It at Royal Caribbean
It at Royal Caribbean
Royal Caribbean Cruises, Ltd. (RCCL) was founded in 1969 by Edwin W. Stephan with headquartered in Miami, Florida. The ships registry is in Liberia with additional locations in Blue Lagoon, Florida and Wichita, Kansas (call center). RCCL operates using two brands, Royal Caribbean International (RCI) and Celebrity Cruises (CC). RCI is marketed to the contemporary and premium customers, with CC marketed to the high-end, ultra-luxury customer base. In each segment, RCCL commands a higher price due to its provision of special services and amenities such as rock climbing walls and skating rinks, unlike their top competitor, Carnival Cruises, whose competitive edge was due to tight cost controls.
RCCLs two brands kept it in second place with its 26 ships and 2.7 million passengers per year. Carnival was number one with 13 brands, 66 ships, and 4.7 million passengers in 2002. Norwegian Cruise Lines sailed 18 ships under 3 brands and held third place in the industry. RCCL and Carnival controlled over 80% of the market. The key stakeholders are the customers.
IT and company executives are also key stakeholders in making key decisions regarding investments and corporate strategy.
Originally, RCCL IT was considered the scapegoat for all of the companys issues and problems. Originally, the VP of IT reported to the CFO and was not a leader but rather followed orders from the other executives to implement ITs portion of the company strategy.
Using the Information Systems Triangle as a framework, evaluate the alignment of RCCLs business strategy, organizational strategy, and information systems strategy before Tom Murphy became CIO and then after Tom Murphy took over as CIO (up to 9/11/2001).
Prior to Tom Murphys tenure as CIO, Royal Caribbean Cruises Lines (RCCLs) business strategies were not fully aligned with the organizational and IT strategies. Tom Murphy was instrumental in bringing these together.
A threefold business strategy was in place. It consisted of 1) design better cruise experiences, 2) reduce costs and 3) grow revenues. It improved guest experiences through luxurious ships with rock-climbing walls and ice-skating rinks, the Silverwhere seating arrangement program, Internet cafés and the introduction of a debark card for reduced debarkation times. While Royal Caribbean was not the low-cost leader that larger competitor Carnival was, it offered a premium cruise experience at mass-market price and leveraged the individual character of its two brands ? Royal Caribbean and Celebrity.
In the past, its organizational strategy was to groom from within. As a result, the staff focused on the status quo, and changes were difficult to introduce. Jack Williams, COO, upgraded the organizational strategy to recruit the best from outside the cruise industry and grow from a small to a medium-size company. A planning committee consisting of key business executives, met regularly to review strategy and operation plans. In addition, the IT organization was isolated and reported up through the CFO.
Because of ITs isolation, its activities were not aligned with the business or organizational strategies.
Jack hired Tom Murphy, who had come from American Airlines, as CIO. Because of the new organizational strategy of utilizing a CIO, he had peer relationships with the business teams he needed to support.
Tom Murphy, who had degrees in marketing and English from the University of Richmond and a work history in the hotel management industry, joined RCCL as its CIO in 1999. He considered himself to be a leader more than a technician, with expertise in managing the installation of software systems. As soon as Murphy was hired, two of the IT VPs were fired and many more resignations flooded in. That opened the door to major changes in the way IT was managed and served the business. Murphy was mandated by his boss, Jack Williams (COO), to align IT policy with RCCLs strategy.
Murphy implemented a customer service orientation, stressing that ITs primary customers were the business users of the IT hardware and software systems. Simultaneously, Murphy worked to improve ITs reputation among the business units. Murphy also introduced improved tools for time management as a program management office to improve ITs service of the company.
LEAPFROG Project
Once Murphy had cleaned house and aligned IT with the aims of the business, he and his staff conceived “The Leapfrog Project”. The Leapfrog Project was envisioned to help IT leap forward in its support RCCLs operations. The CEO, Richard Fain, insisted that Murphy present The Leapfrog Project to the Board of Directors himself, so that the technical