Harrah's Entertainment leverages BI

Harrah’s Entertainment was founded by Bill Harrah in October of 1937 and has always focused on developing deep customer relationships.  As it entered the new millennium, Harrah’s had 21 casinos, over 40,000 employees and more than 19 million customers.  Historically, each casino was an “independent fiefdoms” and little information was shared around customers and their preferences.

 In 1994, things at Harrah’s began to change with the introduction of WINet, Harrah’s Winners Information Network, which included both a patron database (PDB) and a marketing workbench (MWB).  By 2000, Harrah’s had over 300GB of data for the PDB and 360GB in the MWB.  Data was captured from a variety of sources including their hotel systems, tournaments and special events, slot machines and table games, and from feedback from their loyalty program.  “With WINet, the foundation was in place for a new, more scientific approach” (Watson & Volonino, page 9), closed loop marketing.

Closed loop marketing requires that you define marketing objectives, test procedures, and expected values for the selected customers.  Based on data already contained within the WINet system, the test is “…designed to provide the right offer and message at the right time” (Watson & Volonino, page 9). Incentives are customized to specific segments to establish, strengthen, or invigorate the customer relationship.  Responses are tracked and analyzed to determine not just the response rate, but metrics such as revenue generated, increased frequency of visits, per visit profitability or cross-play.  Harrah’s uses these values to determine the net value of the campaign which is used for continuous improvement to each marketing approach.  “Literally thousands of experiments of this kind have been conducted” (Watson & Volonino, page 11).

  Through the leverage of their WINet system which utilizes a Unix Gateway to gather information from AS400 systems (capturing slot data, hotel guest information, etc.) for use in their PDB and finally the MWB (data warehouse), Harrah’s has been able to implement closed loop BI. 

References

Watson, H., Volonino, L. (n.d.). Harrah’s High Payoff from Customer Information

Investigating Business Intelligence at Guthy-Renker

In the case study, Business Intelligence at Guthy-Renker, development of business intelligence both from a technology and process/human perspective is explored.  The IT group at Guthy-Renker tended to be more task and less strategically oriented prior to the development of the BI initiative which now focuses on three pillars: technology, business process and organizational readiness.

There are many strengths to their new approach, including the selection of proven project managers for BI team leadership along with a consultancy with over 15 years of history.  Additionally, they have established governance via a PMO with top management for their steering committee, insuring appropriate attention and collaboration.  Finally, they have selected an open architecture which allows them to integrate data from multiple sources and scale up quickly. 

However, there are a few weaknesses that make Guthy-Renker’s BI initiative challenging which include their structure as a value chain versus a supply chain.  This limits their ability to standardize both IT systems and metrics.  They have also chosen to “cherry pick” open minded individuals for inclusion in their BI discussions and roll-outs, potentially limiting their ROI.   Another area for improvement is making sure that IT professionals understand that bug-free reports are not required and that quick turnaround with good enough reports is more desirable.   

Because the business is starved for information, there is a danger of the new BI data becoming distracting.  It is important the management tempers its expectations.  The BI team must teach users to utilize and interpret the available data in order to avoid over reaction and unrealistic expectations.  . 

References

Clark, Joseph. (2010). Business Intelligence at Guthy-Renker: The Promise and Challenges of Sensing the Pulse. (1.2 version). California: USC Marshall School of Business