Initiatives
The case describes the information technology initiatives of Canada
based circus entertainment company Cirque du Soleil (Cirque).
Cirque organized shows that were a combination of circus, theater,
and opera. Its shows were both touring and permanent. Cirque
started in a small way in the early 1980s and at that time it did not
need much support in the terms of IT. As its operations grew,
several units like casting, costume designing, logistics,
merchandizing, HR, finance, and ticketing came into existence.
These units were operating on different operating systems with 200
applications. Beginning 2000, Cirque began streamlining its IT
applications, beginning from standardizing the servers and work
stations, using fiber optic cables, use of VoIP, etc. Cirque went on to
add SAP for some of the modules. To further centralize the
operations, Cirque implemented IBMs WebSphere Business
Integration Server express Plus software in four phases. The case
discusses in detail the IT systems in Cirque, new systems that were
implemented and the subsequent benefits Cirque derived from the
new IT systems.
Introduction
In April 2006, Montreal, Canada-based Cirque du Soleil (Cirque)2 announced that the
company would outsource its information technology (IT) needs to CGI Group Inc.
(CGI) (Refer to Exhibit I for more information on CGI). The agreement would be for
a period of ten years, with the contract being valued at CDN$ 130 million3. As a result
of this contract, 84 IT professionals from Cirque, located in Montreal, Las Vegas, and
Orlando were absorbed by CGI. It was agreed that CGI would develop and support
Cirques Worldwide IT infrastructure and applications.
Exhibit I
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Talking about the deal, Danielle Savoie (Savoie), Vice President Knowledge
Management and Information Technology, Cirque, said, We were looking for an IT
service supplier able to support our activities worldwide. We needed a true partner
one as flexible and rigorous as we are. We also knew that for our growth initiatives to
succeed, we would have to be able to depend on professionals who consistently work
at the leading edge of technology. Thats why we entrusted the delivery of our IT
functions to CGI through a 10-year outsourcing contract. We believe that this decision
will prove most beneficial for Cirque du Soleil.4
In July 2006, Cirque and Orange Business Services entered into a deal according to
which Orange would manage Cirques global IT network to support its performances.
Through IP VAN and WAN solutions, Cirques strategic applications were made
available across the world. Other services provided by Orange included service
management and applications to control logistics pertaining to global network
implementation.
Cirque, a circus entertainment company, had shows that were a combination of
traditional circus, theater, and opera. It organized both permanent shows and touring
shows spread across the world. Ever since its inception in 1984, Cirque had been
known for its innovation and creativity, both on stage and off it. In order to manage
the complexities that arose due to its widespread geographical presence, Cirque aimed
at developing a robust IT infrastructure. The company had implemented a number of
IT systems like SAP ERP5 and a software from IBM which helped it to link all its
shows touring and resident with its head office in Montreal.
Background Note
In 1980, Gilles Ste-Croix (Ste-Croix), who was skilled in stilt-walking, got together
with some performers to found Les Echassiers de Baie-Saint-Paul (Les Echassiers).
The group began to give street performances. Soon Laliberte and Daniel Gauthier
(Gauthier) joined the group. In the same year, Gauthier and Ste-Croix came up with a
plan to turn Le Balcon Vert, a performing artists youth hostel that they managed, into
an organized performing troupe. To raise funds for this purpose, Ste-Croix stiltwalked6 between Baie-Saint-Paul7 and Quebec City8. This attracted the attention of
the Quebec Government, which provided the trio with the necessary funds. Their
maiden tour was that of Quebec in 1980.
4
5
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Initially, however, Les Echassiers was a commercial failure and suffered substantial
losses. In late 1980, the trio formed the Club des Talons Hauts, a troupe formed by
bringing together many street performers like fire-eaters, mime artists9, jugglers,
and stilt walkers. The venture, known as the High-Heels Club, started making
profits by 1981.
By September 1981, Les Echassiers had broken even. The trio decided to organize a
fair, at which they could exchange ideas with other performers and also learn new
tricks. The fair, which first toured in July 1982, was called the La Fete Foraine de
Baie St-Paul (La Fete Foraine). La Fete Foraine also held workshops to teach the
circus arts to anyone interested in learning them. These people could then take part
in the performances.
In 1984, during the 450th anniversary of Jack Cartiers discovery of Canada, the
troupe convinced the organizers of the celebrations in Quebec to provide them with
a grant running to C$ 1.2 million. This led to the subsequent formation of Cirque.
