1. INFO395 Calypso Business Case
Team Cobras
Anchidtha Limsongprot - 300223606
Frank Wang - 300215837
Gabrielle Heger - 300080975
Jason Dunn - 300229773
Nicholas Barrett - 300219310
Tutorial Time: Friday 12:40
Tutor: Balsam
2. TABLE OF CONTENTS
1 Executive summary ...........................................................................2
2 Business Driver ..................................................................................3
3 Possible Solutions..............................................................................4
4 Investment Objectives.......................................................................5
5 Benefits, Measures and Owners........................................................5
6 Costs..................................................................................................7
7 Risks...................................................................................................8
8 Implementation...............................................................................10
9 Appendicies.....................................................................................13
10 References....................................................................................16
3. EXECUTIVE SUMMARY
“Large enough to carry several warehouses of goods in one journey, container ships are
figuratively—and literally— keeping our economy moving. But as demand for goods and
services has weakened, so traditional ocean transportation operational practices are being
called into question. How can ocean carriers stay afloat in turbulent times while remaining
poised for a rebound?” (Accenture, 2013) This case looks at Calypso Shipping Group and the
difficulties they have faced in the turbulent economic climate over the last decade. Key issues
have arisen consisting of decentralized structure and a culture of independently managed
business units; report taking too long to produce; no clear visibility of data to the top
management; information is missing, inaccurate and falsified; difficult to track boats that are
chartered, and the high level of complexity present with multiple approaches to IT in each
business units. These issues will be addressed by implementing a combination of both
VesselTracker and Accenture Freight and Logistics Software with a full time data analytics
consultant from Deloitte. This will allow Calypso to have full knowledge of ship movement,
vessel characteristics, port data and tracking of their entire fleet. Accenture brings together a
powerful combination of proprietary freight and logistics software and end-to-end services that
help meet business objectives and provide centralised and standardised data (Accenture, 2013).
Deloitte can use this information to perform more effective analytics and forecasting for
Calypso. Costs are predicted for fall annually while revenues increase. We still expect a loss
after the first year but as the margin increases over time we forecast profit to be made from
2012 onward. Further benefits include increased productivity, optimised capacity utilisation,
and improved planning and decision making. Calypso must implement the three-point solution
using sound and clear steps in implementation. Service level agreements (SLAs), a top-down
approach and careful planning will ensure that the proposed solutions will both be efficient and
effective, fulfilling the required objectives.
4. BUSINESS DRIVER
One fundamental aspect that requires attention at Calypso is the management and analysis of
the data available. The CIO envisioned a future where managers could “dynamically access
relevant operational data from a variety of internal and external sources without delay”.
Calypso do not have enough resources to manage their tasks effectively. This meant that the
data available was often obsolete, incorrect or missing altogether. ShipNet proved to be a
useful tool, however obtaining important financial and processing reports proved arduous,
error-prone and time consuming. This was evident throughout the global crisis which proved
that Calypso needs to utilise information available to forecast and predict potential future
economic growth. Moreover, there is no centralized tracking system existing. The current
inventory system they have is unreliable as it fails to keep a track of who is currently chartering
out their ships.
From examining the current situation at Calypso, four main business drivers have been
identified. Those business drivers are the main aspects that must be considered to ensure
Calypso remains successful shipping enterprise in the future.
1. Data management and analysis
2. Consistent IT tool(s) across entities
3. Real time tracking/knowledge
4. Profitable growth
The following analysis shall clearly outline the suggested solutions that shall address the
business drivers mentioned. The financial objectives of the chosen solutions are then discussed,
along with the benefits, measures and owners. The risks and costs are also provided and finally
the implementation plan clearly outlines how the changes will take place.
5. POSSIBLE SOLUTIONS
The following table provides a number of suggested solutions that could assist Calypso in
addressing the IT business drivers that have been outlined. The positive and negative aspects of
each solution are also provided.
