Les Ottolenghi on Digital Transformation and TBM
Executive Vice President & Chief Information Officer
Caesars Entertainment, headquartered in Las Vegas, is one of the world’s most diversified casino-entertainment providers with more than 55 destinations in five countries. Like most businesses today, Caesars is looking to digital transformation to take its business to the next level. Emerge sat down recently with EVP and CIO, Les Ottolenghi to talk about how they are using TBM to support their digital transformation efforts and build the integrated resort and gaming experience of the future.
Hello Les. Thanks for taking the time to speak with us today. Why don't we just jump right in? It's my understanding Caesars Entertainment won the 2017 TBM Award for Strategy and Planning. So, I'm just wondering, how long have you been doing TBM and what are some of the benefits that you've found by applying the methodology?
Sure. I've been working with and on TBM since 2013, so prior to my tenure here with Caesars Entertainment working as the global CIO for Las Vegas Sands. I actually met with Apptio and spoke with their founder, Sunny, and really found an engaging business model for IT, which has continually lacked a business management platform.
HR has human capital management. Accounting has GLs and ERP; they've got all sorts of tools to run their business in terms of data. Marketing has CRM. So why not IT?
When you look at the TBM proposition, it's really a couple of things for me. One, the ability to understand what's happening, the heartbeat of IT, from a project, portfolio, and development point of view by looking at all of the project accounting and progress from a single-pane-of-glass.
In our case, we integrate with ServiceNow. We call it CaesarsNow and that integrates with Apptio to inform our leadership team of how we're performing on systems that are already in operation or are being deployed, so we can see what services we're providing.
And then that progresses through to get an understanding of our real-time costs as well as what are our other additional operating costs and, frankly, the value back to the business. And now that we are in a cloud-first model, we need to see what is the actual return on investment and allocation for each one of the investments we're making in technology so that we can go from managing assets to driving business transformation and specifically digital transformation?
When did you go to a cloud-first operational model?
I arrived here in January 2016, and I would say about five days later when I had to present to the board. Looking at the ability to modernize our infrastructure and our applications, a cloud-first approach was the least expensive, most secure, and scalable manner in which to go to something that would allow us to operate as a more nimble business. To get to a digital leadership position within the industry we had to go to a cloud-first strategy.
Are you primarily focused on SaaS or are you also talking infrastructure?
So you run a hybrid model?
We do run a hybrid model and that is a necessity for compliance due to the regulatory nature of our industry. And it's a necessity when you look at latency with the customer. Being real-time with the customer requires a hybrid approach.
How has TBM helped you achieve that?
Well, when you look at hybrid business management, you view and manage on-prem workloads, server, storage, and data center allocations, you can easily see the financial budget detailed alongside the technical details and make a decision on spend and priorities.
You can view infrastructure rate cards, for instance. And when you do this, it's easy to make a decision on, for example, deploying IoT onto the casino floor to get a real-time understanding of our customers' spend and loyalty tiers.
It is really important to understand hybrid business management or cloud management in order to understand what our reinvestment is for our most valuable customers.
Then there's cloud management, of course. You need to monitor for load and usage so we don't get a bill that's not rationalized and orchestrated across multiple providers. You have to have a single view of what that looks like. And, of course, it's the visibility into what we migrate and what we don't migrate, and the business case behind it.
So you're gaining insights into the hybrid cost of workloads versus pure cloud costs, or SaaS/application service models. This is sort of meat and potatoes stuff.
Ultimately, in a much more advanced way, a sort of 21st Century way, it’s about how to manage governance. What do you centralize? What financial controls and variances can you measure in order to understand the proper forecast and projection as well as the business outcome you had originally intended from a project?
That visibility gives you that ability to look at resources in a more agile way, so you prioritize the efforts that will deliver the highest value.
What is the split between SaaS, what you're hosting in the cloud, and what you're keeping on-prem?
Some of that is proprietary but what we've been able to do is rationalize where we put that balance. In February 2016, we started with 880-plus applications on-prem. We reduced our entire estate to below 270, and we’re working toward about a 50/50 split between cloud and on-prem for 2020.
Digital transformation is one of those slippery slope words, right? It means a lot of different things to a lot of different people. What does it mean for Caesars?
I think that's a great question because it's clear to us, digital transformation means starting with actual technology modernization which enables a nimble business model. Meaning something where you can immediately get to business process improvement in order to lower costs. It could be automation, or it could be just a better business process that reduces costs.
