Article: Harrah’s Use of Business Intelligence Software to Improve Customer Loyalty and Operations

Harrah’s Entertainment, Inc. is the world’s largest gaming company having more than 80,000 employees. It operates several branded casino entertainment under the Harrah’s, Caesars, and Horseshoe brand names domestically and internationally. The company has grown through development of new properties, expansions, and acquisitions since it started in Reno, Nevada about 70 years ago. Harrah’s is committed to building loyalty and value with its customers through great service, operational excellence, and technical leadership. The need to attract and retain customers is critical to the success because customer loyalty can make or break a business. Harrah’s has succeeded in gathering data about its 40 million customers through its Total Rewards program that keeps track of guest gaming activities from restaurants to gaming tables and slot machines at any of its brand name casinos. It rewards guests and customer incentives through offering free room nights, free shows, free dining, and free gifts. Harrah’s already collects high volumes of transactions made by its customers. Harrah’s biggest challenge is to understand, analyze, and leverage raw data to maximize the lifetime value of their customers ultimately maximizing the return on investment, thus to better plan its strategic growth.

Harrah’s needed a system that could be managed from a central location and accessible from any of its properties and newly acquired companies. The solution needed to be user friendly for its corporate and property-level managers, and provide insights and analysis that could be applied to performance metrics at any of its properties.

As a result, the company chose to invest into Teradata and IBM Cognos Business Intelligence software to establish a closed-loop marketing system and to better achieve its marketing and customer loyalty and improve its business operations. Teradata is a single enterprise data warehouse and IBM Cognos business intelligence software allows users to drill further and deeper into customer data.
The company can now better profile and segment customers and use the data to develop targeted market strategies to drive customer behavior. For example, Harrah’s might reach out to customers who have not visited their property in more than six months and offer them incentives to bring them back to their favorite property. Through the use of IBM Cognos business intelligence solutions, managers can acquire detailed reporting and analysis capabilities that can be used to measure the effectiveness of new marketing campaigns against control groups. Specifically, the closed-loop system helps the organization with all aspects of the campaign such as indentifying and segmenting customers, implementing marketing strategies, tracking execution, documenting incentives, and measuring effectiveness.

Harrah’s has successfully deployed the IBM Cognos software from its corporate data center and provide access to the data from any property site. The intuitive interface made it easier for managers to interact with the software regardless of software experience. Thus, the company has developed standard marketing campaigns that drive activities for specific customer segments. Individual property managers can access these programs to determine which of the campaigns or combinations of campaigns can achieve their business operation goals for their specific location.

The implementation of this business intelligence software has resulted in a more focused communication and with customers, thus achieving better customer relationships. As a result of Harrah’s deployment of the system, customer spending has increased from 30 percent to nearly 50 percent. The outcome is that Harrah’s has cut down on employment costs by avoiding hiring new analyst on their properties. The centralized deployment strategy has made it easier for the company to identify new locations and support future growth and acquisitions. Harrah’s now has the ability to analyze historical data to predicting future performance of its marketing campaigns, which is a critical factor in sustaining a competitive market advantage.

Reference: IBM Case Study, Harrah's Entertainment, Inc., 27 February 2009.
Website: http://www-01.ibm.com/software/success/cssdb.nsf/cs/LWIS-7PNLEC?OpenDocument&Site=cognos&cty=en_us

Chapter 11 Case Study: Can Knowledge Systems Help Boeing Trounce Airbus?

Question #2: What is the relationship of knowledge management to Boeing's business strategy? How is Boeing using knowledge management systems to execute its business model and business strategy?

Knowledge management, which is the set of business processes developed to create, store, transfer, and apply knowledge closely resembles Boeing's business strategy. Boeing's strategy is to fly travelers from their own city nonstop to their destination using smaller airplanes that will fly quickly and inexpensively, enabling passengers to fly nonstop from departure to destination, thus bypassing the larger hubs. Boeing sees a strong expansion of smaller jet sales rather than larger jumbo jets sales that Airbus is developing.
Boeing implemented a "paperless design" model to replace its manual design to computerize the design and production of its 777 aircraft. The Boeing 777 carries 300 to 400 passengers at lower operating and maintenance costs, lower fuel costs, and lighter materials. Boeing implemented the Dessault Systems CATIA computer-aided design software to enable engineers to access any of the airplanes parts modify them, fit them into the surrounding structure. This allows other engineers to make adjustments without making extensive modifications. The airplane was designed entirely on a computer screen and assembled without expensive mock-up models. The implementation of computer aided design (CAD) software is an example of a knowledge work system.