Solution Pros Cons
ShipNet
Business Driver: 1
Staff already familiar with it
Quick setup
Business platform tailored for
global shipping industry
Producing reports took several
months to complete
Complex process
Require data warehouse
SAP Solution
Business Driver: 2 & 3
Encompass the strategic
planning, HR management and
financial management
Produces timely reports
Data can be easily imported
CIO is highly experienced with it
It has been used in the company
for 2 years
A new data warehouse is required.
Expansion of the software requires
more staff and increased costs.
Netsuite (Cloud ERP for
financial analytics and
reporting)
Business Driver: 3
Real-time reporting
No cost for software client
IT staff can focus on
mainstreaming
Automated ERP upgrade
Eliminates error-prone
spreadsheets.
Not designed specifically for
shipping industry
Less security
Employee resistance to new
software
Accenture (Freight &
logistics software)
Business Driver: All
Enhanced analytics enable better
profiling of market trends
Greater efficiency through faster
information management
Increased flexibility and
adaptability to changing market
conditions
24/7 tech support available
(including service desk support).
Costly to implement (both the
software itself, and the training
required). One current objective is
to save money, not spend it.
Buy-in from staff imperative, this
may prove difficult.
Volatility in the shipping industry and the ever-changing demands of customers tend to make it
more challenging for service providers to excel. Calypso can't prevent low freight rates and
increased competition but they can become more alert and responsive to ever-changing
business environments. The key to achieving profitable growth will be the ability to respond
quickly to growing client needs for advanced logistics capabilities and industry-focused
solutions. Calypso will require superior IT capabilities in order to improve their internal
processes.
Considering the above points, and from analysing the suggested solutions, it is suggested that
Accenture freight and logistics software be implemented. There are a variety of modules
6. available through Accenture, so Calypso will only utilise the software elements that are relevant.
This includes the Accenture Enterprise Resource Planning software (ERP) that is specifically
designed to provide end-to-end services and assist Calypso in identifying key business values.
Along with this, VesselTracker software will be used in order to ensure Calypso ships can be
tracked worldwide. In conjunction with these two software options, Calypso will utilise
Deloitte’s consulting services to analyse the provided data and identify potential drivers of
future profitable growth.
INVESTMENT OBJECTIVES
Accenture Freight and Logistics Software (AFLS) is a fully integrated suite of software modules.
Accenture’s software can help Calypso with business alignment, real-fleet reporting, cost
reduction, optimized capacity and increased profitability (Accenture, 2013). Accenture
combines their knowledge of freight and logistics with advanced business analytics and process
management tools. Currently, Calypso has little business alignment due to decentralised
departments and different systems being used. With the system integration of the AFLS,
Calypso will be able to align all the business units. All the departments will be using the same
system and information will be stored within one place that can be obtained fast and easily.
Accenture’s analytics and reporting capabilities will also enable users from different
departments to manage as a seamless team. In turn, Calypso will achieve greater efficiency
through better and faster information management.
In addition, the group CIO’s office will gain greater visibility into this data. Another major issue
that will be resolved is the fact that currently there are different systems being used and
information is either missing, inaccurate and falsified. By having all employees using and storing
all the data in the AFLS, this will improve the accuracy of the information stored on the system.
They will be able to pull together complete, timely and reliable data of the company’s
operations that support their decision making. In addition, IT employees will not have to create
reports for the separate business sections because Deloitte will do this job for them. Accenture
also offer Calypso maintenance services with a 24/7 help desk manned by professionals to
resolve any software related issues.
Deloitte can perform data analytics task for Calypso in helping them manage their data
overload, efficiently extract, clean and standardize data from multiple operational and legacy
system. By turning this data into useful and actionable insights, this will provide Calypso with
the reporting quality improvement that they then can use it to make better decision.
Furthermore, VesselTracker will offer Calypso ship movement information, reliable and
comprehensive data of vessels and ports. This will address the issue of Calypso's inability to
track the location of chartered ships. VesselTracker built on the vessel characteristics database
gives advance information on vessel specification including ownership, management details and
calculation of distances, journey times and estimated time of arrival (VesselTracker, 2013).
