MyMagic+ article from Fast Company magazine

[LuvtheGoof]

The change over to RFID locks was part of the MM+ initiative. Just because you used it earlier because it rolled out first doesn't exclude it from the project.

No, again, these changes were made explictly as part of the MM+ plan. They changed the ticket media to support the idea each ticket would be a RFID tag, not a mix of barcodes and tags.
Again.. completely wrong.
1) It's not federal law regarding the change to Smartchip and liability. It is the agreement between the CC companies and merchants.
2) Both Visa and Mastercard set Oct 2015 as the date where the liability for fraud will shift to the merchant if they did not validate the transaction via EMV. But this long coming change didn't finally get motivation to set a hard date . The change in the mandate only happened after the Target breach brought so much more attention to the topic and finally broke the logjam and got things moving
3) The POS terminals were designed as part of the MM+ system.. hence the common Mickey design shared with the Turnstiles.

Everything you listed before was all part of an overarching deployment plan for a unified system under NGE/MM+.

No, a budget gets FUNDING from a source. The source would account for the expense in their own budget. Or things would be directly cross-charged and again.. be seen by the funding source.

No, if you want to make the numbers appear a certain way, they can be shifted and distorted to look anyway you want when you control all the buckets. They can spin any answer they want.. because the boundaries are really arbitrary. Its only at the financial reporting level where they are constrained. They aren't hiding they spent the money, but they can mask what money was spent where. At the end of the day its still spinning a story they want.

The word 'budget' is so misused on discussion forums it's absurd. Budgets are nothing but plans. The only thing that really matters is what you actually spend or are willing to spend. here you're just trying to support their notion of hiding what efforts went to what.

Would these systems change eventually on their own? Yes.. but they were changed now and to these choices to support MM+.. and would have been funded under corporate initiates to do so. Everything else is just a shell game.

I didn't realize that a detailed plan of action for MM+ had been released that told us everything that went into the plan. That would be a great read if you could post a link to it.

My bad on the cards, I thought I had read somewhere that it was going to be a federal law for the liability portion. Thanks for pointing that out. So even if not a law, Disney was still going to replace them. Just because they have Mickey heads has nothing to do with MM+. It has to do with theming, just like the door locks.

Concerning your budget discussion I have to completely disagree with it. I have had to deal with budgets in the millions of dollars, and there have been many times when upper management has told me that a certain portion of a certain project will be under my budget. Large corporations do it all the time, and there is nothing shady or dishonest about it, as you imply with your statements. It is the way large multinational companies work nowadays.

 

[devoy1701]

The change over to RFID locks was part of the MM+ initiative. Just because you used it earlier because it rolled out first doesn't exclude it from the project.



No, again, these changes were made explictly as part of the MM+ plan. They changed the ticket media to support the idea each ticket would be a RFID tag, not a mix of barcodes and tags.



Again.. completely wrong.
1) It's not federal law regarding the change to Smartchip and liability. It is the agreement between the CC companies and merchants.
2) Both Visa and Mastercard set Oct 2015 as the date where the liability for fraud will shift to the merchant if they did not validate the transaction via EMV. But this long coming change didn't finally get motivation to set a hard date . The change in the mandate only happened after the Target breach brought so much more attention to the topic and finally broke the logjam and got things moving
3) The POS terminals were designed as part of the MM+ system.. hence the common Mickey design shared with the Turnstiles.

Everything you listed before was all part of an overarching deployment plan for a unified system under NGE/MM+.



No, a budget gets FUNDING from a source. The source would account for the expense in their own budget. Or things would be directly cross-charged and again.. be seen by the funding source.



No, if you want to make the numbers appear a certain way, they can be shifted and distorted to look anyway you want when you control all the buckets. They can spin any answer they want.. because the boundaries are really arbitrary. Its only at the financial reporting level where they are constrained. They aren't hiding they spent the money, but they can mask what money was spent where. At the end of the day its still spinning a story they want.