It also means better business engagement from IT in order to provide the systems and services in real-time that will engage the customer better. It could even be an internal customer, like an employee, a team member. So, in human capital management, for example, enabling 24-7 access to human resource profiles, and services that normally would have taken a 9-to-5 approach with an HR person in between in order just to answer questions, change benefits, whatever it may be. It can also be real-time capability with our customer on the casino floor.
Ultimately, when you think of digital transformation, it is taking all of those steps in technology and modernizing the IT organization so that it can operate as DevOps. And, as it operates in DevOps, driving a continual delivery model for the business so that we increase the velocity of new services and experiences that are brought to market.
Can you tell me more about the evolving customer experience that Caesars is focusing on? Sounds interesting.
Our guests are beginning to look for an entirely new experience on the casino floor that encompasses a different level of engagement: social engagement rather than singular engagement.
Let me give you an example. In the world of casinos, you have a slot machine, a person goes to sit there at the front of the slot machine, they're kind of by themselves. When you think of the world today, it's all networked and interrelated. We have social networks, and people like interacting with people in their own groups, their own friends.
Or maybe they like discovering new friends. We have a new concept that just launched at The LINQ Las Vegas Hotel & Experience, one of our properties on the Strip, called Rematch Bar where people can sit at the bar and all across the bar, the actual tabletop of the bar, is set of video screens and a game will pop up and everybody at the bar can start playing that game by just tapping on the actual bar surface and then the screen behind the bartender displays everyone’s scores. So now they're in a social game altogether.
There are a number of examples like that that are fantastic. And they include the ability to sit in fan caves with a group of people as opposed to when you're in a sports booth, for instance, sitting by yourself in a chair watching a big screen of a baseball game.
When you’re watching in a fan cave there's also a big screen in front of you to allow you to play video games against your buddies in another town or sitting next to you. This is a model we believe is going to be successful across all of our properties considering an entirely new demographic of customer, a demographic which is not defined by age but by behavior. The experience we deliver is changing, has to change, to fit the lifestyles of our customer today.
What TBM provides through Apptio is a view into each one of the steps we take, how efficient is it, how effective are the activities we're providing or the services we're providing, should we switch something out and put something else in new that is different?
So you are bringing an enhanced social experience to the customer as opposed to the customer having to go seek it out. What are some of the technologies you're looking at piloting?
Some of the technologies are focused on the hospitality experience, or a way for the guests to have the most, I would say, connected experience possible. So it's not just elements of the room, but the actual guest experience in the room. Check-in, mobile check-in. I know it sounds straightforward, but there are so many different ways you can do mobile check-in. You can have people use the actual phone to go to the room, you can have them go to a kiosk. What do you do in terms of identification, facial recognition, non-facial recognition, what are all the questions around privacy and non-privacy issues?
So you've talked about AR, for us, we think about what’s next: what would an AR video gaming/real money wagering experience look like? How can we get more of our partners who want to do this test with us in advance so that we can also get approval from regulatory?
I can see scenarios where a wearable helps signal that a customer is coming in the direction of one of our casino hosts or an AR situation that allows for our maintenance team to fix something in a hotel room or for the swimming pool if something is going wrong there, you know, in real-time as opposed to having some latency. I think the quality of service, this is how NPS scores [net promoter score] or anything else, will go up.
How does TBM help you work with the business to decide which technologies to invest in and which one to jettison as you explore the evolving competitive landscape?
TBM allows us to quickly see where we are on the budget across the entire portfolio as opposed to one view of a project. And that is all the portfolio with all the costs, meaning the cost of cloud, people, and infrastructure that might be on-prem and, of course, the actual project costs.
With the ability to forecast on the total cost of ownership for the business we can be proactive to ensure that we've put forward the things that are most appropriate to either save money and better engage the customer. These are supported with ease. As opposed to taking six weeks or six months to find this information, we can find it today.
So it sounds like digital is the future for Caesars Entertainment.
It's everything. Like you said, it's not purely IT, it's not just tech, it's digital, tech, the process, and experience. So digital is much more about the lifestyle around everything when it comes to our consumer, and digital is the operating model for our business. If we're not a digital company, we really are going to struggle in a world dictated by technology and digital experiences.
Okay, since we only have a few minutes left, can you tell me the top three benefits that TBM brings to your operations?
Well, first of all, enabling a single view of the costs related to a project and all of our services. Number two, tracking the performance of all of our services across capabilities. And finally, the ability for IT to articulate business value in a very complete way. In a fast and speed-to-market manner that is articulated as cost savings, customer engagement, or new business services. And that means that we're really supporting digital leadership. And, ultimately, we're enabling digital transformation so you can do business leadership.