1 Organization Introduction

Industry

Skycity Entertainment Group Limited, also known as Skycity or Skycity Group, is counted as New Zealand’s largest entertainment company listed on New Zealand’s Stock Exchange as SKC. The company operates six fully licensed casino across five locations in both New Zealand and Australia – Auckland, Hamilton, Queenstown, Adelaide and Darwin.  Skycity is a popular tourist attraction offering leisure and entertainment services to its visitors.  Skycity Auckland, which holds the casino licence till 30 June 2048 is currently operating 150 gaming tables, 1,877 gaming machines and 240 fully automated table games. This information is from the company’s corporate website and 2018 Annual report. The casino operates 24 hours a day, 7 days a week, expect on Christmas day, Anzac Day and Good Friday making it a very busy and most happening place in town. Self-service TAB facility is also available for customers on Level 2 of Skycity. The company also owns a chain of award-winning restaurants and bars in its precinct appealing to both domestic and international customers.  Additionally, the company also offers award-winning hotel accommodation and conference facilities. Skycity employees more than 6,500 people across the Group contributing millions in taxes and rates. Skycity website is https://www.skycityauckland.co.nz/ and its corporate website is https://www.skycityentertainmentgroup.com/

Product and Services

Skycity provides other services besides casino entertainment like Hotel accommodation. There are two hotels with 787 rooms combined in both properties.  Skycity convention is another grosser in terms of revenue fetching $27 millions in the year 2018. It also provides out-catering service called The Kitchen c/o Skycity and runs catering service in the Koru Lounge of Auckland Airport. Skycity involves its gaming customers in loyalty programmes called the Premier Rewards. Skycity has a 700 seat Theatre available for hire for hosting plays, local and international events. Sky tower is one of the major tourist attractions providing 360 view of the Auckland city. As per the 2018 annual report of Skycity, Skytower contributed $18 million in revenue in year 2018.  AJ Hackett host adventures like sky jump, sky walk from Skytower. There is East Day Spa facility available for Skycity customers, which provides several packages of spa and dining options for customers.  Skycity also offers Gift cards along with parking facility for its customers which brought $7 million revenue in financial year 2018. It also houses award winning restaurants which was the second largest revenue generator accounting $113 million in profits after gaming. The company hires more than 6000 employees across the Group. It actively supports sponsorship programmes for sport teams like Skycity NZ Breakers and Vodafone Warriors. It also supports children charity called Variety and supports Leukaemia and Blood Cancer New Zealand. Given the vast business, Skycity relies heavily on Information Technology for its smooth operations in gaming, finance, HR, procurement, purchasing and logistic, Marketing (food and Beverage, Hotels, Promotions), sales, property maintenance.

Skycity Mission

Skycity Vision is to deliver world-class casino entertainment.  The Mission of the company is to thrill, excite and make everyone feel like a winner.  Values of the company is Play Fair, Play Hard, Play a Part, Play Time and Play Safe.  The company has created its own SHINE programme for its employees to drive the message about the company’s vision, mission and the values followed by the company to make the business flourish. It is a compulsory classroom-based induction programme for all new employees followed by an online assessment on the company’s learning management system.

Corporate Structure

Skycity management comprises of Board of Directors and the Senior Management. The Board of Directors has seven representatives, some are independent directors and some of the representatives are elected by of the shareholders.

The Skycity Management Organization chart is show in the figure below.

Fig 1 Skycity Senior Management

Fig 2 Skycity Upper Management

Business Strategy

The primary objective across the Skycity group is to have a strong annual rate of growth of earnings from the investments to maximise total shareholder return.

A brief description of the principles adopted by the company to realize their goal of achieving greater profits is outlined below.

The company is utilizing its existing casino licences to its full potential to generate maximum revenue.  Skycity is providing its customers with world-class entertainment by identifying customer needs and providing them with amazing customer service. The company takes keen interest to safeguard partnership with key stakeholders. The company is a supportive member of the local communities and is a responsible corporate citizen.