The word 'budget' is so misused on discussion forums it's absurd. Budgets are nothing but plans. The only thing that really matters is what you actually spend or are willing to spend. here you're just trying to support their notion of hiding what efforts went to what.

Would these systems change eventually on their own? Yes.. but they were changed now and to these choices to support MM+.. and would have been funded under corporate initiates to do so. Everything else is just a shell game.

It has to be funded as part of common initiatives otherwise you never would achieve a uniform roll out and project plan. If you left it to each division to prioritize and find the money in existing standing budget norms... such radical overhauls would never happen, and certainly not in unison.

I think what @LuvtheGoof is saying (or how I'm interpreting it) is that Stagg's quote about MM+ coming in under budget is part of that shell game you're mentioning. Sounds like an additional spend of $1B was approved and allocated to the project and that the infrastructure upgrades probably utilized some existing budgets. Even if the RFID locks are part of the NGE project, it doesn't necessarily mean that the cost was included in the $1B figure.

 

[LuvtheGoof]

Would these systems change eventually on their own? Yes.. but they were changed now and to these choices to support MM+.. and would have been funded under corporate initiates to do so. Everything else is just a shell game.

It has to be funded as part of common initiatives otherwise you never would achieve a uniform roll out and project plan. If you left it to each division to prioritize and find the money in existing standing budget norms... such radical overhauls would never happen, and certainly not in unison.

But you don't leave each division to prioritize. You tell them, put it in your budget for next year. You tell them, this is what you will get. Doesn't have to be funded as part of a common initiative. It can be completely separate initiatives, and yet still come out near the same time.

 

[LuvtheGoof]

I think what @LuvtheGoof is saying (or how I'm interpreting it) is that Stagg's quote about MM+ coming in under budget is part of that shell game you're mentioning. Sounds like an additional spend of $1B was approved and allocated to the project and that the infrastructure upgrades probably utilized some existing budgets. Even if the RFID locks are part of the NGE project, it doesn't necessarily mean that the cost was included in the $1B figure.

That is exactly my point. I don't care if people think it's a shell game. ALL large companies do this, and it is standard practice. The people here seem to think that just because it's Disney, that they don't follow the normal business practices? Resorts have a budget. Merch and food has a budget. Operations has a budget. A lot of the costs for individual pieces probably came out of these other areas, and there is nothing shady or wrong with Disney doing it that way. They aren't trying to hide anything, it's only the conspiracy people and D&G crowd who seem to think this way..

 

[flynnibus]

But you don't leave each division to prioritize. You tell them, put it in your budget for next year. You tell them, this is what you will get. Doesn't have to be funded as part of a common initiative. It can be completely separate initiatives, and yet still come out near the same time.

Uhh... now you're just closing one eye at a time to see only half the picture.

"put it in your budgets for next year" doesn't make the money just normal money.. That is still an increased budget that needs FUNDING from somewhere. They are all getting funding from a corporate initiative.. and all of that funding still comes from the same parent corporation. So it doesn't matter which side of the line you look at in terms of saying 'was it budgeted or not' - it was FUNDED and hence that's what you count.

 

[LuvtheGoof]

The real catch... and why 'what was the total spend' discussions are really pointless in the end.. is actually the other side of the process. Not what the bosses included... but what the other teams CHARGE to it.

It's what people ATTACH to a plan and roll up their spend under that initiative's umbrella.

OOOO.. new mandate for RFID? Ok, let's upgrade all our phones to the latest and greatest and lump it under the initative as needed for beta testing. OOOO.. new mandate for field service? Ok, lets buy a bunch of iPads and throw it under that cost code.

When people know there are no constraints on a program.. it becomes a self-feeding cycle where excess abounds and accountability is hard to come by. This is why you see such corruption and waste in Iraq/etc...

The bigger and faster something is.. the more people will abuse it for their own gain.

The accounting at the end will be a mess of intentional and unintentional spend... and isn't always representative of what really belongs or not. The only thing that really matters is how much ADDITIONAL spending over their normal levels did they do.

