Reel Insider

Reel Insider

Expat Bob Marnell has spent time in Australia before, but this time around as CIO, he finds himself "A Yank in Aristocrat's court" Planning, planning and more planning: the CIO of Australia's largest gaming machine company leaves nothing to chance. Even though Bob Marnell admits he is "stronger on execution than on planning", most of his time is spent formulating an IT infrastructure that will allow Aristocrat to cope with fast international expansion. Marnell seems to be travelling easily in the CIO's role at Aristocrat, even though his credentials may seem to suggest he could be uncomfortable in the position. A 28-year career at AT&T, which ended when he retired on the first day of 1997, exposed Marnell to vast budgets, mammoth IT systems and the consumption of technologies for technology's sake. "At one time in the early '70s we had something like 22 large mainframe data centres. We carried one of everything; a little bit of Amdahl, a piece of IBM, some StorageTek. You name it we tried it," he says. His one-year term with Aristocrat in Australia puts him in a totally different environment. He has an IS staff of just 15, and only a handful of business systems to support. "In a lot of situations I've been involved with, the basic systems just aren't happening; or crazy things are going on and a lot of customers are dissatisfied from bad invoicing or something like that," Marnell explains. "Aristocrat isn't like that. I haven't really focused much on those issues, but instead have focused on where our business needs to go five years from."In fact, Marnell's planning activities with Aristocrat began before he took the CIO's job early this year. Des Randall, an old friend who is well known in the Australian IT community after holding a number of executive positions at NCR (which was taken over by AT&T in the early 1990s), moved to the CEO's position at Aristocrat in 1998. At that time Marnell was trying to find his feet as a fledgling retiree in Orlando, Florida. "I was restless. I wasn't ready to join a bowling league or anything like that. So when Des rang me up and said his CIO was leaving, and would I come out and take a look at the entire information systems organisation and focus on a plan to support where the business wanted to go, I said yes." Marnell gratefully accepted the two-month consulting job.

"So for the month of November and most of December I put the plan together. I called it BHAG, which stood for a Big Hairy Audacious Goal. And just before I left, Des asked if I would come out for a year as CIO with one of my objectives to find a successor, which we are in the process of doing," Marnell explains.

The emphasis on planning continues, driven right from the top of the company.

"Des is very, very focused on planning," Marnell says, as he recalls with a grin the exposure both men had to the Japanese way of planning. "In Japan they kidded us about different attitudes, saying the Japanese method is year one plan, year two build, year three sell, and year four hopefully make a profit.

They told us the American plan was week one plan, week two build, week three sell; and if you don't make a profit in the first quarter, downsize and start all over again." It is different at Aristocrat, which is in strong expansion mode and has its sights set on global markets, Marnell explains. "It's common knowledge we have applied for a gaming licence in the state of Nevada, and we have recently been awarded a licence in a province of South Africa. We are the second largest supplier of gaming machines in the world, and we intend to grow the business and will spend a great deal of time and effort on expanding internationally," he says. "Australia is quite a sizeable market, but if we're going to grow we have to look beyond that. We have offices throughout the world, so what I have to put in place is an infrastructure that supports not just the domestic operation, but a worldwide operation."Increased international activity requires more IS support than can be wrung from the existing systems. "We have a small data centre in our manufacturing facilities. Primarily we have a small payroll and accounting system and we have another system called ManFact, which is our current ERP system. From an overall standpoint we have the normal glitches, but there is nothing grossly inadequate with these systems. However, the company has some business goals over the next five years, and my focus is to put an IT infrastructure in place that supports where the business needs to go five years from now." ManFact was designed in Australia for use with the Pick operating system and database. At Aristocrat it is supported on an IBM RS/6000 running under Unix and Universe, but a new-breed ERP suite will replace it as the company moves ahead. "I've been spending a great deal of time with my peer general managers and the level beneath them, and we are at a point now where we have selected an ERP replacement for ManFact. We chose PeopleSoft," Marnell notes. "We're also bringing in a product called CorePoint, which IBM is offering us. Basically it's going to be the foundation for our sales and service hotline. It will be one-stop shopping where we can handle customers' requests, be they requests for service because something's not working on a machine, or an invoice is incorrect, or something like that. It's my plan to implement those -- CorePoint and PeopleSoft -- in phases over the next 18 months. Right now we are in the process of preparing and parallel testing the PeopleSoft human resources and payroll modules."The decision to move on from ManFact was made before Marnell arrived at Aristocrat, although the company had not then selected a replacement ERP system. "Aristocrat had hired a consulting company that spent a considerable amount of time looking across the company, talking to our executives and documenting where they wanted to take the business. That was compiled into a fairly thick report. By the time I arrived here it was a matter of saying now we understand that we need to begin positioning the IT infrastructure for growth, and we need to pick something, so I picked PeopleSoft," Marnell says.

