Winning Ticket

Winning Ticket

At Golden Casket Lottery number crunching is serious business, and its CIO is always serious about the businessIn the eyes of companies that stamp out forests of steel or pump lakes of oil, the online gaming industry deals in fairy dust. Its business consists of collecting diaphanous skeins of digits, and juggling them to match a winning sequence. Then it transfers other numbers to the bank account of the lucky winner. Like fairy dust, the product is clean, weightless and occupies virtually no space. Such qualities appear magical to the industrial heavy lifters compelled to wrestle slabs of steel and barrels of oil through production plants and into distribution nets. But the online gaming business is equally magical for information systems managers who hunger for boardroom respect. Companies that make physical objects like cars or washing machines usually reserve star billing for the production process and cast their information systems in a supporting role. But for online gaming, the process of sliding pure information down a copper wire and manipulating it inside a computation engine is the core business. Thanks to this, technology executives in such companies rarely voice the complaint -- common among many of their peers in other industries -- of senior management treating them as second-class citizens.

Grant Burrows, director of Information Technology for Queensland's Golden Casket Lottery Corp, says it is not a question of respect but rather the relevance of IT's contribution to the business. "IT is important in one level or another, in one way or another, in most businesses today. In a business like Golden Casket's, it is of frontline importance. There are other businesses where it is important but not frontline. In those environments, it seems to me, IT needs to demonstrate what it contributes and why it is significant to the business." Unless that's done, there is little ground for complaint about attitudes to the IT manager's role, Burrows believes. "You have to look at how you can contribute. If the contribution is significant to the business, it will be treated that way. In a lot of businesses, IT has a place but it is not strategic," he says. "It is about giving due weight to something that matters to the business. "There is no doubt that people who run an online lottery understand very, very quickly and in some depth the criticality of the IT function. It certainly means there is a forum in which the importance of IT is realised. So much so that if an IT director wasn't able to contribute to the discussion of where the business is going, that person would be seen as unsuccessful," Burrows says.

According to Burrows, anyone in a senior IT job must have a business outlook to complement his technological outlook. "If not, just tick the box marked failure, because if you can't contribute to the general strategic direction of the business, you can't do the job." Golden Casket is Queensland's government-licensed lottery body that in the larger frame fits into the entertainment industry. "We see ourselves in gaming and entertainment, with more and more emphasis being put on the entertainment aspect," Burrows says. In hot competition with other forms of leisure time amusement, Golden Casket reaps nearly $700 million in annual sales from a mix of lottery products that include Gold Lotto, Oz Lotto, Powerball and Instant Scratch-Its. Counting its poker machine monitoring subsidiary Golden Gaming, Golden Casket employs more than 200 people, of whom 70 can be classed as IT staff. A significant chunk of them are operational people such as help desk support; however, the huge ratio of IT staff to total numbers is a good reflection of the importance of IT to Golden Casket.

Pointers to Burrows' A-team status are his position as a direct report to Golden Casket's CEO and his role on the senior management team, along with the key division heads of marketing and sales, corporate services, business development and audit. This executive management group is a forum for collective discussions of strategic plans and other issues of interest to the business. Being part of the A-team gives Burrows a clear perspective on how IT must mesh with the other key parts of the Golden Casket business engine. "IT in a sense is the factory in which we manufacture and manage the process; but although IT embodies the product, the intellectual creation of the product resides with marketing," he says. "They are the people who are in touch with the end customer. Good marketing and good customer service are critically important." The trust customers have in the integrity of the process by which winning numbers are selected and published is the fundamental plank supporting Golden Casket's business. Underpinning the lottery's integrity are the security and encryption capabilities of computer technology But even in that area, IT can't go it alone. "Technology is only one in a whole series of actions that are taken to ensure everything that happens is correct," Burrows says. For example, IT systems may detect the winners, but the audit division independently verifies the results, and success rests on the smooth interworking of the two.