7. VesselTracker has a 24/7 team reporting on distance causality and other related important
news. Calypso will be informed of weather conditions and the tidal situation, which allow them
to manage their planning schedule accordingly. By using the VesselTracker application Calypso
will have real time reporting on their fleet and other information that will enable them to locate
their ships and information about a ships voyage, including what they are carrying and when
they are next able to be chartered out.
Implementing outsourcing strategies to Accenture, Deloitte and VesselTracker will help the
company respond to change because Calypso isn't investing in assets but services, thus making
them far more flexible. In addition, this will also create more elasticity within resource
management, which will decrease the time for business adjustments.
BENEFITS, MEASURES AND OWNERS
Accenture Freight and Logistics Software can provide visible information at every point of the
shipment lifecycle from order taking to post-delivery – revenue, costs and contribution. This is
the key to realising many of the benefits available to Calypso. They will also help achieve
automation. This includes real-time collaboration and rule enforcements to prevent revenue
leakages, reduce costs and claims, and enhance contribution. Automation will cause data to be
more relevant and standardized throughout the company
VesselTracker AIS API package is tailored uniquely to the needs that Calypso has. The tools,
operation and software can be suited for Calypso, redundancy will be non-existent. The
package allows global coverage, real time delivery as well as a 24/7 hotline. A significant
advantage is that implementation is predominantly in the ports, not on the fleet. An antenna
will be placed on the ships but the ports themselves house all the hardware and software to
record the movements of the ships. Based on arbitrary positions on the globe they can calculate
distances, journey times and ETA, including all ports, any vessel position, and speed limits
(Accenture, 2012). This smart tool can provide all the useful information a Charter Manager
may need to effectively run their fleet.
Accenture and Deloitte will provide benefits to three main areas: finance, operations, and sales.
Accenture helps financial teams achieve greater control and profitability, helping them to
improve decision making for large capital investments, enhances predictability and reduces
revenue leakage. They will be able maximise asset utilisation through forecasting and
systematic planning tied to real-time execution (Accenture, 2013). Calypso will see their
projects delivered on-time and on-budget while achieving more critical service levels.
Benchmarking organisation Software Productivity Research (SPR) found that Accenture
outperformed the industry by four percent in adherence to schedule and budget for small-scale
enhancements, meets service level agreements ten percent more often and performs nine
percent faster in response and resolution time for Application Management (Accenture, 2013).
8. Operations planning and execution will also benefit from using Accenture’s solution. Dynamic
route generation software provides real-time, dynamic cargo routing optimization while
simultaneously accounting for complex constraints imposed by carrier business rules and
government regulations (Accenture, 2013). This will enable Calypso to increase asset efficiency
and optimize shipment routes with increased agility and responsiveness. Accenture’s analytics
and reporting capabilities enable users from different locations to manage as a seamless team.
The system supports the identification and tracking of shipments at multiple locations providing
routing, documentation, inventory storage, fees and charges, third-party responsibilities, and
security (Accenture, 2013). As a result Calypso will gain several operational benefits, including
greater visibility into inventory cost and contribution as well as key performance indicators.
Deloitte can use this to provide enhanced analytics and enable better profiling of customer
behaviour and market trends (Deloitte, 2013). Greater efficiency through better and faster
information management could also be achieved, along with better cost and capacity control,
and ultimately drive higher margins and profitability.
Accenture can provide advantages to the sales and customer service segment at Calypso too.
Their freight rates management software offers centralized accountability, traceability and
consistent rate offer for quotation/bid requests and application of rates throughout the
shipment life cycle, yielding greater control over decentralized and centralized pricing decisions
(Accenture, 2013). This will lead to increased profitability and adaptability to changing market
conditions. Furthermore, sophisticated booking and inventory management capabilities allow
transparency to cost and contribution of all the services offered at the point of quotation and
booking. AFLS also offer automated self-service tools that support pricing, booking, routing and
documentation processes. Access to these tools will help Calypso to better leverage skills of the
sales team, as well as be more productive, able to perform tasks more efficiently, and to a
higher standard. Access to this software, as a result, will flow on to improve customer
satisfaction and profitability while reducing cost-to-serve and tedious manual tasks for the sales
team.