I totally agree you with on this one. No one will ever know exactly what the total for any of it is, since there were doubtless add-ons from each group.

 

[flynnibus]

That is exactly my point. I don't care if people think it's a shell game. ALL large companies do this, and it is standard practice. The people here seem to think that just because it's Disney, that they don't follow the normal business practices? Resorts have a budget. Merch and food has a budget. Operations has a budget. A lot of the costs for individual pieces probably came out of these other areas, and there is nothing shady or wrong with Disney doing it that way. They aren't trying to hide anything, it's only the conspiracy people and D&G crowd who seem to think this way..

It's a shell game. Just like saying "I only get a salary of $1/year" - while you pay the guy $500k a year in covered expenses and $2 million a year in options. The claim of $1 is meaningless... but it makes a good story when isolated from the rest of the facts.

If you take the spend and spread it around 10 divisions... the spend is still the same, even if you try to take the view of 'well my division only spend 1/10th of that' - who GIVES A @$%@ - it's just BS and doesn't tell the full story.

So why are you even listening to the spin? What matters is total spend by the organization... not the internal shell game used to apply it to different buckets.

 

[DDLand]

The change over to RFID locks was part of the MM+ initiative. Just because you used it earlier because it rolled out first doesn't exclude it from the project.

Why are even talking about the door locks and iOS devices? The costs there are literally tiny.

Assuming they were using iPad 2 and iPod touch 5th gen, I'd wager the average price for the device, setup, and case was something like $450 a pop. A rough guess, but I think it should be in the ball park. So around 2.5 million for those 6000 devices. Even if they splurged for better ones it would be less then 4 million. A drop in the bucket.

As for the contactless key terminals? I found 3rd party models similar to those for $200 on the Internet. Say Disney spends twice as much for proprietary versions, and you still get around 10 million. Throw in a couple hundred grand for the team installing, and still not too big of a deal.

The hardware is simply not that expensive. I'd say the lion's share of the billion went to either the website/backend or WiFi buildout.

 

[LuvtheGoof]

Uhh... now you're just closing one eye at a time to see only half the picture.

"put it in your budgets for next year" doesn't make the money just normal money.. That is still an increased budget that needs FUNDING from somewhere. They are all getting funding from a corporate initiative.. and all of that funding still comes from the same parent corporation. So it doesn't matter which side of the line you look at in terms of saying 'was it budgeted or not' - it was FUNDED and hence that's what you count.

See now, I think that's disingenuous. TWDC is where all the funding comes from whether hotels, restaurants, parks, etc. If my overall hotel budget goes up .5% due to buying RFID locks, that is really a drop in the bucket. My belief is that certain parts, like door locks or POS terminals, while they may have benefited MM+, were not IMPLICITLY funded by MM+ money. Please remember that many hotels used RFID cards years before Disney. Again, not having seen it in writing, how can we absolutely say that they weren't planning on changing them to RFID anyway? And I'm willing to bet, that if MM+ had never happened, the door locks, turnstyles, and POS terminals, in addition to the park WiFi would ALL have happened at some point anyway. Just because it may have happened sooner due to MM+, to me, has nothing to do with lumping all of those costs together. They were going to spend that money anyway.

I understand that we can spin any of this all day long to fit any idea or theory that we have, so I think we are going to have to agree to disagree on this one.

 

[flynnibus]

I think what @LuvtheGoof is saying (or how I'm interpreting it) is that Stagg's quote about MM+ coming in under budget is part of that shell game you're mentioning. Sounds like an additional spend of $1B was approved and allocated to the project and that the infrastructure upgrades probably utilized some existing budgets. Even if the RFID locks are part of the NGE project, it doesn't necessarily mean that the cost was included in the $1B figure.

Yes... which is why no one should waste a breath on 'is he lying or not' or really hang their hat on a number he quotes - it's all crap because the answer can be whatever he wants it to be. That doesn't mean the company didn't spend more than he's saying. He can be 'correct' and still be obtuse and avoid the actual intent of the question.