Question #3: Evaluate Boeing's new business strategy. What management, organization, and technology issues will Boeing face as it attempts to implement the strategy? What role will knowledge management play in this strategy. How successful will Boeing be in pursuing this strategy?

Boeing's new business strategy was to lower costs by using technology to reform inefficient business process. Boeing's plan was to roll out the 787 aircraft using a new production process of outsourcing the design and construction of about 80 percent of the aircraft to hundreds of other companies outside the United States. Boeing and its key suppliers are using software that allows designers to collaborate in designing components and manufacturing processes. Instead of airplanes being produced under one facility, the 787 is being built in a modular assembly process.
Although Boeing implemented the Dessault Systems to help manage its global supply chain, the system required additional features to its planning and design software. Boeing expanded its use of Dessault's version 5 Product Life Cycle Management software from 1,000 to 6,000 licenses. These software tools enable designers to use a single set of data and to simulate the digitally the plane's life cycle from design through production and modeling changes in design, thus, to reduce errors and eliminate redundancy of work. Outsourcing the 787 required Dessault to improve integration of its CAIA, Enovia, and Delmia modules for Boeing. Boeing need custom tools to handle designs with carbon-fiber composite materials. Thus, the role of knowledge management is to quickly resolve issues from significant technical and production problems that could threaten the delivery of the 787. Software programs designed by a variety of vendors had trouble "talking" to one another.
I am uncertain if Boeing will be be able to successfully implement their new business strategy of outsourcing their new airplane design and production because of the required software updates and the lack of communication among the vendor's software solutions.

Question #4: Using the facts presented in this case, what role has knowledge management played in Airbus's business strategy and business performance.

For Airbus, the role of knowledge management was to launch its A380 jumbo jet to meet the predicted demand of increased mass of passengers without increasing operational costs. It envisions a hub-and-spoke model of air travel where jumbo jets transport passengers to a small number of hub cities where passengers can transfer to smaller connecting flights to their destinations. However, the application of knowledge management was not fully implemented to better streamline the design and production of the A380. Airbus announced later delivery schedules due to the complexity required to wire the aircraft for in-flight entertainment and communication units requested by airlines. There appears to be issues with supply chain management of Airbus, because any design changes to wiring results in further delays. Airbus ran into other issues with design changes to the A350 to widen its cabin and windows and provide appropriate cabin humidity. The A350 is not expected to enter service until the year 2012, four years after the 787 is rolled out. Thus, Airbus did not adequately address knowledge management as adequately as Boeing. The outcome is that the business performance is not going to meet its customers expectations unless significant knowledge management is implemented to streamline the production process.

Article: MLB's Real Competitive Advantage by Jay Yarow, Business Week (2 September 2008).

The article describes how Major League Baseball Advanced Media (MLBAM), an interactive media and internet company, has helped Major League Baseball (MLB) to become a profitable business both through e-commerce and m-commerce. MLB makes about $450 million per year. About half of the income comes from fans that pay $120 per season to watch games live over the Internet. The rest of the income comes from advertising of free content related to major league baseball teams. The business has grown significantly for MLB which is roughly $6 billion in total revenues. The market strategy for MLB is the implementation of online content business. MLB.com offers fans complete baseball information on the web such as up-to-date statistics, game summaries, historical background of the ball players, MLB events and programs, ticket sales, baseball memorabilia and collectibles, fantasy games, video webcasts of every game, and real-time pitch-by-pitch enactments of every game. The MLB Website offers more live events on the Internet than any other game in the world. Bob Bowman who is chief executive at MLBAM said, “Somehow the strategy of putting baseball games on every device that has a plug or a battery has worked for the business partners. Even more important, it has worked for our fans.”