Upgrading Core Systems

Golden Casket this year is deep into a $30 million-plus upgrade of its core software gaming systems and the hardware platforms they rest on. While large in absolute terms, spread over a seven-year depreciation period the upgrade doesn't push Golden Casket's IT costs far above 2 to 3 per cent of its annual revenues. According to industry analyst GartnerGroup, that is a level common in organisations which make aggressive use of information technology. Golden Casket's other large IT cost component, aside from labour, is telecommunications charges. It reaches its customers via more than 1000 terminals on retailers' counters around Queensland and is connected via Telstra lines to its Brisbane headquarters. "Our dependence on telecommunications is crucial and the convergence of technologies in that area is a vital future issue for us," Burrows says. "A reliable telecommunications service is a number-one requirement for the ability to deliver an online lottery to an entire state. The costs are definitely coming down, but a tougher issue is exploiting opportunities for use of higher bandwidths."As an illustration, Burrows advances the scenario of providing online video to newsagents in the further reaches of Queensland. "You couldn't do it at today's bandwidth, but the community is more and more going to demand the bandwidth necessary to do that sort of thing," he says.

Productivity Windfall

Golden Casket recently generated a rush of productivity benefits when it joined the graphical user interface generation of financial management systems. It went live last year with Finance One, a small-to-medium enterprise system from Australian developer Technology One. Completed a month ahead of its planned three-month implementation schedule, the package is being used to track expenditures on the core gaming systems upgrade. In terms of productivity gains, the new financials package slashed month-end reporting delays to four days from 10, and Golden Casket believes it can reduce that to one day. "Our board is certainly happy to get relevant information quickly so it can spot trends affecting either costs or profits," finance manager Allan Robb says.

"They have always had the revenue figures available on demand, but now we can present the full profitability picture to them." From Robb's perspective, an equally important transformation wrought by the new Windows-based package is the freedom it grants line managers to construct their own ad hoc enquiries. "A number of managers throughout the organisation can go online and drill down for the information they want without having to ring up the finance department," he says.

Adoption of Finance One chopped the report queues that plagued the earlier package because its report writing tool was complicated and coding-intensive.

Only a few IT staffers had the requisite programming skills and reporting bottlenecks developed. Under Finance One's simplified reporting tools, the pool of IT staff able to write reports has expanded six-fold, largely dissolving those bottlenecks. According to Robb, the new financial system also accelerated the integration of the Golden Gaming subsidiary acquired last year. He says that the strengths of the package were leveraged to bring the poker machine monitoring subsidiary up to speed with monthly reports and a set of audited accounts in its first 12 months of operation.

Revenue Driver

The application of technology to save costs and increase efficiency remains important to the Golden Casket, Burrows says. But the business looks to IT as a revenue driver as well. For example, telecomms ticketing links with its retailers may deliver other services to them. Burrows says he must be alert for opportunities to apply the technology to the direct business. "One that jumps out is the use of the Internet. Obviously, you can make use of it on the back end for functions like internal purchasing of goods and services, but it also provides a potential medium for communication to our agents and customers," he says. Focusing on such issues, which may improve business performance, is important in how the IT role will be regarded by the larger organisation, Burrows believes. "There isn't any magic in titles like IT director or CIO. The job should simply carry a title the business is comfortable with," he says.

"The emphasis of the job is all about the availability of information, not about technology." In one sense, Burrows' job resembles that of the canary carried down coal mines to warn of dangerous gases. He is expected to sing out when he detects technology changes that will impact the business or new ways in which existing technologies can be harnessed. "There is a fair requirement on any IT manager to keep an eye out for things that are happening in other types of businesses.

You can't have tunnel vision; you have to look for what crosses lines," he says. The most sensitive issue for both Burrows and Robb in recent times has been maintaining the stability of Golden Casket's gaming system until it completes the upgrade on its ageing technology. "We are highly sensitive to downtime, because of its immediate impact on customer service," Robb says. That concerns not only Golden Casket but its agents, because when the system is down, they can't sell products. Worse, a small but finite proportion of their disappointed customers might never return, even for a chance to be sprinkled with fairy dust.

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