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Caribbean cruises IT strategy an analysis
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Caribbean cruises IT strategy an analysis

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  • 1. Royal Caribbean Cruises Ltd. IT Strategy
  • 2. Company Background • RCCL sailed across globe• RCCL – Founder, Edwin W. Stephan in 1969 • Avoid Too much homogenization• First office – Miami (HQ) • Silverwhere program – Cost same• Song of Norway in 1970 – 724 capacity irrespective of the number of ships• In 2003 – RCCL was the number 2 company • RCCL offers – Royal Caribbean stands behind Carnival Cruse Company International(16) and Celebrity Cruises.(9)• 27 million passengers per yearTEAM 4
  • 3. Industry Background • 9/11, SARS, War in Iraq, uncertain winter and• Ranked 2 in industry. spring in 2003 • Deployed Ships to US port in addition to Miami• Carnival Corporation – 13 Brands and 66 • Price cut due to geopolitical uncertainties, ships. weakening economy, increased capacity• RCCL – 2 Brands and 26 ships • Last minute deal to fill their berth• Norwegian Cruise Lines - 3 brands and • Pressure from agents on 15% commission 18 shipsTEAM 4
  • 4. Industry Background • Travel Agents input – specific cruise options,• Distribution selected itineraries to fit customer need. • 98% of booking were done through Travel • 5 call centre – Miami (400), Wichita (500), Agents London (40), Oslo (10), Genoa (10) • 50% online – 50% call center • No Growth / Low Growth • Cruise is opposed to an air ticket • Industry wide supply of berth was increasing• Cruise Match 2000 - RCCL the first to provide • Stock price dropped from $34 in may 2002 to areal time fully automated reservation system $20 in March 2003TEAM 4
  • 5. Corporate Strategy • Enhancing the guest experience• Core proposition • Silverwhere Program• Reducing cost • Internet Cafes • Shore excursion booking system • Debark Card • Supply chain issues • Increasing revenue • Variety and Logistics • Internet Cafes • Connectivity • Shore excursion booking system • Planned maintenance • Replacing diesel engines with gas engines • Food & beverage • Williams’ ThoughtTEAM 4
  • 6. Era of Jack WilliamsFrom 8 to 25 Workforce Modern day External Planning ships Doubled tools Recruitment CommitteeTEAM 4
  • 7. IT @ Caribbean • Two sided challenge that Jack Williams, COO• Until 1997 faced: • Technically focused remote unit • To change what IT was doing ! • Seen as a standalone unit organizationally • Integrate it with firm’s real needs !! • Regarded poorly by other departments • Thomas Murphy, CIO • Lacked vision or strategy • Started developing its own software packages, • Mission: Shake things up at a 2.9 billion $ which were not so great organization and bring it into the digital world. • No email connectivity and access to dataTEAM 4
  • 8. Murphy’s Strategy • Leap-Frog Project • Quantum leap forward in IT’s support to business• Serve IT customers @ 110 % [ Customers -> BU’s ] • 3 main IT projects: • Supply Chain automation and simplification• Leverage IT to have a competitive edge • JD Edwards , One World• Fired managers who showed a “ already tried • Employee Systems before” attitude • PeopleSoft Shoreside -> Crew management• Recruited people with a “ can do “ attitude • Customer• Time management processes & PMO set up • NexGenRes, 50 million $ web enabled reservation systemTEAM 4
  • 9. 9/11 Impact • Back to basics: Oct’ 01 – Nov’01• Impact of 9/11 - Bookings down by 50% • Bringing back email and network services• Three options • Reconsider Leapfrog.• Survive and Thrive• Shelf the entire process except small part of • Restart: November’01 and on supply chain • Jumpstart, would be number one.• 33% of IT staff and 90% of contractors layoff • IT Projects broken down to meet cash flow• IT budget 83 million to 42 million objectives.TEAM 4
  • 10. IT Operations • Five year view• Florida – Operation centre • Access data anytime, anywhere• Miami – Primary Data centre • Consolidate and simplify systems• Armonk – Disaster Recovery • Peoplesoft and other packages• 20 servers per small ship • Flexible and self healing systems.• 40 on newer ships • Focus on centralization – meeting customer• 295 servers offshore and business requirements.• Partners – IBM, Compaq, CISCO and HPTEAM 4
  • 11. The Challenge $8 Million Rapid change, Do nothing.. infrastructure higher budgetTEAM 4
  • 12. $8 Million Infrastructure • Migration possibility• IT conservative • From Conservative to Competitive• Legacy system dependency advantage• Policy of layoffs • Balance the impacts happened during 9/11• Employee Morale • Flexible to dynamic customer requirements.• Economic crisis on the brink • Achieving leapfrog objectives.• Low growth periodTEAM 4
  • 13. Rapid change, higher budget• IT is not core competency • Can reach more customers than current• Chances of loosing out to competitors process. due to high investment • Edge over competitors.• Can be invested in core business • High cost saving that will lead to• Fall back process will be tough achieving organizational goals.TEAM 4
  • 14. Observations• IT has become a strategic defence. • Ramped up from the 9/11 impact.• Late to embrace technology • Clear objectives for IT implementation• High investments in IT along with high • Aligning business and IT in a line risk. • Transformation of service into• IT is not given primary focus. commodity through IT.TEAM 4
  • 15. Current Scenario• Online check in - credit card and cash account• Cartoon characters – E.g. madagascar, kungfu panda• Cruise tours• Pre cruise plannerTEAM 4
  • 16. Royal Caribbean Cruises Ltd. IT Strategy