9. COSTS
Accenture Freight and Logistics Software (AFLS) helps to reduce cost by driving reductions in
total cost of application ownership by 20-50 percent over the life of an application, In addition,
Accenture could reduce transition and knowledge transfer costs by up to 85 percent. All of this
is in addition to the incremental savings introduced by industrialized run services.
Appendix B outlines the cost and revenue figures for the up-and-coming three years. OO
Appendix C shows the range of Automatic Identification Systems (AISs) that VesselTracker will
offer Calypso. The best option of AIS API we estimate will cost $20,000. Based on the Super AIS
package, plus the extras that the API package offers including daily reports, noon/sailing reports,
we believe that an extra $2000 is well worth the investment.
RISKS
Financial Risks
Calypso will continue to be detrimentally affected by the global economic crisis
The current economic climate is one of the main reasons that the profits of Calypso
have dropped. A lack of demand for consumer goods has seen the level of shipping drop.
This is a very relevant risk, and one that unfortunately cannot be internally mitigated by
Calypso. However, Calypso can become more prepared through identifying trends and
predicting future freight movements. Using Deloitte to analyse the data available will
allow for such trends to be identified.
Technical and complexity risks
Implementation of the Accenture software across the fleet will prove too difficult
Due to the fact that the ships themselves are located at various locations and ports, it
may prove difficult to install the Accenture software on each vessel. This can be
mitigated by carefully planning the installation of the software on-board ships so that it
does not interfere with the shipping schedules. The software will be installed whilst
ships are in ports, and this will be organised in such a way that the entire fleet will have
the software installed within a certain period of time.
Software failure
This is always a major risk with any software, and in this case of Calypso the failure of
the software (either Accenture or VesselTracker) could literally put lives at risk. It will be
important that there are back up systems in place to reduce the impact of such software
failure.
10. Business risks
Data analysis performed by Deloitte will not provide information around the drivers of
future profitable growth
The data that will be analysed by Deloitte is predicted to identify trends that will lead to
future revenue. However, there is a risk that the information that is analysed does not
provide any insights. This can be mitigated by ensuring that there are other techniques
used by Calypso that can identify such trends. In this case, Accenture software has a
data analytics
Organisational change risks
Staff resistance to Accenture
This is an important risk to consider due to the fact that staff acceptance is an important
factor in the success of software implementation. This will be addressed by ensuring
there is effective and intensive staff training for Accenture and VesselTracker.
External risks
Natural disaster
The risk of a natural disaster affecting Calypso is rather small, but it is still an important
risk to address. The Japanese earthquake and subsequent tsunami illustrated the need
to ensure that all ships in the Calypso fleet could be clearly tracked and identified at a
moment’s notice. A natural disaster cannot be prevented, however the installation of
software such as VesselTracker will ensure that vessels can be located easily and quickly
should another disaster occur.
11. IMPLEMENTATION
Three-point implementation plan:
1. Deloitte will implement Deloitte Managed Analytics (DMA)
2. VesselTracker will implement their real-time ship tracking service
3. Accenture will take over the running of the IT department. A transition will be made from
ShipNet and SAP R/3 to using an ERP framework while still utilising the SAP system in place but
adjusting it as seen fit.