The answer will depend on the motivation. Are you trying to say how effective you were? Or are you trying to say how wasteful someone was? Different motivations will chose to count things differently on what they include to support their position.

What really matters is... what was the increased spending the org as a whole used to make it happen. Not 'budgets', not 'divisions', not slidedecks. How much more did we spend out of our checkbook to make this happen vs if we didn't take this action.

 

[LuvtheGoof]

It's a shell game. Just like saying "I only get a salary of $1/year" - while you pay the guy $500k a year in covered expenses and $2 million a year in options. The claim of $1 is meaningless... but it makes a good story when isolated from the rest of the facts.

If you take the spend and spread it around 10 divisions... the spend is still the same, even if you try to take the view of 'well my division only spend 1/10th of that' - who GIVES A @$%@ - it's just BS and doesn't tell the full story.

So why are you even listening to the spin? What matters is total spend by the organization... not the internal shell game used to apply it to different buckets.

Because I believe that a lot of the costs were going to be spent regardless of whether or not MM+ happened. If you need to know, why not ask about what each part costs? Ask what did adding WiFi to the park cost? What did the door locks and infrastructure to support them cost? What did the new POS terminals cost? What is it costing Disney every month in increased internet bandwidth? Again, I have been a part of large IT projects, though nothing on this scale. As an example, I had to get an entire Air Force base wired with fiber to every building, and then supply ethernet to thousands of terminals inside those buildings, oh, and purchase servers and software to support all of it. Every piece came out of a separate budget, and we even had some units paying for certain items on their own. We also had units that would purchase cable, and have their people run the cable, then we had others that contracted that part out. There was no way to tell the exact cost of everything that went into it, and it took over 3 years to get it done. We didn't have "one" single budget, and it is very possible that MM+ didn't either. It all came out of an AF budget total, but there is no way to get a final figure.

 

[flynnibus]

Again, not having seen it in writing, how can we absolutely say that they weren't planning on changing them to RFID anyway?

Eventually.. they'll also refurbish the rooms 'eventually' and buy all new beds. 'eventually' is irrelevant. They did it to support a program on a specific time, with specific requirements, with specific integration with a property wide system. Stop taking just a tiny slice of the picture and face the whole reality.

Was the motivation unique to MM+? No.. but it doesn't matter. It was funded and executed to make MM+ real.

And I'm willing to bet, that if MM+ had never happened, the door locks, turnstyles, and POS terminals, in addition to the park WiFi would ALL have happened at some point anyway.

Your train of thought is like "well we can't say these costs to refurbish the room are attributed to the Rock Band who trashed it because... they would have refurbished the room eventually.."

Just because it may have happened sooner due to MM+, to me, has nothing to do with lumping all of those costs together. They were going to spend that money anyway.

My god.. please stop. You're killing kittens everytime you repeat this nonsense.

 

[LuvtheGoof]

So as I said, we are going to have to disagree on this. You say that TWDC should provide us with an exact amount of money that was spent on every single small facet of the NextGen/MM+ initiatives, and combine it into one number, even if the money came out of many different organizations and departments in the company. I disagree is all.

 

[flynnibus]

Why are even talking about the door locks and iOS devices? The costs there are literally tiny.

Because the 'tiny' costs add up when you multiply them by instances in the 5 figure range. And every piece of hardware comes with associated amounts of time and people to make it happen and get deployed. A $100 terminal may cost $300 in people labor to actually get deployed by the time the full lifecycle is accounted for.

For every one of those $400 ipads you mention, how many staffers did you train to use them? How many trainers did you train to be able to get through several hundred employees? How many more staff hours did you add to make that happen because you didn't need to do that level of training prior, etc.

Even in this article here... they quote it took a staff of 24 eight months just to change the locks over. How many more project people were involved supporting those people for that period, etc. It all starts to add up when you start looking at the scale and timelines in play.

