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 year
TEAM 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 ships
TEAM 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 2003
TEAM 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’ Thought
TEAM 4
6. Era of Jack Williams
From 8 to 25 Workforce Modern day External Planning
ships Doubled tools Recruitment Committee
TEAM 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 data
TEAM 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
system
TEAM 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 HP
TEAM 4
11. The Challenge
$8 Million Rapid change,
Do nothing..
infrastructure higher budget
TEAM 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 period
TEAM 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 planner
TEAM 4