The company performed shows across Quebec. Laliberte chose the name Cirque du
Soleil for his company as he saw the sun as a symbol of youth, energy, power, and
light.
From the very beginning, Cirques shows were quite different from the shows of a
traditional circus. Its shows had much more to offer compared to the traditional
circus, as Cirque had artists from several countries performing in the show. It
created a new circus experience with amazing light effects, own music, and
radically different costumes. To attract the audience, traditional circuses often
included performances by well-known and famous artists. Cirque did not employ
noted performers to pull crowds as Laliberte believed that no performer could be
bigger than Cirque itself. Nor did Cirque include animals in its acts. By not
including animals, the company avoided attacks from animal rights activists and the
huge costs involved in maintaining and moving the animals. Cirque also avoided
loud background music, which was common in traditional circuses.
After its first tour in 1984, Cirque received an additional grant from the Quebec
government. With these funds, Cirque carried out a major renovation organizing
itself into a formal circus. For this purpose, Laliberte met with Guy Caron (Caron),
founder of Canadas National Circus School. Caron began working as Cirques
artistic director. Both Laliberte and Caron played a major role in redesigning
Cirque. There was a live band that played strong, emotionally charged music from
the start till the end. The performers themselves moved the props and the equipment
on and off the stage, blending the process into their performance. This way, the
main storyline of the performance was not disrupted.
In 1985, the troupe performed outside Quebec for the first time when it held a show
in the neighboring province of Ontario. The positive response from the audience
encouraged Laliberte to expand Cirques operations outside Quebec. In the next
year, Cirque performed at the Childrens Film Festival in British Columbia and at a
Mime is a performance act in which the artist performs a story through body motions and
facial expressions without the use of speech.
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world fair in Vancouver. By this time, Cirque had a seating capacity to 1500.
However, some of the shows failed, leaving Cirque in a financial mess. In late 1985,
the performance in Toronto received a poor response from the audience with just 25
percent of the seats being filled. A subsequent show at Niagara was also a failure.
As a result, Cirque went deep into debt to the tune of US$ 750,000. However, the
company did not go bankrupt as Cirques financial institution, the Desjardins
Group, postponed Cirques debt payment of US$ 200,000. The Quebec government
granted sufficient funds to the company so that it could sustain itself for another
year.
In 1987, the status of Cirque was changed from non-profit to a for-profit entity. That
year, the troupe was invited to the Los Angeles Arts Festival. Although the company
was facing financial problems, Laliberte decided to take a chance and accept the
invitation. The performance was a huge success. The show got noticed by Columbia
Pictures10, which entered into talks with Laliberte and Gautier for making a movie
about Cirque. However, Laliberte did not allow the deal to materialize as Columbia
Pictures tried to control the production. This experience left him with the conviction
that Cirque should be privately held so that he could have all the freedom needed to
operate the company.
The company could seat 2,500 people by the year 1990, and the tickets sold for as
high as US$ 33.5.11 By this time, Cirque had different troupes touring several parts of
the world and normally halting in cities for about four to five weeks. A new
production named Nouvelle Experience which toured 13 major cities in the US and
Canada over 19 months enjoyed an excellent response and by the end of its tour, there
were 1.3 million people who had seen it12.
By mid-1991, Cirque was able to convince Fuji Television Network (Fuji) to sponsor
Cirques tour of Asia and Fuji agreed to give US$ 40 million for the purpose. Cirque
performed across eight cities beginning with Tokyo. At the same time, it partnered
with Circus Knie13 for a tour of Switzerland. The company also conducted a tour of
North America with its production Saltimbanco (Street Performer in Italian) in 1992.
Saltimbanco was a major success in North America and it then toured Tokyo for six
months.
Cirque also entered into a year-long agreement with Mirage, a Las Vegas hotel, to
perform Nouvelle Experience. This was Cirques first engagement of the kind. The
fact that this was a huge success encouraged it to launch another production called
Mystere, which began its performance at Mirage. Subsequently, Cirque entered into a
ten-year contract with Mirage for the production. Steve Wynn (Wynn), owner of
Mirage, also built a permanent facility for Cirque at the cost of US$ 20 million at his
new resort, Treasure Island, which opened in 1994. This provided Cirque with a major
10
11
12
13
Columbia Pictures Industries, Inc. is an American film and television production company,
owned by Sony Pictures Entertainment, a subsidiary of Japanese electronics corporation
Sony. It has produced popular movies such as Kramer vs. Kramer, Charlies Angels, Hollow
Man, and the more recent Spider Man Series.
