Return of Putting Panthers in the Pink

James Huckerby's first anniversary as the CIO of Panthers has recently come and gone. On the other hand, Roger Cowan has chalked up 37 years as the club's general manager. Along the way he's developed a healthy scepticism for over-hyped IT solutions. A less than perfect match? Guess again. The relationship is not only working, but working well.

When Roger Cowan assumed the role of general manager at the Penrith Rugby League Club 37 years ago, Digital Equipment's first minicomputer was new to market. Today, Panthers - of which the rugby league club is a part - is Australia's largest licensed club, still with Cowan at the helm, while Digital Equipment is a fading memory.

Although Cowan took his time appointing a CIO for the group (36 years in fact) he is adamant that information systems, whether manual or computerised, have always had a high priority within the group. "Thirty-seven years ago I was the first person who wanted to know what each individual poker machine was doing," he says. In those days the only systems that could do it were manual, but Cowan was early to demonstrate a thirst for information, and it remains unquenched today.

"We were probably the first club to write our own software," Cowan says. "We tried to design a poker machine security system and spent a lot of money on it. It would let us know if anyone opened a machine without authority and help to identify legitimate jackpots." But there was a catch. "It gave us so much information we couldn't analyse it all," he says.

Over time the poker machine population and information systems sophistication grew, as did the Panthers club, in Penrith, nestled at the foot of the Blue Mountains to Sydney's west. Again there was a catch: the two were not growing in lockstep.

By 1988 Cowan says the group was heading for trouble because, although sales were up, the bottom line was not. He did not feel he had sufficient information to identify and then fix the problem. Again he looked for computer-based solutions. Even by the late 1980s, and more than 20 years after Cowan first joined the business, the sorts of information systems available to run an operation that was essentially membership-based, not-for-profit, with licensed premises and gaming, remained rarer than hen's teeth and were generally bespoke.

"We had three full-time programmers who wrote our own ledgers. At that time there was nothing for the clubs," he explains. Just getting a payroll system that could handle the rosters and awards systems for the group was a challenge. Cowan admits Panthers Entertainment Group (PEG) bought or developed three, only the last of which, called Clubline, actually worked. That system still runs today and will undergo a conversion to SQL this year.

What Cowan learned about information systems vendors from his first-hand experience of them in the early days left him a bit wary, a not altogether uncommon reaction even nowadays. "A lot of people claim to be able to do things that they just can't. And if you don't have the technical experience it's difficult to know that," he says. Today Cowan has more experience, and while he is more sceptical about IT vendor claims, he also acknowledges that the supply of information systems for vertical markets such as entertainment groups has improved dramatically.

And he finally has a CIO: James Huckerby, appointed in early 2002 (see "Putting Panthers in the Pink", CIO September 2002). Even so, it is Cowan still who translates what the IT vendors tell him into opportunities for the group, taking strategic advice from Huckerby along the way. "There's a lot of potential here for marketing," says Cowan. "When I sat through the first presentation of [Microsoft's] Great Plains I learned all about the e-commerce opportunities and the information that you can get from it. This is statistical analysis; it's not just about accounting. It will give us a much better feel for which groups are not using the club. There are some very upmarket systems used by casinos that locate where they are drawing people from. For example, it would be good for us to know how many we are drawing from Mount Druitt. We have a lot of competition there.

"In the past you would fire [marketing] shotguns and hope that you would hit them [members]. But now with the technology and the statistics we can be much more focused - right into the individual customer," Cowan says. It will no doubt also be particularly interesting to his son Max Cowan who runs marketing for the group. Understanding the member-Panthers relationship more fully is of major interest to Cowan and it's reflected in some of the early tasks he has set Huckerby, with a customer relationship management and loyalty rewards program high on the agenda.

Page Break

Rookie Season

Cowan sees the relationship between the CEO and the CIO as evolutionary at PEG, and acknowledges that even 12 months ago he was not aware of the important role a CIO could play in the club's strategy. "Now I am aware that James should be involved in senior management strategy decisions," says Cowan. "We need the input of IT to make sure that we design strategies that are the best that we can do - that they aren't pie in the sky . . . or make us aware that we could do better."

There is no doubt that Cowan is wide awake to the opportunities that information systems can afford the group and says that IT spending is a lever for growth for the organisation, although sometimes he gets "horrified by the cost". He also retains a cynicism about some innovations. "Do you really want your fridge to talk to you?" he quips.

Talking fridges aside, Cowan wants to make sure that technology is widely deployed, and that the match between the technology and the business needs is precise. To that end he runs cross-functional management teams to set and implement strategies. Cowan and Huckerby, for example, sit on one cross-functional team with the chief financial officer and the director of gaming. One problem, however, is that in an organisation as sprawling as PEG - besides running the nation's largest licensed club, Panthers World of Entertainment, it also has under its banner the rugby league club, motels, 13 clubs across NSW, restaurants and plans for a retail/entertainment complex at Penrith (PEG has nine development applications before councils currently) - the cross-functional teams could easily become unwieldy and with competing needs.

