful journey," Nilles recalls. "We went through a few lessons-learned phases. Because when you're doing such an effort, it's a business transformation exercise. It's about change management. You have to train people, make organizational adaptations so people can make use of the new solutions. All of that's involved."
Schindler officials declined to disclose how much money the company spent on these projects, although Nilles says the investment was significant.
Still, Nilles says he and other company executives realized that any competitor could make the same improvements if it was willing to spend the money. "This gave us a good competitive advantage, but there were other companies that were working on operational excellence. We knew that it could be replicated--it only requires a huge investment," Nilles says. "We were thinking about how to gain a competitive advantage using new innovative and digital solutions that were emerging to achieve a superior customer experience. We asked what that looked like. We didn't want to look into one piece. We wanted to change the way the customer did business with Schindler."
That thinking launched Schindler on the third phase: moving to what Nilles calls a "leading-edge digital business."
Leading digital transformation
Building on the IT rationalization and global operational excellence phases, Nilles and his team capitalized on mobile tools and a confluence of maturing technologies--sensors, connectivity, big data and analytics systems--that collectively evolved into the Internet of Things.
At Schindler, older equipment already in operation has to be retrofitted with connectivity modules, while equipment manufactured in the past few years already comes with the sensors and connections needed to fit into this new ecosystem.
The technology embedded on equipment in the field connects to the company's back-end systems, where an analytics engine handles up to 200 million incoming data points every day.
The technology is a mix of commercial products and systems developed in-house, Nilles says, adding that Schindler's leap into digitization couldn't have happened without innovations from the vendor community, such as cost-effective data analytics technology.