Major Business Processes

FUNCTIONAL AREA   BUSINESS PROCESS

Table 1 Business Process Details

Relationship with external entities

Regulatory Environment of the company’s casino operations in New Zealand is governed by Department of Internal Affairs and Gambling Commission in accordance with the Gambling Act 2003. In Australia, casino activities are regulated by the relevant State and Territory governments. The other organisations with which Skycity works along is Auckland Council, Food suppliers, Property maintenance team like Argus, Kone. The latest release from Auckland Council is smoking ban in outside dining areas, which is followed by Skycity restaurants diligently, with signage boards and information hung outside of the restaurants. Skycity partners with Health and Safety like ACC and Southern Cross Insurance. There is a dedicated Skycity communication team to handle communication with external agency like media, filming requests and social media content of the company. SKYCITY is a member of the Sustainable Business Council (SBC) where the company learns and shares best practice in Corporate Social Responsibility (CSR) with other like-minded businesses across New Zealand. Skycity uses TIMG Services for its records management processes. TIMG provides secure and reliable document service for Skycity. SKYCITY is part of Climate Leaders Coalition group that is committed to tackling climate change by measuring its greenhouse gas emissions. Vector is the power supplier for Skycity and Becca completed generator replacement project before the construction of NZICC. Ecoware provides compostable packaging supplies to Skycity food outlets so that these can go along with food waste to be turned into fertiliser product. Skycity segregates is food waste to minimize the amount of rubbish going in landfills.

2 IT infrastructure emerging technologies and management issues

2.1 Skycity’s Information Technology Infrastructure

Table 2 Skycity Infrastructure Details

2.2 Issues and challenges in the management of IT Infrastructure

There are multiple challenges that the management must address in the process of creation and management of IT infrastructure which are noted below

Infrastructure Investments

Skycity has invested significantly in developing its IT infrastructure. There is no figure based evidence to support this statement, however, the 2018 Company’s annual report mention that the company’s ICT costs were higher and contributed to higher corporate costs for that year.  The investments in the IT went into replacing end-of-life systems and migrating data to cloud with Dynamics 365 as its ERP system in year 2018. It is also seen that the company relies heavily on lot of applications that are required by different sections of the businesses to carry out it functions. Skycity is investing just the right amount on its IT infrastructure to continue to be a business leader.  It had recently bought hardware that includes scanners, chargers, belt carriers, scanning gun, barcode printers, barcode printer labels, scanner safer for its purchase and logistic department.

Choosing And Coordinating Infrastructure Components

The IT infrastructure environment of Skycity is composed of vendors, people, and

technology services that are brought together to function as one whole unit. However, if there is a change in any of these elements for any reasons, the management is assigned with the task to sort and make them all still get to work together. One example is the change in law to recall historical data, but the available hardware platforms not scalable to store the additional data.

Infrastructure Change

As new technology emerges it outgrows the existing infrastructure. Skycity had to replace old laptops and PC’s with modern up-to-date hardware. The old hardware was not compatible with new application and services and could no longer be used.

Management And Governance

IT infrastructure of Skycity is managed and controlled by IT.  The needs of each business unit is sent to IT. IT answers questions like the cost of rolling out new technology, the available options, if it can be vendor supplied or has to be owned by company.  Alternative options, if the existing tools and applications can be modified to meet the needs of the business unit. Also, the training and support for staff in event of change in the infrastructure is considered by IT.

Competitive Force model

Skycity can follow Competitive Force model to know the right amount of investments in its IT infrastructure. By answering the questions proposed in the model, Skycity will know the IT funding requirement.

Fig 3 Competitive force model

Total Cost of Ownership analysis to know the total cost of existing IT infrastructure in Skycity

Table 3 Total Cost of Ownership (TCO)

2.3 Emerging Technologies in Casino

Skycity has envisioned to incorporate emerging technologies in its gaming arena to stay true to their mission which is to thrill and to excite their customers.  The objective of Skycity to invest in this programme is to grow its revenue and shareholder value and have its business relevant to modern times.  Skycity has created a team called CoLab which is primarily responsible for bringing ideas to reality by facilitating and pushing ideas and concepts on the future of entertainment. The strategy adopted by this innovative team is collaboration with SKYCITY employees, interns, technical experts and its customers. For the purpose of collaboration Skycity has created Winning Ideas platform where employees post ideas, users comment on them, like or dislike them, give their insights to improvise them.  There are about 800 staff ideas in pipeline that are actively being monitored by the team. The CoLab panel has engaged more than 2000 customers in this customer-centric project.   One such outcome of collaboration is the frictionless customer service for Hotel guests delivered through a mobile offering where the customer is recognised and rewarded during their stay.  Through innovation, the company is able to retain customers and increase their frequency of visits to the site.  Another offering from the CoLab team is FindMyCar application which is designed to help customers find the exact location of their carpark in Skycity huge parking complex.