For Cowan and Huckerby, managing the sprawling fiefdoms and meeting their information needs will be a challenge compounded by the competitive threats the club faces. Already licensed clubs' revenue streams from poker machines are under threat from pubs, which have been allowed to install poker machines since 1997. In addition, there is a gaming curfew imposed on 24-hour clubs in NSW that obliges them to shut off the machines for three in 24 hours (Cowan says the curfew in fact affects revenues for closer to seven hours). From May this year that curfew will be extended to six hours (from 4am to 10am), with Panthers already estimating the change might put at risk more than 20 per cent of its revenues.

Concurrent with these industry ructions was a series of management and board shuffles - not all of them smooth. Cowan, for example, faced an attempted boardroom coup late last year when a group of five directors attempted to have him removed. He survived what was a quite bitter and occasionally public stoush. Today a new group of directors has been appointed, which at this stage seems pro-Cowan, giving him a new lease of corporate life.

One of the first decisions made after surviving the coup attempt was to appoint former CFO Glenn Matthews as general manager of the Penrith Panthers club. Matthews will sit on the strategy group along with Cowan and Huckerby, and several other senior managers. This group was involved in the post-Christmas planning initiative setting a course for the business for the coming months.

Having contributed to the development of that strategy, Huckerby is now faced with delivering against it. Already the sheer scale and scope of the IT initiatives has him and his fairly small team at full stretch, although he has recently drafted some people from out in the business onto his IT team. Exacerbating the problem is the fact that some of the technology required is fairly esoteric. For example, the rugby league operation is using new technology that allows better analysis of player performance. (This will no doubt come as a relief to Cowan: in his 37 years at the helm, Penrith has taken out the Premiership only once.)

"We are investing in about the coolest technology that I have ever seen for the footy team," says Huckerby. "It stores all games for the last two years with flags for players and moves. For instance, we wanted to choose between two props. One of them impressed us a great deal in a game against us, but when we looked at about 100 of his hit-ups as opposed to the other contender, we established that he had a nasty habit of falling back on his arse rather than gaining ground. The other guy resembled a prime mover. This analysis all took place in around an hour."

Page Break

Huckerby is also involved in the rollout of some technology needed on the entertainment side. Prior to last Christmas he was, for example, involved in implementing a computer-based promotional system called Pango. Unique to the club, the system - which operates through point-of-sale terminals located in the club - now has an innovation patent to protect the intellectual property (IP).

Gaining a patent was particularly important to Cowan, who recognised, and was reluctant to lose, the competitive edge such a system might deliver. "If you spend quite a bit of money to have something quite different in Panthers, it won't be two days before someone comes in and looks at it. So we put something in that makes it more difficult to copy," he says. From conception to birth, Pango had a long gestation. Cowan says he had the idea for the system seven years ago, and while it went through internal trials, the club has only recently rolled out the final program.

Less specialised computer-based systems have not taken quite so long, although the new loyalty program is certainly no pioneer in its field. Nevertheless, it will help build loyalty and provide Cowan with a more intimate understanding of and relationship with the 120,000-plus club members, a relationship he believes is key to the organisation's long-term success. The Loyalty Magic program is expected to be widely deployed by April. Cowan grants the club is a latecomer to loyalty programs such as this, but says to risk the demotivating effect of a second-rate system was not something he wanted to risk. Instead, he waited until he had a system to rollout that he felt could deliver against the hype. Huckerby has more of a pioneering spirit it would seem. He is in the process of implementing the Great Plains CRM system, which hooks into the loyalty system. Panthers will be one of the Australian beta test sites for the new software. Being a beta site, says Huckerby, means that the company has had some input into the design of the product, is getting a good deal and being well looked after by Microsoft.

In addition to the CRM system, Huckerby has been scoping the Great Plains ERP system. He selected ABT Group to implement the software and it's scheduled to go live this month. The implementation, Huckerby says, "is going well. I am directing the finance and purchasing departments and we are involving the internal audit team in re-engineering business processes".

Monitoring the Members

A far more interconnected enterprise is of great value to Cowan and his executive team. Keeping tabs on members via the Internet is also an attractive proposition. "Ultimately it would permit direct communication with the members," says Cowan. "I would hope to have an e-mail address for most of our members. That will give us the opportunity for a very focused direct marketing [program] and allows us to communicate more economically and better."

Overseeing all of the group's Internet links to members does not fall squarely in Huckerby's lap, however. For example, although he has been involved in a re-engineering of the Panthers World Web site, which now has a new content management system, the revamp of the Penrith Panthers Web site has fallen to the organisation's public relations team and is, as such, outside Huckerby's control.

But not completely. If it's part of the IT pie, Huckerby has his finger in it. "No permission for anyone to do anything in IT is granted unless it is cleared by me," he says, ensuring that he exercises some soft control on all computing and information systems deployed throughout the group.

Page Break

SIDEBAR: Who's Got the Power?

When it comes to control of IT strategy, CEOs and CIOs must learn to strike a balance

Managing the balance of power between the CEO and the CIO is a delicate feat, according to Australian Graduate School of Management professor, Michael Vitale.

Vitale, who will keynote a session on IT governance at CIO's May 6 conference, believes that to avoid calcification of the information systems selection, "the fundamental decision needs to be made about who will prove the IT strategy. If the two of them can't get that right then there will be a problem. Strategies need one architect - although the thinking, the talking and the data gathering ought to be shared."

1 2 Page 1
Page 1 of 2
7 secrets of successful remote IT teams