Cirque du Soleil, Essay Example

Introduction and Background Information

The presentation of Danielle Savoie explains how the role of IT was crucial in the expansion strategy of the production company. Despite the new leader of the circus had to face the question of “how does IT help”, she carried on integrating information technology in every aspect of production and process. In the tour life cycle, all steps were supported by advanced information, communication, and knowledge sharing facilities. In the creation phase, music composition and scenario planning was placed on the servers, so a true collaboration can be created without having to hold meetings. The design phase was made more effective through displaying, sharing, and discussing costumes, make-up, and techniques. In the preparation phase, training schedules and rehearsals were managed. In the diffusion phase, ticket sales for existing Club members and the general public were managed by IT systems, so visitors can be informed, tracked, and marketed to. Logistic solutions were also provided by the specifically designed IT systems, as well as the performing resource management. The author of the current proposal recommends a higher utilization of free online content and marketing strategies in sales and performance marketing while integrating Total Cost Management systems in the existing IT infrastructure.

Case Analysis

In 1984, there were only 70 employees in Cirque du Soleil, compared with several thousands today. The integration of systems is not satisfactory, either. There was a separate application for recruitment, training, resourcing, and logistics. In 2008, the IT alignment was fully compatible with the needs of the production company, however, the effectiveness of the processes was not satisfactory. According to Ross (2003, p. 32), aligning IT architecture with organizational needs can create a system that serves the organization’s business objectives. In this case, the IT architecture had to serve several business goals, such as timely development of ideas, knowledge sharing, logistic solutions, and performance management, however, it was not suitable for managing costs and increasing cost-effectiveness of operations.

Reflection and Recommendations

Reflection

Ill-structured processes within Cirque du Soleil still exist, and they are currently supported by IT systems. Rolland, Nurcan & Grosz (1998) state that ill-structured business processes are extremely vulnerable to small changes and lack flexibility. This is true to the artist allocation process, for example, or performance planning. If an artist suffers and injury, the company needs to find replacement fast. When shows are canceled, the entire logistics, personnel, and resourcing system needs to be changed. According to Rolland, Nurcan & Grosz (1998), improved collaboration can improve the outcome of these volatile processes. Still, cost management is extremely important when the business processes within the company are as complex as within Cirque du Soleil, and collaboration between business units is essential to control costs and make projects with a long life cycle profitable.

The current value chain of the company needs to be reviewed before improvements in IT implementation and integration can be made. The below simple chart will show the company’s value chain and the potential improvements in the implementation.

From the above review of the case, it is important to note that while logistics, resourcing, and production are supported by IT, the links between different stages are missing. The lack of costing and financial, marketing applications creates a huge gap in the ongoing support of business processes. The recent financial troubles of the company (Financial Post) indicate that the company was unable to fully utilize the capabilities of the IT systems when managing costs and predicting revenues. In 2013, the company announced that it would cut 400 jobs to save money. The reporter of Financial Post (2013) states quotes the company spokesperson: “’We had a record year in terms of tickets sold. We sold more than 14 million tickets this year. We had a record year for total revenue, with more than $1-billion.’ Despite that, the Cirque didn’t make money, Menard said.”

Recommendation

Future applications of IT integration into the business processes of the Cirque du Soleil can further benefit the organization. The management of funds, ticket sales, and marketing can further be improved, in order to increase the revenues. Further, processes could be re-designed using online collaboration and sharing the experience of artists, managers, human resources, in order to ensure that no time and money is wasted. As the life cycle of a show within Cirque du Soleil is long, it would also be advisable that the tours of the company are planned based on demand, cost-effectiveness, and availability. Ensuring that talent is nurtured and continuously trained is another potential application where IT integration can be utilized. Finally, in order to implement process improvement projects, the company should look for ways of seeking feedback from audience, engaging with people through social media, and creating a web-based marketing strategy that targets customers who have already attended one of the shows. This would significantly reduce marketing costs, and help the circus grow even further. However, the most important area of IT management that the company should focus is associated with risks. Within the entertainment industry, several risks occur from injuries to public liability claims. Westerman’s (2009) review on the issue has revealed that organizations can create operational resilience by developing systems capable of identifying, prioritizing, and managing risks.

The first step of the process should be to -using the Total Cost Management Framework –  (Hollmann, 2012) implementing costing and revenue management in the IT systems in order to increase the profitability of the company. The below framework would provide an implementation guide for the company’s next IT management contractor or team. The main focus area would be implementing the functional process of the project, including cost, profitability, and value analyses. People and performance management systems, as well as asset planning and planning are already in place at  Cirque du Soleil, and they need to be implemented in the below framework.

In the second phase, it is important to create a system for analyzing existing customer base and members’ database, in order to determine the most profitable customer segments, and focus on creating meaningful messages for them. This way, the company can increase both its profitability and marketing results at the same time.

It is recommended that the company evaluates IT providers and invites them through a tender who have experience in applying TCM frameworks, and modifying existing infrastructures. This would result in a lower cost, a shorter time-frame of integration, and a more efficient overall system. Providers would be evaluated based on industry experience, the number of implemented ICM frameworks, speed of service, and cost. Business costing experience based on similar sized complex operation companies would be the main criterion for assessment.

References

Financial Post. (2013) Cirque du Soleil cuts 400 jobs as strong loonie and surging costs bite.  Canadian Press. January 16, 2013.

Hollmann, J. (2012) Total Cost Management Framework. An Integrated Approach to Portfolio, Program, and Project Management. AACE International.

Rivard, S., Pinsonneault, A. & Croteau, A. (2011) Information technology at Cirque du Soleil: Looking back, moving forward. Teaching Case

Rolland, C., Nurcan, S. & Grosz, G. (1988) A Unified framework for modeling cooperative design processes and cooperative business processes. EEC Publication.

Ross, J. (2003) Creating a strategic IT architecture competency: Learning in stages. MIS Quarterly Executive Vol. 2 No. 1 / March 2003

Westerman, G. (2009) IT Risk as a language for alignment. MIS Quarterly Executive Vol. 8 No. 3 / Sep 2009