Where is the Money? Part 14 of 36: Taming Real-time Data

On Peter Mead: We would like to start with a special tribute to the late Peter Mead, who we will always remember for building the wonderful Casino Enterprise Magazine and for being such a great friend. We will miss the discussions we had with Peter, in which he would express his passion regarding important, burning issues. Many times this resulted in a special article or a deeper take on our work.

Writing for Casino Enterprise Management and Peter has been a wonderful journey. We have authored almost 100 articles on topics ranging from the impact of security to advanced analytical techniques to the potential of online gaming. As we have authored these articles, we have seen the industry grow, change and adapt to the new world. Peter, if we could have had final words for you, we would have thanked you for allowing us to share our ideas and to help shape the thinking of the industry.
Rest in peace, Peter. We miss you.

Authors’ Note: Real-time data is a complex beast. We not only have to stream data from table games and slot machines, but also hotel, point-of-sale and now social media. Taming this beast is both difficult and necessary. An operator needs to monitor, understand and act on this data. What’s more, the real-time nature of mobility brings the harsh reality that it is no longer enough to see data that is current as of yesterday; today we need to put the stream to work as events happen in real time. These data streams transform front-line staff into knowledge workers empowered to make informed decisions. This article will define the complex nature of real-time data, its challenges, and both how we can and why we must bring it into the business.

In our September 2014 CEM article we described the role of business intelligence and how information intelligence has become a central part of the ability of the gaming organization today:

When thinking about the role of business intelligence, the Spielman quadrant diagram (see Figure 1) shows four very different applications: reporting, exploring, forecasting and research. It is extremely important to understand the differences between these applications. Looking at Figure 1, we can see that the horizontal axis divides the kinds of activities in the business intelligence space into quadrants based on known relationships (on the left) and unknown relationships (on the right). The vertical axis divides the kinds of activities based on the existence of data, with known data on the top and unknown data on the bottom. See Table 1 for a breakdown of the data and relationships for each activity.1

Figure 1: Spielman quadrant diagramThis traditional business intelligence was the domain of the analyst and the thinker, and its tools were used to analyze, explore, plan and evaluate the results of decisions after they were made. These tools surfaced in dashboards for executives that were very sophisticated and enabled the executive to see data from across the organization (see Figure 2).

Table 1: Description of Business Intelligence ActivitiesData today, however, must content with the sea change that is mobility. We authors have been talking about the impacts of mobility for some years, and quite simply, the older demographic that we see in the world of gaming is now using smartphones and interacting with social apps on those phones, especially Facebook (see Figure 3). The industry needs to be part of this massive shift in how our customers interact with the world.

It is not just the adoption rate that is important here; it is the way that these mobile devices have become part of our lives. The Pew Research Center did an in-depth study of how Americans interact with their mobile device. The following behaviors give a feeling for just how deeply mobility has become ingrained:
•    “67 percent of cell owners find themselves checking their phone for messages, alerts, or calls—even when they don’t notice their phone ringing or vibrating.”
•    “44 percent of cell owners have slept with their phone next to their bed because they wanted to make sure they didn’t miss any calls, text messages or other updates during the night.”
•    “29 percent of cell owners describe their cell phone as something they ‘can’t imagine living without.’”3

Figure 2: Example of slots dashboardIn short, statements like “my customers are an older demographic and do not have or use smart phones” are no longer valid. They instead represent a head-in-the-sand strategy that risks the business. Handling this sea change requires the industry to adapt, and adapt quickly. Now as for exactly which strategies will be most effective, only time will tell. We can say that in five years the benefit of hindsight will show some unimaginable impacts. For now, though, we argue that the two biggest demands of the world of mobility coming to gaming are a need for innovation and real-time everything. We also argue that the key to success for smart casinos will be found from confronting the real-time everything challenge.

The challenge is certainly immense, considering the connectability of everything today. Forbes describes the Internet of Things (IoT) as such: “Simply put this is the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other). This includes everything from cell phones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. This also applies to components of machines, for example a jet engine of an airplane or the drill of an oil rig. As I mentioned, if it has an on and off switch then chances are it can be a part of the IoT. The analyst firm Gartner says that by 2020 there will be more than 26 billion connected devices. That’s a lot of connections (some even estimate this number to be much higher, more than 100 billion). The IoT is a giant network of connected “things” (which also includes people). The relationship will be between people-people, people-things, and things-things.”4

Figure 3: Number of U.S. Smartphone users2Casinos today largely focus on the “people-things” relationship: customers playing slot machines, table games and interacting with other amenities. The “people-people” relationship has only recently come under analytical scrutiny, with the growth of player development and host tools. However, the concept of “things-things” relationships is almost never considered in the world of gaming. The Internet of Things is sure to have a major impact and drive a major shift in the industry over the coming years. We will revisit this concept again below when we discuss real-time data and the “Internet of Systems.”

The Smart Casino
In Part 13 of our “Where is the Money?” series we presented the smart casino. We stated that this smart casino has a personality in how it responds to its customers. Now this personality is a choice, and it does not have to be the highest service or the best teams. In what follows, we explore the pieces that are required to make up a smart casino more deeply.

To understand what is required to manage the mobile component of the smart casino, we recognize that mobility is, at its heart, a place of constant innovation.

However, according to Peter Drucker, “… innovation, in Schumpeter’s famous phrase, is also ‘creative destruction.’ It makes obsolete yesterday’s capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need. Thus, what the classical economist—or the accountant or the stock exchange—considers ‘profit’ is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today’s profitable business will become tomorrow’s white elephant.”5

We authors have seen organizations driving change, with the new job function—chief innovation officer—appearing around the industry. In our December 2014 CEM article we described two kinds of innovation, industry innovation and company innovation. In this article, we explained how desirable it is for the industry to innovate and grow. Now innovation is hard6—it requires study and dedicated resources to identifying opportunity and bringing about change.