The hardware is simply not that expensive. I'd say the lion's share of the billion went to either the website/backend or WiFi buildout.

Imagine how much data center space they have spun up and how many instances to support all these new applications and real-time users. Imagine how many transactions they are processing per minute across the property.

The wow factor comes in not when you look at things in isolation... but when you look at it all as s system world at that scale.

 

[flynnibus]

So as I said, we are going to have to disagree on this. You say that TWDC should provide us with an exact amount of money that was spent on every single small facet of the NextGen/MM+ initiatives, and combine it into one number, even if the money came out of many different organizations and departments in the company. I disagree is all.

First... I never said TWDC should give us any number.. in fact I've been pointing out how any number given to you, you should doubt its authenticity to start with because the motivations will influence what you count. I've been saying 'the number is BS - ignore it'.

Second... I can't believe you can't grasp this. One last attempt to expose how dumbfounding your position is.

Apple launches a product... new Apple 80" tvs. Apple will spend money from their R&D division to design and build a spec for their factory to make it. Separately, another division will spend millions sourcing new components, even buying other companies to build up their supply chain, and setup new factory lines to build those TVs. Apple marketing spends hundreds of millions to create new Ads, media, to launch and promote the product. The Apple store division will spend millions devising new retail and staging designs to work out how to promote and position the product in their stores. They will spend millions retrofitting stores to actually roll out the retail model.

So here we have
- R&D to design a product
- Factories and Supply chain to setup to build a product
- Marketing to promote a product
- Retail locations to stage and display the product

All separate divisions.. all EXISTING divisions.. all have budgets. Yet, you don't think the cost associated to bring the Apple 80" TV to market should include those things because... well they would have done some of those kinds of tasks for something anyways???

Or an example closer to 'home' - When you upgrade your servers because the new app needs more capacity... you roll the cost into the app rollout.. not say 'well at some point we would have replaced those servers EVENTUALLY'.

Program costs... regardless of what division executes it... are part of your program's cost accounting.

Its why IT programs count infrastructure, training, maintenance, staffing, etc in their program estimates... not simply the COGS of the software itself.

 

[PhotoDave219]

Meh.

They still spent a Billion dollars and all it did was add more hoops to the guest experience.

 

[DDLand]

Because the 'tiny' costs add up when you multiply them by instances in the 5 figure range. And every piece of hardware comes with associated amounts of time and people to make it happen and get deployed. A $100 terminal may cost $300 in people labor to actually get deployed by the time the full lifecycle is accounted for.

For every one of those $400 ipads you mention, how many staffers did you train to use them? How many trainers did you train to be able to get through several hundred employees? How many more staff hours did you add to make that happen because you didn't need to do that level of training prior, etc.

Even in this article here... they quote it took a staff of 24 eight months just to change the locks over. How many more project people were involved supporting those people for that period, etc. It all starts to add up when you start looking at the scale and timelines in play.



Imagine how much data center space they have spun up and how many instances to support all these new applications and real-time users. Imagine how many transactions they are processing per minute across the property.

The wow factor comes in not when you look at things in isolation... but when you look at it all as s system world at that scale.

The things that you mentioned are not CapEx. You're thinking operations. Though even then those costs are negligable. Say you hire 20 trainers, you're still thinking a couple hundred thousand. Those costs come down overtime too. Not to mention the fact that Disney World was using a similiar tech before for the room keys.

The servers are backend. While longterm those aren't CapEx, the upfront costs were. That's where the money was.

180 million v. 10 million. That's what we're talking about.

 

[flynnibus]

The things that you mentioned are not CapEx. You're thinking operations. Though even then those costs are negligable. Say you hire 20 trainers, you're still thinking a couple hundred thousand. Those costs come down overtime too. Not to mention the fact that Disney World was using a similiar tech before for the room keys.

The servers are backend. While longterm those aren't CapEx, the upfront costs were. That's where the money was.

180 million v. 10 million. That's what we're talking about.

