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UCSC ISM 158 - Lecture 18 - Case - Royal Carribean

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Lecture 18Final Exam OutlineAnnouncementsQuizSurveyRoyal Caribbean ProfileIT Activities9/11RecoverySlide 10Portfolio of projectsLecture 18CaseRoyal Caribbean Cruises Ltd2Final Exam Outline•8-11am, Wednesday June 13•Half short and long answers on theory and principles from course•Half case-study–Questions from class case studies–One new case to read (given probably Thursday)•Closed book•Sample questions next week3Announcements•Meetings this afternoon for teams who gave me draft projects–2pm Toyota–2:20pm Wipro–2:40pm Seagate4Quiz5Survey•Joseph Rios•Kevin Ross•Extra questions:•Pace of course 1(too fast) – 5(too slow)•Hours spent on course•1=0-5 hours, 5 = 18+ hours•Major:•CE/CS 2 BINF 3 EE 4 ISM 5 OTHER6Royal Caribbean Profile•No. 2 in industry–Distant 2nd–Profitable (even after 9/11)–Strong balance sheet–Compete on innovation and brand•Built by acquisition and construction of new ships•Very aggressive construction schedule•Wrong side of economic scale•Recently lost large acquisition – morale problems•9/11 massively disruptive–Recently recovered booking-wise•Two brands with different images–Challenge to squeeze back-office costs–Commoditize standards in operations–Maintain key elements of brand differentiation7IT Activities•Pre-1996–New IT leadership–Cost frozen, reported to CFO–Budget of $40million–No innovation (even email)–Home-grown legacy systems with code and data mixed together–Low-level support environment–Chosen not to compete in IT•1996 – Sep 10,2001–Caught up on IT–COO Jack Williams from American Airlines background–Doubled budget 40m to 80m–New staff–Tom Murphy, CEO•Typical user background CEO•Limited technical training•Effective change agent•Needs good tech people around–Mike Sutton joined, now CIO–Project Leap Frog conceived and funded•Supply chain•Employee support•Customer interface–200m cost budget–Strategic IT89/11•Middle of repositioning•Three options–Modest cutback in development–Significant reduction in development–Complete stop of development•Chose option 3 due to uncertainty•Headcount 50% cut•Budget slashed 83m to 42m•Survival mode•Move from strategic to factory quadrant•Four weeks to cut 50% spending9Recovery•How to allocate scarce resources•How to move from defensive to offensive•IT priorities managed by committee led by Jack Williams–Meets 4 times per year•Research lab on new IT applications for use on ships is maintained•Innovation remains important•Aggressive development of external interfaces–Sophisticated website–Still travel agent dominated–IT enhances sales channel rather than replaces it•Phasing out legacy systems•Moving to packages with flexible architecture•Operations dependence becoming more critical onshore•Moving supply chain management problem•Compare outsourcing this to Cathay Pacific1011Portfolio of projects•Exhibit 6•What should be


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UCSC ISM 158 - Lecture 18 - Case - Royal Carribean

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