"I in no way, shape or form can sit here and say, line-by-line, function-by-function, that it is clearly superior to anything else available.

There are several ERPs out that that we think are adequate or excellent and the companies behind them have impeccable reputations. But there are things we want to do in unique fashion to produce a unique product -- different from typical products -- and I felt PeopleSoft would give us the best flexibility to grow the business. More importantly, if the business needed to make some changes, because customers sometimes want things a little different, I felt it could support that requirement.

"But we needed to get on with it, so I made a decision," Marnell says. That relatively clear-cut decision has inevitably raised further issues. "We can't afford, as some bigger companies do, to radically change our architecture every couple of years. When we make our business decisions with regard to vendor selections, we have to be sure they are carefully thought out," Marnell says.

Now that the commitment has been made to the software, he has appointed consultancy TriPoint, which has expertise in PeopleSoft, to devise a hardware architecture in keeping with the grand plan. "[TriPoint is] going to look at what we need to run the entire PeopleSoft suite of modules, because we're going to use PeopleSoft for everything. Besides human resources and payroll, there'll be sales and manufacturing and product planning," Marnell says. "We have to consider whether we put all that software in one box, or we put some pieces of the application in one box and other pieces in another box. We're using the Oracle version, so do we have an Oracle server separate? Finally, if we have three or four mid-range boxes, whether HP or IBM or whatever, do we put storage in each of those boxes or do we go to something like central storage management? So we're looking at EMC as well.

"What I have TriPoint doing is planning this architecture to be vendor-neutral.

But I'm open, and we're looking to see if, long range, we will stick with IBM or maybe examine other alternatives. Going forward, we'll make an evaluation as to where we want the actual business-critical applications running." In the meantime, the current systems must not only be maintained, but some of them must also be enhanced to meet essential new business requirements.

"Implementing PeopleSoft and keeping existing systems going in harmony is a hell of a job," Marnell acknowledges. A New Zealand company, Condol, is acting as systems integrator for the implementation of the first two PeopleSoft modules. "I've got my people sticking with them, so when they leave we'll be able to support that. Now I'm in the process of examining various alternatives as to whom I might bring in for the hard-core PeopleSoft modules, like manufacturing, sales and finance. At the same time, we will bring in some additional staff. When we bring a new partner in, my staff will sit next to them and when we eventually implement and the partner goes away, we will be able to support the operations going forward," Marnell says.

"For the 1999/2000 plan, I will almost physically separate the IT staff into two basic entities. One will maintain the current environment and the other will work on plans for the future, because at that time it can't be a halfway job. I need people full-time and dedicated." The ructions and ramifications of the new infrastructure are not confined to information systems staff, Marnell notes. All senior Aristocrat staff also contribute and must be kept up to speed. "One of the things I cannot stress enough is the rapport CIOs must have with their peer general managers," he explains. "For example, [recently] we had a meeting and told everybody we're about to embark on the PeopleSoft implementation. We told them we know that they will need some things in the systems to change -- perhaps if a legal jurisdiction alters some laws, or a new accounting procedure is adopted or we may bring a new kind of machine into the factory to hold the blocks for our poker machines. All of those things mean changes to ManFact; but I told the managers that whatever we do, we keep the business running and, most importantly, provide the best service to Aristocrat's customers.