Skycity is ready take advantages of technology like mobile application support for seamless customer service because the members of the board and the management support these ideas.  The staff ideation programme is designed to drive a cultural shift to make staff more innovative, agile and embrace process change. Innovation is a shared responsibility between cross functional team and this is now integrated and embedded across the organization like the gaming operations, Information and Communication Technology, Risk, Finance and Marketing teams.

Talking of emerging technologies in gaming industries, the three major technologies that are currently being developed and are capable of changing the business and social environment in the next five to ten years of time is Virtual Reality, Live Casinos and Gamification.

Virtual Reality

This technology uses software to create an artificial environment through sight and sound in such a way that the user accepts it as real environment.  The use of virtual reality headsets in casino gaming will create a 3D environment for the game thereby making the game more attractive and popular with customers.

Live Casinos

This is new form of gambling where games are run by croupier on a casino gaming table and the players take part in the game using a console on their computers.  Here the player is accessing the live streaming of the gaming from the comfort of his home and for any assistance during the entire game process live chat operator is made available. Live casinos uses Optical Camera Recognition Technology to capture every small detail in the gaming room that is streamed through video link to the players.  These details can be action like spinning of wheel, shuffling of cards, distribution of hands.

Augmented Reality can be described as Technology that superimposes a computer-generated image on to a user’s view of the real world. The most popular example of AR was Pokémon go. In gaming industry AR can enhance the thrill of playing poker game online if all the players wear AR glasses and which means they could see opponents even as one plays on from their kitchen table or their sofa.

E-Sports

It can be described as sport where the primary aspects of the sport are carried out by playing it of on video games. This globally trending game will be broadcasted from Skycity’s e-sports studio located on Level 2 of Sky Tower. Skycity has partnered with Let’s Play Live Media (LPLM) by buying 40 per cent stake. Globally e-sports is popular with the likes of young, old, male, female and people from different walks of life. LPLM will film the live e-sport events which will be held in NZ International Convention Centre theatre and livestream to giant LED screen in Skycity plaza area.

Proposed Emerging Technology for Skycity

Skycity revenue shows it is in good position now to bring in emerging technology like Live Casino as an offering to its customers. The company has announced after tax profit of $169.5 million for 12 months till June 2018. Live games require considerable amount of investment in staff, technology which Skycity can invest in readily.  There are many overseas-based online casinos offering online gaming to Kiwis where as Skycity land-based casino is losing out on the online gaming market because of the regulatory environment of the country.  Transitioning from bricks and mortar business into online business environment is a logical step for the company at this stage.  Since, this will be the first foray of the company in Live Casino online, it can partnership with an established overseas-based online casino operator to become globally competent and attract business. However, the major hurdle is the law across Tasman that prohibits online casino operations by an onshore company because of which Skycity is not able to conduct it live casino gaming online both in New Zealand and Australia.  There is possibility in the future that the online gaming will be regulated within New Zealand and we this happens Skycity should be ready to participate in that opportunity. Skycity would not like to disrespect the good relationship that it has built with the New Zealand regulatory bodies by lobbying around to amend the Gaming Act.  Skycity instead can partner with offshore company to venture in online business overseas and grow its revenue.

Another Emerging Technology of relevance to Skycity is use of Virtual Reality for customers when they visit the All Blacks. The All Blacks studio will be located in the current SKYCITY Auckland Convention Centre. This state-of-the-art All Blacks heritage will be open to customers from 2020. Using this innovative technology customers can immerse themselves in a full interactive VR session where NZ’s rugby heritage, achievements and culture will be told. Stories on rugby legends, the highs and lows of a match, the legacy of the All Blacks will be unfolded using this VR technology. Customers will certainly have a lasting impression of the visit.

Part 3: All About Big Data and recommended strategy

3.1 Big data concepts and technologies

Explaining Big Data

Big Data can be described as huge volumes of data sets collected from web traffic, e-mail, machines like sensors, loyalty cards, social media content, online transactions, call centre conversations, employee details. The data collect is in different formats and can be classed as structured, unstructured, semi-structured. Some of the key characteristics of Big data is its high volume, high velocity and great variety. Data management tools are used to capture, store, and analyse Big Data. It is used by Management Information Systems to enhance data driven decision making as it provides an insight to the data by discovering hidden patterns.