In the case of mobility, the industry is surrounded by change, and as Drucker argues, innovation makes yesterday’s capital obsolete and demands constant investment to reinvent the business. One cannot simply check “mobility” off of their smart casino to-do list. One must recognize the need to constantly invest in innovative mobility products.

When making this investment, considering real time is a requirement. Customers are moving around in real time,7  and they are interacting in real time. Gaming systems are real time, and customer service is responding in real time. Quite simply, it is absurd to provide tools for these operations that are not running in real time. This absolute necessity for real time brings huge challenges to the industry, as it fundamentally changes how our customers interact with the business and how we are able to interact with our customers. There are critical challenges to making real time effective. Let’s examine four of these challenges.

Challenges of Real Time
1. Multiple Data Streams
Our customers are connected. They monitor Facebook, and they may monitor other social media sites like Twitter. They read reviews on the amenities before they visit them. As operators, meanwhile, we are buried in systems, and it seems like each new area of the business brings new systems. There are valuable systems for valet, food & beverage, entertainment, lighting, air conditioning, power and parking. In fact, it is difficult to find an area of the business where we cannot hook up some new technology to make the area more effective. To make the smart casino, we need to equip our operational teams with a complete view of all the real-time data streams, both on the social media side and behind the scenes. Traditional approaches of having the data warehouse show yesterday’s data is just not good enough anymore. The data in the analytical tools needs to be up to the minute (or second).

2. “Internet of Systems”
The Internet of Things brings about an explosion in the number of systems, as it is the systems that tie these devices together, resulting in the Internet of Systems (IoS). A sensor on the parking garage, for example, could interface to a mobile app to guide customers to an open parking space. This app would save time and the customer would be happy for the convenience—and in fact would have more time for the entertainment experience. As we start thinking about the growth of the IoS, we are challenged with dealing with new vendors, new systems, and quite frankly, an environment that is changing so fast that just keeping up with the change is a full-time job. To make the smart casino, we need to combine the traditional data in the operational systems with the IoS data streams.

3. Tools
Imagine a frontline team that has tools providing complete knowledge about all the activities, from traditional systems to the IoS. To achieve this, the tools will need access to all the data, and to see this data in real time, we will need very special tools. Furthermore, these tools will need to be extremely flexible to accommodate the ever-growing real-time data streams.

4. Empowerment
Having all these data streams coming together in real time creates a genuine challenge for operators, as our frontline teams might be transforming into knowledge workers. Knowledge workers make informed decisions on how to handle situations. This empowerment of frontline teams, along with tools that enable the decisions to be measured, can change how we manage the industry.

Wacky Business Personality Approaches?
In Part 13 of our “Where is the Money?” series we described personification of the smart casino as such”: “It is useful to think about the smart casino with all of its team members, marketing and systems, and how it interacts with the player, as being very personal. In thinking like this, we can personify the entire customer experience. Consider the following examples of personification of the smart casino experience that allow us to tune the personality of the customer experience to meet the needs of the customer”8

To show how different personalities can be effective, let’s look at the extremely successful Ryanair.9 Ryanair has grown to become the largest airline by scheduled passengers carried,10  yet its customer service is astonishingly bad. This terrible customer service has created controversy around the world: “Michael O’Leary, the CEO of the fee-happy European airline Ryanair, isn’t scared of a little controversy. In fact, he seems to actively welcome it, periodically making outrageous statements (‘The best thing you can do with environmentalists is shoot them’) and announcing possible new money-makers for the airline such as in-flight porn and pay toilets. Well, O’Leary is in the news again, this time for referring to Ryanair passengers—the people who have made him a rich man—as ‘idiots.’” 11, 12 

How in a world of social media can the CEO of a company call his customers “idiots” and still make money? The answer seems to be that Ryanair is cheaper and that customers do not expect service. The message here is that the personality that our smart entertainment business presents should be aligned with the business model—and that counter-intuitive models might work, depending on that business model. Now we authors would never recommend a Ryanair approach to customer service in the gaming industry, but we are guessing that all the other (now smaller by passengers carried) airlines probably wonder every day why customers choose Ryanair…and continue to do so.

Build Your Smart Casino Now
The time for thinking and considering has passed, the numbers are telling the story. Our customers are in the world of mobility, they expect you to interact with them in a smart way, and they expect your casinos to be knowledgeable about the goings on within their business in real time. What’s more, the world of mobility is transforming into the world of IoT, and for the gaming business, this will have even more impact. Sometimes it requires a decision to do nothing; however, in this case of the smart casino, if you decide to do nothing, be prepared to become the white elephant of tomorrow.

Footnotes
1    http://cemvideoedge.org/articles/september-2014/where-money-part-3-36-bi…
2    http://www.statista.com/statistics/201182/forecast-of-smartphone-users-i…
3    http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/ and http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/ for more in-depth
4    http://www.forbes.com/sites/jacobmorgan/2014/05/13/simple-explanation-in…
5    Drucker, Peter F. (2009-10-13). The Daily Drucker (p. 23). HarperCollins. Kindle Edition.
6    https://hbr.org/2002/08/the-discipline-of-innovation
7    http://www.casinoenterprisemanagement.com/newswire/andrew-cardno-shares-…
8    http://www.casinoenterprisemanagement.com/articles/july-2015/where-money…
9    ISEQ: RYA, LSE: RYA, NASDAQ: RYAAY
10    http://www.huffingtonpost.com/2013/06/18/busiest-airlines-world_n_346045…
11    http://business.time.com/2012/09/11/thats-some-quirky-marketing-strategy…
12    The authors do not recommend calling customers by anything but complementary terms.

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