Jeffery L. Covell, Cirque du Soleil Inc., www.answers.com, June 02, 1997.
Jeffery L. Covell, Cirque du Soleil Inc., www.answers.com, June 02, 1997.
A Switzerland-based circus company which was formed in 1803.
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and steady source of revenue. In addition to the revenues obtained by the company in
terms of ticket sales, it was also earning a significant amount from the merchandise
that it sold at the performances. Besides, there was also a considerable market for
Cirques CDs as the company had created quite a fan following for itself over the
years.
In 1995, Cirque established its first European headquarters at Amsterdam. The
same year, Saltimbanco went on its first extensive tour of Europe. In 1997,
Saltimbanco presented its last performance in London. Cirques next production
was Alegria, which was performed all across Europe for over two years.
Cirques sales had increased manifold from US$ 30 million in 1994 to US$ 110
million in 1996. This growth was mainly because of the permanent production at
Las Vegas, Mystere. Mysteres revenues were at US$ 40 million. In 1997,
Wynn constructed a US$ 60 million theater for Cirque at Bellagio, Las Vegas.
Walt Disney also constructed another permanent theater to house Cirque at Walt
Disney World, near Orlando, California. The same year, a US$ 22 million
facility for rehearsals and costume designing activities called Creation Studio
was created by Cirque in Montreal. This also served as the companys
headquarters.
In October 1998, Cirques new production O (after eau, which means water in
French) debuted at Bellagio. This production was unique with the performance
being conducted in, above, and around an Olympic-sized 1.5 million gallon
swimming pool that had been created for the purpose.14 The production cost was a
whopping US$ 90 million and the tickets were priced at US$ 100 each. Another
production La Nouba debuted at the newly constructed theater at Walt Disney
World. Dralion, yet another new production, embarked on a three-year tour of
North America in January 1999. Thus, Cirque concluded the 1990s with seven
productions and performances in 22 countries in Asia-Pacific, North America, and
Europe.
In October 2004, Cirque entered into an agreement with the Beatles15 to create a
production to be staged at the Mirage hotel in Las Vegas. The project called Love,
recreated the life of the Beatles before they became famous. In November the same
year, there was another permanent production, KA, which played at MGM Grand, Las
Vegas. MGM16 acquired Mirage Resorts in 2000 and KA was created specially for
MGM. KA was unique in the sense that it was more clear and straightforward than
other Cirque productions which were quite abstract. The total cost of KA at US$ 220
million, was borne by MGM.
14
15
16
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www.cirquedusoleil.com.
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place for the next show to start and run smoothly. After the team finished its
performance at a location, the setup was immediately dismantled and moved to
the next destination. Depending on the location, the next show was scheduled
anywhere between one week to ten days after the previous show. During this time,
the IT infrastructure was set up.
Setting up the IT infrastructure called for moving IT equipment and more than 5
km of network cable from one location to the other. Setting up the
communications network was a difficult task as cables had to be laid and separate
cables were required for voice and data. The networks had to be in place before
the troupes arrived at the new locations so that tickets could be sold for the shows.
Savoie wanted to simplify the process of setting up and dismantling the IT
infrastructure. As she put it, IT is the last thing to leave a site and the first to be
in production at the next location. Its on the critical path to be ready for the
premiere (in each city).18
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20
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Even after bringing in so many changes, the applications that were not running on
SAP were functioning as disparate systems, without being connected with the existing
databases. The touring shows were using their own databases and operating systems,
and were also functioning as separate units and not as a part of the organization. Data
was scattered and data analysis was carried out manually.
Though most of the functions were running smoothly, when it came to program
management, Cirque was facing problems because of the absence of complete
centralization. Several functions were conducted manually, especially those pertaining
to setting up the shows. On reaching a new location, the program managers had to
manually check the availability of the required equipment. In case some of the
equipment was not available, they had to obtain it from Cirques headquarters at
Montreal. If it was not possible to get it from there within the specified time, Cirque
obtained it locally.
In order to integrate these systems and organize all the applications on a single
platform, Cirque went in for IBMs WebSphere Business Integration Server Express
Plus software in March 2003. As per the three-year agreement, IBM agreed to support
Cirque in three areas designing and implementing wireless infrastructure through
IBMs WebSphere software, providing digital content management, and establishing
business continuity and recovery services. Apart from these IBM had agreed to
support installing Storage Area Network and connecting all the servers present in
Cirque.