We suggest that Calypso partners with Deloitte, who will implement a five stage analytical
project:
Step 1: Understand and Acquire
• Understand Business Problem, Define project scope, Set-up project, Identify and source
data required for project
Step 2: Prepare and Structure
Load data received, Validate completeness and appropriateness of data, Cleanse and
enrich data, Transform data into standardised analytic data sets
Step 3: Analyse perspectives
Create a series of analytical models or tests that provide insight on business objectives
defined in ‘Understand and Acquire’
Step 4: Validate and Interpret
Perform Quality Assurance on model, Validate model results with client, Update model
based on feedback, Interpret model results (if required)
Step 5: Report and Implement
Transform validated insights into a format that the client can prioritize further work or
prioritise the execution of recommendations
This requires a top-down approach by Calypso management where they fully embrace the open
collaboration with Deloitte and Accenture, but also encourage fleet management and staff in
general to actively share their ships information to the main server. The Chairman and CEO
specifically are entrusted with this responsibility of getting across to the managers that they are
the enforcers of day-to-day use of new tools and that they thoroughly convey the values, goals
and strategies in place to ensure profitable growth in the future. Communication is vital at this
point. The current managers of the different entities must share the changes to all staff in their
language that they understand and furthermore, set aside scheduled times to discuss processes
as well as to handle feedback.
12. The transfer of IT systems from ShipNet to Accenture ERP will run simultaneously with the
change in hands of data management to Deloitte. Calypso requires Accenture to move a
complex, decentralised SAP implementation to a centrally controlled environment to reduce
cost and free up resources.
Service level agreements (SLAs) need to be established, with both Calypso and Accenture
working together to focus on overall process excellence and the business outcomes to which
the SLAs are simply an indicator. Therefore, a holistic approach much be applied to managing
the relationship of the IT Business Process Outsourcing (BPO) relationship.
We propose the IT transfer is done by a means of parallel adoption where the current systems
of ShipNet and SAP are run alongside Accenture's end-to-end services. This will reduce the risk,
as the old and new system run simultaneously for some period of time after which, if the
criteria for the new system are met and all relevant data has been transferred, ShipNet can be
disabled.
1. Design, Develop and Build
Using our analysis and further inspections of the business requirements, Accenture will build a
pilot system which will seek to validate those business processes and system functionalities
detailed in the project plan. This will include the 24/7 HelpDesk as well as Operational Support,
a hosted functioning SAP within an ERP as shown in Appendix A.
2. Train, Test and Accept
Accenture must teach best practices and procedures to deliver the required functionality.
Results need to be reviewed and a sign-off should be secured, stating the progress of the new
software to date is acceptable and in line with the overall goals of the implementation (Hoyt,
2009).
3. Implement and Go-Live
Working from the knowledge obtained in steps 2 and 3, Accenture’s ERP and SAP software
should be complete. All legacy data should be migrated a final time to the new system. The
experience and resources of the project team must be present and ready to make the final
transition to the new system.
4. Ongoing Support
Accenture must maintain strong and close on-going support now that the new system has been
implemented successfully. This will be delivered through the 24/7 HelpDesk, along with
application of any updates. This Post-Go-Live Strategy needs to incorporate proactive
monitoring including analysis of users, usage and meeting of KPI's (Hoyt, 2009).
16. REFERENCES
Accenture. (2012). Achieving high performance with design, build, run. Retrieved from Accenture:
http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Application_Outsourcing_Desig
n_Build_Run.pdf#zoom=50
Accenture. (2013). Accenture ERP. Retrieved from Accenture:
http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-ERP-Freight-and-Logistics.pdf
Accenture. (2013). Accenture Freight & Logistics Software. Retrieved from Accenture:
http://www.accenture.com/Microsites/software/Documents/pdfs/Accenture_FL_Ocean_Cargo_Final_
APR.pdf
Deloitte. (2013). Data Analytics. Retrieved from Deloitte:
http://www.deloitte.com/view/en_na/na/services/risk-advisory-services/data_analytics/index.htm
Hoyt, J. (2009, November 1). 5 Steps to a Successful Implementation of Your New Accounting System.
Retrieved from ERP SoftwareBlog: http://www.erpsoftwareblog.com/2009/11/5-steps-to-a-successful-
implemention-of-your-new-accounting-system/
Netsuite Inc. (1998 - 2013). Financial Analytics and Reporting. Retrieved from Netsuite:
http://www.netsuite.com/portal/products/netsuite/analytics/main.shtml
VesselTracker. (2013). Home. Retrieved from vesseltrackerdata.com: http://www.vesseltrackerdata.com/