Potential of Big Data

Companies that have incorporated Big Data in its operations have better understanding of their customers. Using customer behavioural patterns companies’ devices précised marketing initiatives to reach and engage their customers there by driving their sales, creating brand name and an intimacy with their customers.

Big Data Scope in Businesses

Businesses are using big data to find spending habits of customers. Take a case of customer stay at Skycity Hotel, big data and analytics can examine on which gaming machine or table games the customer has spent money and the restaurant he likes to visit, the food he likes to order and the services he prefers at spa. Studying these patterns will empower Skycity to create impressive market offerings to the customer thereby generating revenue from multiple sources.  Passionate gamblers and not-so-passionate gamblers can be targeted with promotions where in the gamblers don’t lose so much money when they leave. This is better than losing a lot of money which proves the visit to casino less unfortunate and the customer keeps coming back to play more and becomes a patron.

Drawbacks of Big Data

Data privacy, security and ethical use of data are some of the major problems and drawbacks when using big data. Also, to handle big data organization should incorporate tools and technologies that are capable of handling unstructured and semi-structed data along with structured data.  Data theft is a security issue concerning big data use where personal information of customers is at risk. Big data aids in decision making and there should be clear understanding of the impacts of big data analysis on people and how it is going to affect everyone involved. This helps to answer ethical questions relating to use of big data.

Future of Big Data and advantages of using Big Data

Big Data and its technologies are widely being adopted by companies across the globe to enhance their decision making, and sustain the process of decision making based on data. The cultural shift towards use of data is pushing the demand for big data and analytics further up.

Some of the big data trends to be discussed are on data storage like In-Memory Technology, Machine Learning, Predictive Analytics, IoT.  In-Memory Technology allows data to be stored in RAM instead on hard drives or SSDs. The processing of data with in-memory technology is ultra-fast. SAP, IBM are notable vendors offering In-Memory database technology.  Machine Technology is a branch of artificial intelligence where computers are programmed to analyse the existing big data. The outcome of the analysis is to create systems that understand, exhibits learning capability, gives prediction, and potentially can function itself. Predictive Analytics is advanced analytics having capability to estimate future conditions, giving business insights to what is likely to happen. Unlike the traditional Business Intelligence that uses Descriptive and Prescriptive analysis in abundance, Predictive analysis recognizes patterns in data to draw conclusions about anticipated future behaviour. IoT is another major trend of Big data that is growing steadfast. Physical devices like a simple wrist band can now have electronic devices embedded in them which gets connected to internet thus enabling them to send and receive data. Skycity can harness this potential of big data in their business. Checking the moment of patrons and their activities on the casino floor can be done using artificial intelligence which will give a real-time view of what is happening on the casino floor. Demographic information of the users can be collected from the time they card in and out, duration of their stay. Each of the machine’s profit performance can be tracked. Companies can use cloud storage for the data that they are generating. Predictive analysis can be used to determine the best rates for hotel rooms considering the present and historic data. Analytics will help to segment customers as high paying like corporate clients, leisure or luxury seeking clients. It also helps in inventory allocations and keeping the hotel room prices competitive depending on tourism demand, big conference and events in city. Analytical marketing will streamline marketing efforts by engaging customers to spend money in areas like dining, and make business competitive and increase customer loyalty.

3.2 Recommended Strategy to leverage Big data for Skycity business

The big data strategy recommended for Skycity can go with the name – THE GAME PLAN

After discussing the big data concepts and technologies in the above section, the potential benefits that Skycity can count by adopting big data in its operations is evident.  Cloud technology can bring a change in the way Skycity conducts its Supply Chain and Finance operations. Investing in Cloud-based Dynamics 365 will provide the platform for two cross functional team to work in perfect coordination eliminating errors and time lags making the workforce more productive. The advantages are it will help tracking the inventory in real time. RFID technology for pick, pack and transfer of goods will allow to quickly see where the items are stored and its transfer process. Invoices from suppliers will be auto entered in Dynamics and the Accounts payable team will manage the invoicing and exceptions.  Skycity can gain insights from this operational process to develop its planning and ordering processes and set timeframes, and standards like KPI’s. The application can be accessed with help of internet by operational staff and Managers on their work phone devices thus making it portable.

