Rccl Royal Caribbean Cruise Line

RCCL

Royal Caribbean Cruise Line (RCCL) Case Study

How important is it to modern day entertainment business? To the cruise business?

Information technologies are strategically important to any modern day entertainment business. The importance of how all forms of data are managed from customer records, through costing and supply chain data, to procurement partners' service level agreement (SLA) contracts to managing pricing and profitability analysis all are dependent on how integrated information systems are in an entertainment business. The greater the knowledge and data integration in any entertainment business, the greater the ability of the business to respond effectively to fluctuations in costs, customers' preferences and tastes or changes in their supply chains and stay more competitive. For entertainment businesses that rely on customer loyalty as Harrah's does for example (Stanley, 31) the reliance on it in general and analytics specifically to nurture greater customer loyalty (32) over time is critical to the successful execution of their business model.

The time, location, date and cost constraints that the cruise industry operates under make investment in it a critical foundation for the successful running of a cruise line. The following are factors that make it systems critical in the cruise industry. First, supply chain coordination and planning to the ship level including the port and time of specific food, beverage and maintenance materials deliveries must be coordinated across multiple departments of the cruise ship and sourcing departments from headquarters. Second, managing of on-board crews and their continual training to increase their customer service and maintenance skills of the ship and its accommodations is also critical and requires it systems to coordinate and keep these activities organized (Upsaker, 113). Third, there needs to be a continual focus on the customer and giving them the best possible experience onboard a cruise line can provide. Giving onboard ship stewards a 360 degree view of the customer by partnering with travel agents to find out customers' preferences for seating at dinners, activities of interest for shore excursions for example is also a strategic use of it in the cruise industry (Datz, 73).

How would you describe the it environment in 1996? Would you call it a mature environment? Would you call the current it environment at RCCL mature?

The it Department in 1996 was very mature, and had in fact become insular, isolated and silo-like it its operation. Known for its command and control culture, low innovation and costs focus, the RCCI it Department in 1996 was most likely known for its very low risk aversion and lack of initiative. As a result of not being focused on internal departments as customers, the it department frequently was cited as the scapegoat when strategies did not deliver the desired results. The case study typifies the RCCI it Department as one that is highly risk averse and lacking in any form of customer-centric mindset regarding serving other departments in the organization. Industry it press from the time (Vijayan, 16) defines the back office of RCCI it Department as programming customized application in RPG running on IBM as/400 servers. In juxtaposition, the current environment of RCCI's it Department has changed from being myopic to being customer-centered. This philosophical change has also led to a quantum improvement in the alignment of it investments and projects to the core business' needs. The pursuit of innovation in customer-facing processes including embarking and disembarking, and the entire experience onboard has also completely been transformed due to the more customer-centric approach to managing it as a strategic resource.

Do you agree with it downsizing in September 2001?

The downsizing of the projects was too drastic immediately following September, 2001. Instead of cutting so quickly and deeply into Leapfrog, the human resources segment of this project needed to be completed quickly as immigration and U.S. Homeland Security employment requirements announced in October, 2001 could impact the ability of RCCL to operate its ships. In September 2001 President Bush said that he would form the U.S. Department of Homeland Security and would require more stringent measures of employment eligibility and identity verification for American-based companies operating globally. This was also part of the initiative to fingerprint all in-bound foreign visitors to the U.S. And many other security and identity verification programs the Department was putting together. Accentuating the need for focusing on human resources first is the critical role consistency of staff plays in learning how to work on specific ships (Upsaker, 113). Controlling staff and crew turnover was critical for RCCL at this time and this area needed more focus than was possible with the severe cuts completed in September 2001.

Can RCCL reduce its dependence on the indirect channel (travel agents) by using web technologies?

It can accomplish this using guided selling technologies (Lager, 25, 26), Web-based applications that would run on their website, integrated to other systems through the Enterprise Application Integration (EAI) plans the company has mentioned in interviews (Murphy, 153). The question is whether RCCL wants to take this strategic direction or not. With 98% of bookings through travel agents and the essential role they play in the distribution channel, RCCL would be making a mistake to attempt to disintermeidate them from the selling process. Travel agents' recommendations as to which cruise line to vacation with and which specific cruises to take have a significant impact on the customer's decision making process. Research has shown travel agents' word-of-mouth does have a significant impact on which cruises customers choose to take (Santangelo, 3) RCCL instead needs to look at how to use Web-based technologies to give travel agents and their own customer service organizations a 360 degree view of the customer. By taking this strategy instead of disintermediating the travel agents they can increase customer loyalty and repeat purchase, helping travel agents to be more effective and increasing their own repeat sales at the same time.

Are it plans at RCCL aligned with business plans? Is breaking down projects useful?

Under the leadership of CIO Tom Murphy the it plans are tightly aligned with business plans, as the CIO has led the department to see internal departments who need it assistance as customers. This customer-centric approach to managing it has in turn forced every member of it to understand in detail the initiative and goals their internal customers need to accomplish. Accountability for results delivered to internal departments' goals and objectives has created a more efficient approach to prioritizing internal projects as well.

Breaking down project is crucial for accurate deadlines to be defined and accurate costs of completing each project being defined.

From the more detailed break-out of each project area it's clear that the RCCL financial systems need major updating to have better cost data and pricing information for managing suppliers. it's also clear that the Silverwhere project is strategic as passengers recall their dining partners even more than their cabinet stewards. Getting a compatible group of passengers together at dining room sittings is crucial for overall passenger satisfaction. Leaving which passengers eat with each other to pure chance is too much of a gamble in terms of customer satisfaction and potential to generate long-term customer loyalty.