"And I said that if there is something that is going to require a six- or nine-month effort, and it's got to be done because it's business-critical, you've got my commitment we're going to do it. If it is just something that's nice to have, but its features will be in PeopleSoft, then we ask you to hold off on this," Marnell says. "We got tremendous cooperation, because what I try to focus on with my peers is that while we have customers out there, they are my customers [too]. "So if you can establish that kind of relationship with the sales lead, the marketing lead and the manufacturing lead, then things become a little bit easier. Alienate them and it becomes a very difficult task to keep the current environment running and to plan the new environment," he says. So far, the IS group has not undertaken a great deal of detailed work beyond the human resources and payroll implementations. However, they have taken an important step by establishing a group of what Marnell describes as process owners whom he believes will be vital to smooth adoption of the PeopleSoft modules. "We have a process owner for what we call the financials, we have a process owner for manufacturing and we have a process owner for product development. And when we get into the phases of implementation, those people will call the shots for their processes," he says.

"For example, the process owner for the 'quote and cash', which is what I call simple sales handling, has accepted the task to speak for sales managers all over Australia and internationally. Rather than chair meetings, he will speak on their behalf from a process standpoint about how we will build the PeopleSoft sales order entry, how we will track orders, how those orders will get shipped from the plant, how we put the automated-configuration modules in, and things like that. "Without this process we could spend tonnes of time designing, because everybody's got their own ideas about what should happen," he says. "About the start of the new year we will begin putting process teams in place. I'll have my new integration partner on board and we will then begin examining the big question of the sequence of implementation. For example, if you implement the manufacturing modules, then you probably want to implement at the same time accounts receivable and accounts payable," Marnell says. "I'm not an expert on all that and my knowledge of PeopleSoft is very thin. But the overall implementation has to be very, very carefully planned, because we've got a business to run."Keeping that business running while implementing the new ERP software will also require the employment of additional staff and Marnell is keen to try a new tack in his recruiting. "Our staff is unusual because most of the people are multiskilled, what I call best-in-class experts. Their talents are not only in NT, but also in possibly the entire Microsoft Office suite." He laughs. "This is quite different from the environment I've come from, where everybody has their own dukedom: 'Don't tell me about this. I'm only in MVS. If you want to talk Unix, go talk to the expert'. "When we recruit we look for people who have had experience in more than one specific skill; but that is hard now because of the year 2000 work. Four years ago some of my old Cobol or PL/1 programmer mates who had retired from AT&T and were looking for some side work, were lucky if they could get $US20,000 a year. When I left to come here, the same guys were getting $US85,000 a year and they'd be on the job six weeks and a head-hunter would call and say 'I'll get you $US110,000 in Minnesota'. It just inflated the whole thing," Marnell says.

"Some people say the year 2000 is the rebirth of MVS, but the universities aren't training in that now. So, in the process of the next two or three people we're going to bring in, who will focus on PeopleSoft, I want to do some experimentation in hiring uni graduates," Marnell explains. "My assessment is that when somebody says 'I've got 35 years experience of programming or data processing', with the way this business is moving that doesn't impress me any more. It's like medicine. If, god forbid, one of my grandchildren got hurt, I would probably rather have someone five years out of medical school who has studied all the latest techniques of brain surgery than someone who's been around for 20 years. "From what I've seen, kids coming out of universities and high schools now have understood the Internet for the past eight years, and they understand NT and they know how to build small databases in Lotus and they know e-mail systems. And they're bright, young and enthusiastic. I believe I can accomplish more with them than, in some cases, someone who has 10 or 15 years of experience. I'm not discounting those people, but I have a lot of faith in youth -- in spite of my age!"The new recruits will not, however, help with the housekeeping duties that keep making demands on a CIO's time and attention while the business keeps on running. Year 2000 compliance issues will not go away. Marnell notes that progress towards compliance on in-house systems as well as on systems supplied to Aristocrat's customers was well under way before he joined the company.

"Most of our hard core business-critical systems are vendor-provided, off-the-shelf, and a great deal of compliance work was done with the vendors that provided the applications as well as by ourselves," he says. The gaming machines that have been sold to customers and the software supplied with those machines are another issue. All the year 2000 work in that arena was undertaken by Aristocrat's R&D organisation. Marnell, who has previously done some consulting work in the Y2K field, is confident about Aristocrat's preparations, but is not willing to give any guarantees. "I don't think it's accurate to say we are compliant," he admits. "I think it is accurate to say we have done everything we feel we can do.

