程阳：吉泰克在路易斯安那州

彩票综合管理服务的实践

——吉泰克路易斯安那州子公司CEO 访谈录

 【PDF】Request for Information Solicitation for Hoosier Lottery Integrated Services

 

An Interview with Connie Laverty O’Connor

 

Last summer, the State Lottery Commission of Indiana issued a Request for Information (RFI) in a process designed to choose an experienced, responsible private entity that would help the Hoosier Lottery generate a significant increase in net revenues through innovation, agility and market responsiveness. The end result was an Integrated Services Agreement (ISA) with GTECH Corp., and the company has hit the ground running with its subsidiary GTECH Indiana, led by Chief Executive Officer Connie Laverty O’Connor. She recently took some time out of her busy schedule to talk with Lottery Insights about the new agreement.

 

What was the State of Indiana looking for when it issued the Request for Information?

 

The State Lottery Commission made it clear in the RFI that the State would maintain control of the Hoosier Lottery, and that the Commission was looking for a provider of integrated services with the highest standards of integrity, security, transparency, honesty and fairness. They wanted alignment around a growth business plan in order to generate incremental dollars for the State of Indiana. I believe that the State correctly identified opportunities to generate growth that had not been realized given that the construct within government was constrained and was not as nimble as it needed to be in what is essentially a consumer packaged goods product environment. The State was looking for an organization that would work in total alignment with the Lottery Commission to not only achieve operational efficiencies, but most importantly, to approach the marketplace in a Customer First integrated and comprehensive way.

 

What were some of the opportunities the state had identified?

 

The State Lottery Commission looked at the performance of other lotteries and felt that an uplift was possible if best practices were applied; they sought insights from the bidders on strategies to unleash that potential. The Lottery was in the third quartile in several product categories and Executive Director Karl Browning and the Commission viewed this as a growth opportunity. The Commission also realized that the existing system of managing retailers was constrained. And, because of the delivery system, the sales staff was not able to focus on sales. Ultimately, the Commission identified that it was going to require a re-engineering of infrastructure, marketing, advertising, promotion and packaging, and concluded that outsourcing those capabilities to a best-of-class provider that would work in total alignment with the Lottery Commission was the most intelligent way to optimize the growth potential.

 

What was involved in preparing GTECH’s response to the RFI?

 

We recognized the State was looking for innovation – innovative games, solutions and products. We had a large team of multi-disciplined professionals working on the bid. Our depth of global resources expertise and lottery experience allow us to think creatively about different kinds of solutions to bring to a mature marketplace.

 

GTECH conducted comprehensive Indiana market research as part of our due diligence. Not just consumer research, but also qualitative retailer research and on-the-ground site surveys, all to validate what we were seeing in the benchmark research about consumer attitudes and their usage of the lottery – their barriers, their affinities and their perceptions.

 

So what did you learn from your research?

 

It was clear from the beginning that there are major regional differences. Somebody on the outside cannot appreciate that without working on the ground and listening to the retailers and the players across Indiana’s different communities. If we are not willing to respect those nuances across the state, I don’t care how good our resources are, we are not going to be able to unleash Indiana’s revenue potential. We need to touch Hoosiers’ hearts, not just influence their mind. I think the Lottery has already influenced Hoosiers’ minds (trust brand quotients are solid), but not necessarily touched their hearts. We need to celebrate local winners across the 92 counties – big winners and small winners. Creating a local culture of winner awareness is important to drive growth and brand relevance.

 

How will you attract new players to build that revenue potential?

 

The number one pillar of our plan is a comprehensive brand transformation from a retailer and games perspective, done in a socially responsible way. The Lottery must have a brand that is relevant, exciting, energizing and of course fundamentally trusted. When you can energize the population and get people to associate with the brand – like Starbucks, Southwest Airlines, Walgreens, Google, any brand that has created that relevance – you attract new customers.