In this topic we are not differentiating between what is capitalized vs ops. The topic is spend - not what will be deprecated or the color of the money. I know what you are saying in terms of orders of magnitude... but it's not about one element that cost $200 million or something... but rather 10,000 different things that all cost a sizable amount of money. You're talking about a program that has been going on for over 6 years.. touching nearly every park of a theme park operation that never sleeps.

The topic is simple - "how much did disney spend to bring this concept to market"
The answer is "You shouldn't trust the number anyway tells you as inclusive unless they are completely independent because you will pick and chose what to include or not depending on your biases. The only number that truly counts is the increase in the bottom line spend of the organization.. and even that isn't what they spent because of new costs being offset by costs they could abandon. It also doesn't account for opportunity costs of not doing other things."

The TL: DR - people should stop arguing over how much the program really costs... short of an auditor... we'll never know anything beyond rough orders of magnitude.

 

[flynnibus]

There was no way to tell the exact cost of everything that went into it, and it took over 3 years to get it done. We didn't have "one" single budget, and it is very possible that MM+ didn't either. It all came out of an AF budget total, but there is no way to get a final figure.

That's the point. It's useless to worry about what 'your budget' was.. your budget doesn't define the total spend on the project. Shift from one bucket to the other doesn't reduce your overall spend.. it just moves whose sheet it's on.

If you send your two kids to the store..

• You tell kid#1 to buy milk and you give him $3
• You tell kid#2 to buy bread and cereal and give him $5

How much did you spend on groceries? $3? $5? or $8?

Ask kid #1, he says $3. Ask kid #2, he says $5. The parent spent $8

Every answer is correct - but the only answer that has any meaning is $8. This is why I how you split the budget is meaningless when the question being asked is how much did you (the the parent) spend on groceries.

Now let's play MM+ accounting. You told kid #2 to buy bread and cereal... but kid #2 can't get to the store without buying a bus ticket for $2. So now when you ask kid #2 what did he spend... he might answer $7 even if he doesn't charge the $2 back to his dad. He just eats it from his weekly allowance because he can do so easier.

As the parent again how much he spent on groceries.. he may say $8 still. The extra $2 he considers ongoing overhead that isn't directly attributed to his 'budget' he set off for groceries.

But did he spend $8 or $10 to get his groceries? Again it's a matter of whose view and what they care to include. What matters at the end of the day is... the family spent $10 to get the groceries to the house. But you would have a hard time asking any of the three to give you an answer of $10.

 

[LuvtheGoof]

That's the point. It's useless to worry about what 'your budget' was.. your budget doesn't define the total spend on the project. Shift from one bucket to the other doesn't reduce your overall spend.. it just moves whose sheet it's on.

If you send your two kids to the store..

• You tell kid#1 to buy milk and you give him $3
• You tell kid#2 to buy bread and cereal and give him $5

How much did you spend on groceries? $3? $5? or $8?

Ask kid #1, he says $3. Ask kid #2, he says $5. The parent spent $8

Every answer is correct - but the only answer that has any meaning is $8. This is why I how you split the budget is meaningless when the question being asked is how much did you (the the parent) spend on groceries.

Now let's play MM+ accounting. You told kid #2 to buy bread and cereal... but kid #2 can't get to the store without buying a bus ticket for $2. So now when you ask kid #2 what did he spend... he might answer $7 even if he doesn't charge the $2 back to his dad. He just eats it from his weekly allowance because he can do so easier.

As the parent again how much he spent on groceries.. he may say $8 still. The extra $2 he considers ongoing overhead that isn't directly attributed to his 'budget' he set off for groceries.

But did he spend $8 or $10 to get his groceries? Again it's a matter of whose view and what they care to include. What matters at the end of the day is... the family spent $10 to get the groceries to the house. But you would have a hard time asking any of the three to give you an answer of $10.

And you just made my initial point. Since no one can answer with any truthfulness or accuracy about the exact number spent, there is no point in trying to state that it cost x dollars. That was really my whole point of breaking costs down to divisions.