"While everybody seems worried about midnight December 31, 1999, any glitches in our core systems will start happening now, because right now customers are ordering things for delivery in 2000. So unlike the people that say they're not going to fly in aeroplanes, we don't see anything like that. We're giving it all the due diligence we can, and we're looking good, by all reports." It is a comfortable position for a man to be in half way through his first -- and possibly only -- year as CIO. Marnell acknowledges that he is not "the world's expert on being a CIO", but insists he is learning fast. "Even at my age I can learn." He counts among his good friends Dwight King at Telstra and Lauren Fite at Westpac, and although he hasn't contacted them since coming back to Australia, he says he would do so if he struck an intractable problem. "They have much bigger operations, and much bigger problems," he notes. "I'm not hesitant, if my people or my peers come to me with a problem, to ring up one of them and ask how did you attack this problem, or what did you do there?"I'm not on any ego trip. All I want to do is work with the company as much as I can and put something in place that will help them move on."Isn't IT Ironic? In the CIO's chair for the first time, Bob Marnell keeps technology at arm's length, believing it is not the CIO's job to be a technocrat. "In my experience a lot of people in information systems get caught up in technology," he explains. "They establish standard operating environments and standard protocols, and sometimes the end users become slaves to the system instead of the systems supporting the end users." So it happened that in selecting PeopleSoft applications as the basis for Aristocrat's future ERP requirements, Marnell relied almost totally on the expertise of others and has not tried to master the intricacies of the software. This has created something of an irony, since PeopleSoft has proudly announced that Aristocrat is one of the first 20 licensees in the world for its new Enterprise Performance Management (EPM) suite. PeopleSoft claims the new applications have been developed because "traditional methods, such as cost accounting and return-on-investment analysis are failing to deliver the necessary metrics and information to effectively manage the businesses."EPM is claimed to let "organisations . . . identify operations and activities which both add and destroy value, and take appropriate actions as a consequence to maximise shareholder value, improve customer satisfaction, optimise return on investments, effectively manage risk, increase profitability, and reduce organisational costs." PeopleSoft says the EPM software integrates into existing ERP systems through applications like general ledger. The suite contains analytic applications that were released in 1997, and will be extended this year by the release of modules for balanced business scorecard, activity-based budgeting, workforce analytics, strategic planning and simulation and workbench. -- P ScottThe Kitchen Cabinet(s) Bob Marnell still carries with him a hint of time spent in the armed forces. It may have something to do with his bearing, or the close-cropped hair, or perhaps his direct and no-nonsense approach, which avoids what he terms "windage". In fact, his military service was a mere six years sandwiched between university and his 28-year career at AT&T. He was well imbued with the spirit of the giant US corporation by the time he made his first trip to Australia in 1990 at the request of Ron Smith, then CIO of Telstra. In fact, Marnell was "loaned" to the carrier for a year "to bring in some North American principles" and sort out some problems being encountered during the installation of numerous new technologies in systems around NSW.

"The first thing I did was put a sign in the data centre that read: 'Let's quit asking what the North Americans are doing, let's let the North Americans ask what we're doing instead.' It was a fantastic year," Marnell says. "Frankly, I thought the problems weren't technology issues, but more people issues; but there was a real turnaround." Marnell concluded his one-year contract and returned to the US, only to be sent back in 1993. "AT&T purchased NCR, and NCR was building a system for Telstra called Phoenix and was having some difficulty. Since I had some contacts they asked me to come out again. "I spent that year in Melbourne and as I was getting ready to go back to the US, Des Randall, then managing director of AT&T/NCR, asked me to stay on as professional services director, which I did in Sydney for two years."On January 1, 1997, Marnell retired and set about improving his golf handicap.

"My wife gave me an eviction notice," he jokes. "She said: 'Touch my cabinets in the kitchen one more time and . . .'" Again Randall re-opened the Australian connection and Marnell travelled there for a short term as consultant, and now CIO on a 12-month contract. He is not sure whether he will come back after 2000. "My eventual goal is still to play a better game of golf and stay out of my wife's kitchen," he concludes. -- P Scott

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