Winning the Bet International Game Technology (IGT) is a leading manufacturer of slot machines and lottery machines for casinos and government lotteries. Headquartored in Reno, Nevada, with sales headquarters in Las Vegas, the company also maintains sales, manufacturing, and service sites in Africa, Australia, Europe, and South America. Its Rene site alone produces 140,000 machines annually. It has been profitable for many vears. In 2005 , it had ta profit of $437 million on revenue of $2.4 bilition, apparently a situation that would lull executives of other companies to think "If it ain't broke, don't fix it." Not IGT managers. Until 2002, each business function had iss own information system. IGT had different systems for handling sales, customer orders, manufacturing, and accounting. When managers wanted to recelve information about a specific customor order, they had to go to each functional unit to recelve a different piece of the information: customer details from the sales department, status of the machines being manufactured from the manufacturing units, and payment status from accounting. The accounting department itself had several software applications that handled different books, such as accounts recolvable, eccounts puyable, and the general ledger. As business was growing, manegers complained that they could not get comprehensive information on orders. The department develoged interface software to connect the systems, but there were still complaints that information was net coherent. The IT specialists admitted that they were maintaining a mishrnash of software. The loudest complaints came from the accountants. Every year it took them two weeks "to close the books." The accounting department pressured mansgement to purchase a now system that would make their work more efficient. The CIO understood their plea but was afraid that satisfying this department's request would trigger similar requests from other units, such as engineering and manufacturing. The result might be a better information system for each department, but disparate systems that still were not connected to each other. On the CIO's advice, IGT manegement decidod to implement an ERP system. A stoering committee and project team were assembled. Their members focused on business functionality rather than the technology. After the first selection, systems from three companies were considered: S.AP, Oracle, and J.D. Edwards (which was later acquired by Oracle). After further consideration, SAP won the contract, and IGT embarked on a two-year effort. In 2003, the company switched to using the RB EAP system, IGT did not disclose the cost of the project, but analysts estimate it was well over $10 million. When the systiom was ready, three functions were incorporated into one enterprise systom: product development, manufacturing. and finance, Like other ERP systems, FV3 is highly structured aven when modified for a particular customer. As often happened, the new system forced IGT to change some of its business processes. Howvever, the company chose SAPs system because it found it less rigid than other ERP systems. This was important to IGT, because it bullis machines to order. The systom afforded the compary several benefits. Price proposals are made based on more accurate information and estimates. Managers on the manufscturing foor can view or print out manufacturing process sheets at their own PCs. Emplovees can no longer ignore specifications or "eut corners." The system does not allow a process to continue when an antempt such as this is mode. The products are made mote elficiently and with fewer errors. The system connects at of the company's sites around the globe. One of the system's moduins is project management, which enables managers to monitor design changes and cosss involved in new product development. The new system replaced the old MrP (material requirements planning) system, but the cornpony still uses its internelly developed factory control system, which has been successfully integrated into the SAP systam. The factory control system enables managers to know whlch machines are bulit at which plant. IGT soduced the average petiud of ofdet to shipping from 9-10 weeks to 7-8 weeks, When a rush order is entered, IGT can now fulfill it in four weeks insteod of seven weeks. Between 2002 and 2005 the error rates in orders for raw materials decreased from 10 percent to aimest 0 . Inventory turn increased from 6.3 to 8.4 percent per year. IGT's C.O admits that the implementation was challenging- The company makes a variety of machlnes, which meant that many bills of materials had to be entered into the system (and new ones will have to be entered for new products). Adapting some features to the way IGT operates was not easy. However, the implementation was successful. The CiO credits the success to strong support from senior management, the establishment of a steering committee with members from all affected units, a capable project management tearn, a training ptogram to help employees understand how to use the new system, and the rigorous testing the system underwent before it was used. Source: Bartholomew, D. "ERP. Gaming Compeny Hits Jackpot' Basaline, October 2. 2006; (wwww.igt.com), 2007. coordinating email campaigns. However, an effective email campaign requires the same approach as for any other business: discipline. Although Wyndham implomented many email promotions, they were not receiving the results that they planned. Coupled with the effort needed to implement these campaigns, ther knew that a new approsch was needed. Working with a marketing firm. Acotiom, a more targeted approuch was developed. With the ousside consultants, they applied best practices to determine the timing and sequences of messages. They created webpoges and various email versions along with custom Subject text. These emails would be sent to a subset of their rewards members in the United States. It was important to tailor future emails to customers based on their past actions. Wyndham developed an automated email engine that operated based on wuch dasa. For example, a confirmation email was sent based en the completion of a registration. A variety of emails would be sent to rewards members based on a specific purpose, ranging from free aights to vacation specials to reward point specials. With the focus on email distribution, Whilham continued to offer members the ability to opt out of recesving emails. Their strategy and use of email technology was successtul compared with their previous email campaigns. Wyndham's total revenue linked directly from email solicitations increased by 187 percent. Various other metrics showed positive gains as well. The rate of ernails that were openod by users incressed by 8.2 percent while registration rates for a summer promotion increased by 43 percent over a previous campaign. Sources: Aquino, J. (2012). Don't count out email vet. Customer Relationship Manapement, 16-19. Acsino, J. (2012). Wyradharm hoteis' sarpated emails beeak records. Customer Relationshle Management, 16, 37, Rabel, 5. (2010). Hot or not: Email marketing ve. socily-madie marketing. Adwertising Age, 81(29), 16 . Thinking About the Case 1. Why was it important for Wyndham to reexamine their emall campaign approach rather than just abandon it? 2. What do you believe was the turning point for this effort? 3. Why have marketing professionsls approached email campoigns differontly thas other prometional methods? 4. Considar the emails that you recetve from businesses. Contrast and compare the approach of these beisinesses versus Wyndham's approsch. CHAPTER 3 Business Functions and Supply Chains 105