IW500: Harrah's Places Its Bet On IT

The $10.8 billion resort and gaming company outlines ways to grow by providing new services, during a discussion at the InformationWeek 500 Conference.
Harrah's CIO Tim Stanley is helping lead the way for the company to grow without having to invest billions on expensive new hotels and casinos, CEO Gary Loveman said Tuesday.

"In a business that loves to consume capital, we need to find ways to make our businesses profitable without building multibillion-dollar properties," Loveman said. Harrah's is looking to improve profits by finding better ways to deliver services.

Loveman spoke along with Stanley at a discussion of "Tomorrow's CIO And What The CEO Looks For," moderated by InformationWeek VP and editor-in-chief Rob Preston.

Stanley wears multiple hats at Harrah's. As CIO, he oversees a staff of 700. He is also senior VP of gaming, where he oversees casino resorts responsible for two-thirds of the company's revenue. And he's VP of innovation, overseeing a multidisciplinary team of 10 people.

Harrah's is working on doing a better job analyzing customer transactions to determine patterns of spending and better anticipate and influence spending, Loveman said. The hospitality business offers a broad range of services to its customers: Harrah's feeds its guests, parks their cars, and puts them to bed at night. Harrah's is developing systems to suggest services to customers based on transactional information received in real time, rather than waiting until he customer has checked out, as has been done to date.

"The guest will have a better and richer experience, and say, 'You know me,' and they'll be more likely to come back," Stanley said. The goal is to keep customers on the property; in Las Vegas, Harrah's competition is just a stroll across the street.

For example, if a guest who enjoys fine dining checks in, Harrah's systems would automatically hold a table for the guest -- assuming there is one available -- reserve tickets at a show afterward, and then suggest the activity with a message on the guest's mobile device, Loveman said.

"In Vegas, we're very fortunate that people don't plan ahead very often. The person who is sober and has money directs," Loveman quipped.

These principles could be applied to other businesses, Loveman said. For example, ski resorts and supermarkets acquire huge amounts of data about customers and don't make the most effective use of it.

"Groceries send weekly ads to lifelong vegetarians and cat-food offers to dog owners," he said. The customer information is used to offer discounts but not to influence buying patterns. Preston added that grocery stores reward lighter customers with shorter checkout lines -- express checkout for people buying just a few items.

Some of the efforts to track customers misfired. For example, Stanley personally tried greeting customers by name and talking with them about their past business history at Harrah's, but the customers found that experience creepy and Big Brother-ish.

Preston asked where Harrah's draws the line with regard to respecting customer privacy. Loveman responded that it's not too much of a problem -- customers in the gaming business expect the property to keep track of their activities and don't have a problem, so long as the information is accurate and they get the benefits they think they deserve. For example, people who lose a lot of money expect to get their lodging comped. Harrah's draws the line at giving data away to third parties -- it doesn't sell or give away customer information. Earlier in his career, Stanley wrote an academic paper on rewarding employees based on customer interaction. Preston asked if Harrah's applies the same principles. Loveman said it does: Employees get bonuses based on customer satisfaction, and those bonuses are independent of the financial performance of the property.

That applies to the IT department, where staff and managers get bonuses based on the quality of their interactions with internal customers. IT staff and managers get 360-degree reviews, which include peers, supervisors, and internal customers, Stanley said.

In his role as head of innovation for Harrah's, Stanley leads a team with backgrounds in IT, consumer products, technology, and consumer marketing. The team focuses not just on coming up with new products, but also on means of delivering those products. They're looking for new channels of revenue or business areas for Harrah's, ways to differentiate gaming and improve customer interaction.

For example, the team is looking to improve the slot machine business. The company is looking to bring the qualities that people enjoy in table games, including interaction with other players, to digital games. It's looking to develop digital games that remember your state between sessions, and allow players to move from one level to another. And it's looking to improve stickiness of the game, to make the player want to return even when offline and disconnected.

Loveman said he has worked with two extraordinary CIOs, Stanley and his predecessor. He said he's looking for CIOs who are intimately connected with the business. Technologists often think they have to be order-takers. They believe they have to deliver whatever business managers ask for and walk around with lists of things to do.

Loveman also said he likes Stanley because Stanley doesn't whine.

Loveman praised Stanley for helping Harrah's grow through acquisition, integrating the IT systems of other companies at a fraction of costs. Harrah's has made several acquisitions, including a $9.4 billion buyout of Caesars Entertainment in 2005.

Stanley has been CIO at several companies; he looks for people with longevity inside the organization who know how to get things done. He said he also looks for player-coaches: people who can do the day-to-day work and rise above it to look at business issues.

Stanley looks to the CEO to provide business leadership, with a vision of where the company is going. He said Loveman lets his senior managers settle disputes among themselves, but also knows when to step in and make decisions.

Loveman said that Stanley is a "grown-up," and Loveman mostly lets him work independently. Stanley delivers when left alone, and that induces Loveman to leave him alone even more. Stanley's closest relationship is with marketing, not the CEO.

To learn more about Stanley and the work he's doing at Harrah's, download a free PDF of our Chief of the Year profile of Stanley. Also, download the InformationWeek 500 Analytics Report -- free for a limited time.

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