 

The brand image of the Hoosier Lottery is going to be transformed. The brand image campaign is going to be aspirational and optimistic, with attributes manifested all over the State in destination signage outside of every single store. We’re investing millions in brand transformation infrastructure. We want the Hoosier Lottery brand to have equity, relevance and excitement. It has to touch people in their hearts and it has to be for “people like me.”

 

Beyond brand transformation, what else is involved?

 

We will be expanding into new retail locations and different trade styles, into areas that we have not been in before. We have a sales staff, which because of the existing inventory management infrastructure, hasn’t had the time to realize their sales potential. There’s a huge opportunity to drive retail business through liberating the sales staff from their current operational duties by automating the technology and providing them with a modernized infrastructure

 

It’s also about innovating in the instant space and expanding the instant ticket program with line extensions– establishing brand loyalty to families of appealing consumer-driven games. It’s about optimizing prize structures and reallocating prize dollars to achieve more meaningful wins. And it’s about programming the games so they are more suspenseful and have more entertaining play value. For draw-based games, it’s about professionally merchandising these games in the stores, particularly in respect to digitized destination jackpot signage. So there’s all this fundamental re-engineering that has to happen to attract new players. It’s really not any one thing – it’s a combination of many things working together in a holistic integrated way, aligned around a common market driven goal.

 

Please talk a little more about your plans for retail expansion.

 

It’s going to be very hard work.

 

In our due diligence efforts we visited hundreds of retail businesses, and I met with a variety of retail business leaders and store managers. Listening to this community provided invaluable insight into some of the low hanging growth opportunities from their perspectives. Product convenience is critical and without retail expansion and retailer optimization, we do not offer product convenience. Without product convenience, we cannot drive growth.

 

It was very clear in our due diligence that the penetration levels of retailers here is low, at almost 1,700 people per retail location, compared to industry best practice benchmarks of 1,100 to one.

In order to build the Hoosier Lottery, we need to selectively increase distribution and expand to quality locations, not just any retail locations. We’ve also reached out to major national chains, offering innovative business models and working directly with them in an effort to overcome their labor and accounting concerns around selling lottery.

 

Of course everyone has been talking about these chains and big box stores for years without much to show for it. Why do you think it will be any different in Indiana?

 

We are convinced that we will be able to move this needle. Most chains’ concerns with lotteries are about lines, labor and losses. They are concerned about managing a product that only gives them six cents on average on the dollar – here in Indiana it is 5.5 cents on instants –not great incentive for them because of the lines with big jackpots, the labor required with the instant tickets, and the confusion and disruption to front-end operations which goes with lottery account management. These are all legitimate concerns. But one of the things I’m so excited about here in Indiana is that because GTECH Indiana is the chosen service provider working in lockstep with the Lottery Commission, we are empowered to actually change the processes which the chains are not willing to accommodate. We’ve only been here less than 100 days and we’ve already streamlined the licensing process. The secret sauce of retailer expansion, retailer optimization and chain acquisition is retail-friendly business practices. We cannot expand chains until we are willing as an industry to understand that we are in their space and need to fit in with their front-end national operations.

 

We have a unique opportunity because we have the flexibility to adopt different business models. We have some state-of-the-art technologies coming in here, including new accounting capabilities, which will allow us to do things that have not been done before. We are fitting in to their processes, not fitting them into ours.

 

How would you describe your overall progress so far?

 

We signed the contract on October 12, a short eight days from contract award. I can’t even begin to tell you how well this partnership with the Lottery is going. We are ahead of schedule right now and hitting milestones every single day. Although our first official year won’t begin until July 1, within a week of signing the contract, Director Browning asked us to assume responsibility on his behalf for sales and marketing. We began the search for a new advertising agency at that time, and ultimately hired Mortenson Safar Kim, an Indiana firm, in December.

