Tim Stanley, senior vice president and CIO at Harrah's Entertainment, sat down with Computerworld at its Premier 100 IT Leaders Conference Monday to talk about the lessons learned from integrating IT systems after its purchase of Caesars Entertainment last year. "Speed is key," said Stanley, who also detailed some of the other IT projects Harrah's is working on. Excerpts from the interview follow:
What is the current status of integrating Caesars' IT systems since the acquisition closed in June?
We have broken it up in three phases. Infrastructure itself is completed. All of the back-of-the-house finance, payroll, procurement, human resources and the like was completed before the end of the year. The third and arguably the most impactful customer and operational piece started the day after the transaction closed, [and] we completed our first entire front-of-house system conversion ... to a common set of platforms on Dec. 7. We have now completed eight properties of 13, with our ninth property starting [Monday night]. We'll be done around the middle of April. We will relaunch Total Rewards [a customer loyalty program] as a brand that we're calling TR3 and come back with the second round of enhancements at the tail end of that.
You mentioned that the day the transaction closed you were actually sending data back and forth between the properties. What are some of the main lessons learned from this acquisition in terms of integration that you can take forward with future acquisitions?
Different companies you merge or acquire may have different value propositions. At the end of the day, we figured out that moving quickly, more aggressively, is important. The quicker we get people, processes and systems integrated, the better. Speed is key. The agility piece does play in because you have to look at what are those nuances and differences. If you went in and just said, "Our stuff is going to be the stuff that you implement across the board," you end up with a variety of different gaps in business processes, customer issues [and] employee resistance.
In the case of Caesars, we then understood we wanted to get in very, very quickly and put joint integration teams in place. We also brought in third parties that we could use in this clean-room type of environment [while restrictions were in place pending regulatory approval] that we could use to do a lot of data discovery and figure out the customer overlap and the cultural attributes. So we had all that in a "safe house" where we could get results or understanding out of it but not touch the actual architecture, data or customer information. As a result, we got much better alignment.
The value of this was not about efficiencies; it was about revenue upside. Fully two-thirds of the value of the [Caesars] deal was on the revenue upside potential, so it was compelling to get our approaches, management processes, tools and technologies in as quickly as we could.
Harrah's has focused heavily on operational analytics for your Total Rewards program. In the future, where you will be able to leverage operational analytics?
The core concept of operational CRM is beginning to -- and will -- permeate a lot of our operational touch points. Now we are beginning to push into the service delivery side: How do the best customers get the best service on the floor? Next will be an opportunity to more pervasively get it into a number of the other operational areas -- hotel, other channels and touch points, kiosks, the in-room TV where we can be more personalized. So when a customer comes to us in Las Vegas versus when they are in St. Louis, we can see their value historically and what we predict their value to be.
You touched on the notion of co-sourcing at Harrah's and how that has been productive for your application development by shortening productive times by locating vendor employees internally. How does that work, and who are these strategic partners that you bring into your application development groups?
There are some vendors that we have looked at as strategic partners and worked with in this co-sourcing model. The idea is there are certain initiatives we wanted to drive, and it is not always about delivering something itself but how you do that smarter. We have generally tried to select people that bring some unique set of technology and vision and a sense of collaboration that we can work well with. I retained Sapient to work on some of our initial Harrahs.com and Total Rewards and other relaunches. What I liked about them is they did a lot of firm, fixed-price bids. That forces you to be really good at how you scope and manage that work. We've actually co-developed a lot of our methodologies with them that we call Harrah's Integrated Toolkit that helps us figure out requirements gathering.
We have generally about five or 10 at any given time strategic partnerships that we have been able to leverage on a repeatable basis. Implementation is a challenge for us as we continue to scale. We looked at where we need help today and what the big picture is and for our newest co-sourcing project selected Siemens, given their global scope and scale and reach. They have been helping on some of the rollouts on the integration procedures and from that, if we find there is good synergy between the two companies ... then we will continue to ramp up that partnership and investment.