MLBAM is now focused on the mobile phones as the next big opportunity for revenue. It has already built customized applications for a number of phones such as the BlackBerry from Research In Motion (RIMM). As of September 2008, MLBAM has implemented software that allowed individuals of the iPhone to acquire statistics from the Gameday Web site. This technology is likely to be followed by other similar applications for other phones such as Nokia, Motorola, and Sony-Ericsson. MLBAM hired a separate team to design mobile Web sites and applications. The MLB mobile site now receives about more than 10 million page views per day and it has more than 25 mobile applications. Right now the revenue generated from mobile phones is roughly $10 to $12 million so it is not a significant business for MLB. However, the revenue from mobile technology is expected to increase as Bowman mentioned, “I’m not sure it is for anyone, but those days will come.”

MLBAM understands that it could increase revenue from advertising if it develops a strategy for placing ads on its mobile Websites. However, it is still trying to determine the best course of action. They determined that advertising for wireless mobile phones is not robust because of the small screen, but as the technology becomes further developed, and the video becomes easier to use on all devices, then the technology will certainly become more profitable. Bowman’s strategy is that “If you serve the fans, you care of your business.” As a result, MLBAM will most likely become the lead in sports entertainment through m-commerce.

I like the article because I am a fan of Major League Baseball. I have made several trips to Dodgers Stadium. The technology described will certainly help me to better understand the significance of MLBAM through the internet to better provide mobile service to series fans.

Reference: Jay Yarow, "MLB's Real Competitive Advantage," Business Week Online, September 2, 2008, p26. Website: http://www.businessweek.com/technology/content/aug2008/tc20080828 _061722.htm.

Case Study: Limited Brands Consolidates Its Supply Chain Management

Question #1: Describe the supply chain management problems encountered by Limited Brands in this case. What wast their business impact?

One of the significant problems to the supply chain management occurred when a traffic jam of 400 merchandise trailers moved into a parking lot distribution center that was only designated to hold 150 trailers. This logistics problem caused a major bottleneck along a main highway. The problem also amplified when it created a public relations issue during the beginning of a sales period. The problem occurred because of poor planning systems, corporate executives made assumptions, and different segments of the enterprise were not communicating with each other. There was no accountability or tracking of the original inventory. The impact on business is the loss of sales revenue to the company. Another problem identified was that sixty major systems were already in place with hundreds of applications running a variety of platforms such as computers and servers from IBM, Hewlett-Packard, Sun Mircrosystems and Tandem. As a result it was difficult to make supply chain information flow between applications to coordinate with the supply chain of Limited Brands. The business impact was the lack of an enterprise-wide view of the supply chain.

Question #2: What management, organization, and technology factors were responsible for these problems?

Management factors include a lack of visibility of inventory, lack of adequate tracking of inventory, lack of adequate communications, and a lack of an enterprise view of the supply chain. Organizational factors were a lack of infrastructure flexibility such as scheduling issues and processing delays resulting from overly simple point-to-point interfaces that linked one system to another. For example, a shipping facility needs to be linked to a distribution center. The software interfaces were hard-wired point-by-point to different application programming interfaces (APIs). Information data was transmitted between one system and another on a batch schedule, thus lacking infrastructure flexibility. Technological factors included were a lack of real-time reporting and communications with delivery agents. Another technological factor was a broken segment of its brand’s technology operations under a central tracking system.

Question #3: How did Limited Brands solve these problems? What management, organization, and technology issues were addressed by the solution?

Rick Jackson, Executive Vice President of Limited Logistics Services (LLS), which supplies global logistics management and leadership for the supply chains used by Limited Brand’s, launched several cross-functional projects to enhance their credibility. They built regional docking centers on the East Coast and the West Coast to distribute products directly to stores, thus reducing costs and time by as much as 10 days. Tibco, the leading vendor of enterprise application integration software was contracted to develop a global application platform for Limited Brands. The outcome is that the newly developed technology helped to improve the company’s ability to track and manage the flow of information through its worldwide supply chain. Another solution was that Tibco worked in coordination with Limited Brands to install real-time reporting and communications with delivery agents. They integrated the supply chain accountability and reporting (OSCAR) application with the logistics applications. This allowed new delivery agents to enter the supply chain, thus allowing for better flexibility of the network. This technology allowed for enhanced shipment tracking and order visibility of Limited Brand’s partners using a booking information module.

The management, organizational, and technology issues were resolved through these solutions. The impact to the supply chain was that it was better aligned with the goals of the board members and with the share holders. The outcome was that the supply chain became more focused on the needs of the customers, thus improving overall profitability.