 

On the operational front, we created a new organizational structure and completed the process of transitioning Lottery employees over to our business. We completed the transition of all Lottery employees in the sales and marketing functions as of December 16, and ensured they got credit for their tenure with no lapse of benefits. We unveiled the Business Plan to every employee in the all-employee (Hoosier Lottery Commission and GTECH Indiana) Sales Kick-Off conference on January 9 and 10.

 

This has been the most efficient, effective, transparent and fair process that you could possibly ask for. The morale is high, the energy is even higher and I see lots of smiles on lots of faces. We have outstanding people working for this lottery and our new resources working with this team as ONE team will be a world class organization poised to drive growth

 

What are the next major moves?

 

We are moving at warp speed here. Our new advertising and brand imaging campaign, “Imagine That,” will debut in March, featuring Hoosiers sharing their dreams about winning the lottery. On March 31st we will transform the technological infrastructure. We will introduce all-new system software, a new automatic ordering system, a new inventory management system, a new warehousing system and a new claims system – the entire package. So on the morning of April 1, when the retailers walk into their store, it will be a brand new day. Four days after that we will launch our first transformational family of games, Cash for Life, and will run a statewide “ask for the sale” program to ensure these games get on the counters across the state.

 

How is it all coming together between the Hoosier Lottery and GTECH Indiana?

 

We are effectively working as one organization – acting as one team, glued together in a collaborative, cooperative, open and transparent way. We are all in this together, aligned around one goal, which is to deliver incremental revenues to the State of Indiana. We said we would deliver an additional almost $2 billion over 15 years, and we aim to deliver that.

 

As outlined in the ISA, the State Lottery Commission oversees all of our business decisions. We had our first Lottery Commission meeting on December 19 and the chairman noted he had already heard very positive feedback from retailers and legacy employees alike. Retailers were happy that we were physically conducting retail advisory meetings in various communities around the state, listening to what’s working and what’s not working for them to sell more tickets.

 

You were also involved in Illinois when Northstar first took over as private manager for the Illinois Lottery. Are there functional differences between the Indiana and Illinois operations?

 

There are some, yes. For example, in Indiana, Scientific Games was the Lottery’s system and terminal supplier; they will now be our supplier partner here. It’s just a different kind of partnership than it was in Illinois, where both companies hold ownership stakes in Northstar. Here, we have a 15-year contract, as opposed to the 10-year contract in Illinois. With respect to employees, there is no union here as there is in Illinois.

 

Importantly, reinforcing the idea that we are one organization, I’m physically sitting in the Lottery building, as are all of our Indianapolis staff. That’s the way this construct was set up. The Commission wanted there to be one team, one Hoosier Lottery. We’re one organization, completely committed delivering on our promise.

 

In closing, do you have any thoughts about private management efforts to share with other jurisdictions?

 

I believe lotteries understand their own markets better than somebody like me. Rather than offer advice, I would only observe that it’s important to put the right people in the right roles, aligned around a clear growth vision; to follow a market-driven, retail-friendly business approach; and to develop a detailed comprehensive business plan that your entire organization is willing to implement.

 

I would suggest that any lottery interested in optimizing their potential should evaluate different constructs to get them there. Whatever construct it is that enables you to have that kind of clarity of vision around growth, and offers resources flexibility and investment to drive growth, then that is probably a good solution. But that may take a different form in a different place, based on the local regulatory framework, the sensibilities of the population and the infrastructure.

 

Connie Laverty O’Connor, GTECH Senior Vice President and Chief Marketing Officer, leads the delivery of integrated services as the Chief Executive Officer of GTECH Indiana. A 30-plus-year veteran of the lottery industry, she was CEO of Northstar Lottery Group through the Illinois Lottery’s successful transition to the private manager model. Prior to joining GTECH in 2006, Laverty O’Connor served as Chief Operating Officer of the Georgia Lottery Corporation, and had a long career with the New York Lottery, including 14 years as Director of Marketing and Sales. She holds a Bachelor of Arts degree in English and Psychology from Empire State College in Albany, N.Y., and a Master of Arts degree in English and Psychology from State University of New York at Albany.