The main task was to bring together the existing SAP applications and the other
disparate systems existing all over the organization. Bringing these together was again
a huge task that took more than one year to implement. The project was carried out in
four phases.
In the first phase lasting over 4 months, the staff from Cirque and consultants from
IBM decided on the functions and applications they needed to integrate into SAP.
They also determined how to collect and share the required information among the
employees. Right at this stage, Cirque made it clear that it was not willing to disturb
the existing connections between applications used by the program managers. Its main
aim was to obtain all the required data pertaining to inventory, sales, performance etc,
and to make it accessible to the concerned employees.
During the second phase, lasting for about four months, Cirque and IBM built the
Web interface for the planning system. Through this system, information regarding
planning the activities could be accessed and analyzed using the corporate intranet.
In the third phase, all the information relating to the financial function data on ticket
sales, merchandise sales, and procurement, which was stored in different locations
including in SAP servers and the Windows operating system, were brought together
and connected. The third phase took almost five months to complete.
In the fourth and final phase, Cirque integrated its intranet with an online help desk
system. This task took around ten weeks to complete. The main aim of the help desk
system was to enable quicker problem solving.
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The Benefits
After all the four phases were implemented, all the employees of Cirque spread all
across the world, and even those on the shows that moved from one place to the
other had access to the right kind of information. After implementing the systems,
it was easier to find a replacement for any artist. If an artist was not able to
perform, the program managers could use the database to locate a performer with
similar skills within close proximity. In case they found a replacement, they could
immediately access the data about his/her past performance and measurements for
the dresses, head gear, etc. so that the costume makers could start working at once
on making alterations to the dresses or on making new dresses as per the
requirement.
In case of products and souvenirs sold by Cirque, real time data was available to
the executives as Cirque used SAP to link point of sale data to merchandize.
Earlier, they had to wait for a long time to get the data about the products sold and
replacements needed. After the implementation of the new system, they could
obtain point of sale data and keep tabs on the products that were experiencing
high sales, and schedule their manufacturing and dispatch to the concerned
location. This enabled the company to match inventory better and come up with
suitable retail strategies.
The production managers who were earlier checking the inventory manually also
benefited through the new system. Under the new system, all the equipment used was
tagged with a barcode. On reaching a new place, the barcode, which matched with the
inventory in the database, was scanned with a hand held device. In this manner, the
time to check the equipment was reduced by half.
Using highly automated technologies, Cirque controlled several aspects of its shows,
be it the dollies used by the performers to perform some of the acts, to controlling the
lights. To control the lighting and provide the desired effects, Cirque used Wireless
DMX.
With the IBM software, the data relating to Cirque that had been scattered at different
places, was unified and all the employees could access it any time they needed to. The
software allowed the employees to use wireless devices like PDAs and laptops for
communicating with others, to update inventory, place orders, etc. As the IT
infrastructure was completely centralized, Cirque required only one IT technician to
set up the IT infrastructure at new places.
Outsourcing major processes and systems which were highly complex was in itself a
challenge for Cirque. But Savoie was of the view that it was necessary to do so as
Cirque was witnessing rapid growth. Cirque entered into an agreement with CGI in
April 2006. CGI was responsible for managing PCs, servers, and the help desk,
allowing Cirque to concentrate on other activities. Eventually, CGI was expected to
take over other applications like payroll, costumes, merchandize, inventory, etc. CGI
would also be responsible for taking up any required modifications in these
applications.
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Savoie was quite sure that the companys IT systems would be able to provide the
required support, especially when Cirque was in for a massive growth. According to
her, We have five productions concurrently in development and I have to support my
colleagues to ensure they have all the systems and the tools for the growth. They need
to have information systems to support both their operations and their decisionmaking process.21
21
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2.
3.
Alice Dragoon, The Amazing Traveling IT Show, CIO, November 01, 2002.
4.
IBM is Cirque du Soleils First Global Corporate Alliance Partner, www03.ibm.com, March 17, 2003.
5.
6.
7.
8.
Richard Corliss, Steven Frank, Cirques Big Leap, Time Canada, February
14, 2005.
9.
10.
Daniel Terdiman, The Tech Inside Cirques Big Tent, CNET News.com,
December 05, 2005.
11.
12.
Jane Dudman, The Systems Behind the Shows, Computer Weekly, August
15, 2006.
13.
14.
15.
www.cirquedusoleil.com
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