Gaming is the highest priority of Skycity as 80% of revenue is generated from casino. In year 2018, $868 millions in revenue has come from gaming.  There were 2.8 million visits from Loyalty card members. Big data and analytics of these customers helps to identify patterns which could suggest where gaming addiction will likely to occur. This will help Skycity to continue its Host Responsibility duties in more efficient way. Additionally, data mining techniques like regression models, correlations, neural networks, decision trees models provide information about the hidden patterns and relationships in the data that are too complex for humans to identify by themselves.

Examples of these analytics include finding a patron’s worth, identifying the most valuable patrons, and patrons that visit casino together and   predict the future worth of the patron. Marketing team can offer customized offering to players with free night stay at hotel, food and beverage vouchers, free gaming credits, free gifts depending on level of play.  These campaigns are drive visitation and there is most likelihood of positive responses from the patrons, because these are customized marketing campaigns.  The third revenue generator was from hotel sales, which brought in $58 millions with 240,000 times the hotel rooms were occupied.  Skycity can mine this big data to obtain a complete view of each of this customer in order to drive dynamic room rate pricing for such guests to increase loyalty, conduct bookings forecasts among other revenue-management strategies like competitive pricing and room availability. Skycity’s customer offerings can be improved bringing more digital experiences for hotel stay using facial recognition for hotel room access, interactive and digital screens placed in or near Lobbies, elevator, in guest rooms, conference halls. These signages can welcome and entertain guest, give information of what’s on the property, expedite check-ins process, self-servicing checkout kiosk is also of great help to guests, offer history of all transactions and interactions on web page. To happen all of this a strong network infrastructure is needed. Skycity has its own robust website offering hotel reservation tool, the hotel staff should be equipped with mobile devices to deliver the required performance. A high-bandwidth network is required to allow large amount of data to be sent and received. Skycity has sold its Federal Street Car Park building for $40 millions to release cash to fund future projects. Skycity has adopted “asset-lighter” approach to create revenue from its non-core assets to fund its future initiative.  Big data technology like Hadoop, visual analytics and R can help Skycity to gain business insights.  People from interdisciplinary backgrounds like quantitative, computational, or business expertise can be hired to lead the project. The scope of the project needs to be developed to create a budget to keep track of the progress. The objectives for implementation big data is to grow the business and help the business to diversify in its gaming offerings. Skycity investments in business continuity and disaster recovery plan will also help keep itself business ready. Such huge investments in big data can be measured by the quality of output of decisions based on KPI’s and what if scenarios, the speed of decision making, like company need not wait for days to generate report. Production reports are available for operational managers, Dashboard and Scorecards are available for senior managers, Ad hoc reports are available for managers, Statistical reports, forecast reports are available for top level managers. The robustness in decision making using machine learning techniques is also a key indicator of the performance of big data analytics system.

4 Conclusions and Recommendations

Key Findings and Recommendations

It is noted that Skycity is working its way to embrace technology and streamline its work processes by adopting technological advances like Microsoft dynamics in its operations. There are many emerging technologies in gaming arena which can be embraced by the company to a popular brand with the young generation.  It would be recommended for Skycity to venture online and provide their services to passionate gamers in other parts of country and grow their revenue.  They can invest in launching gaming applications for mobile, laptops, tablets that are not pure gambling but involve in-app purchases to advance to other levels of the game. There is also plenty of potential to redesign and redevelop Skycity Hamilton and Queenstown property providing accommodation options to guests.  Queenstown is a major tourist destination and a building a hotel at in this location will be ideal for return on investments.  International businesses are also a major source of revenue for Skycity and a high paying customer is of great value to business. Skycity can invests in its in International Business salons to create a vibrating and digitally connected ambiance for its players. Conclusions

In this report, the role of IT in the business functioning of Skycity is presented. The different software applications that support the business processes are discussed and the use of major technology like cloud for storage and operations and emerging technologies in gaming industry has been discussed at great length.  These discussions indicate that there is ample scope for Skycity entertainment to grow and diversify its business thus making it more relevant to current time and keep up with it entertainment scenario to be live and happening.  The digital environment of hotels suggested in the report will suit the modern travellers and the new forms of entertainment with generous dosages of technologies like VR will attract millennials. Skycity business must change with the demographics to stay relevant with time and as per statistical reports millennials who will be dominating NZ workforce by 2020, which only means the Game Plan for Skycity should be accommodating this tech savvy generation in its business.