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Fuel Digital Enablement and Value in Gaming & Hospitality

2022 IT Benchmark Report

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  • Digital is the new normal. COVID-19 was the volatile breaking point that forced change in the industry on an IT, business, and customer level.
  • The gaming and hospitality industry is focused on keeping the lights on. The industry must be agile to support the business to suit shifting customer preferences and expectations. To do this, IT needs to be “digital” – able to innovate, support exceptional online and on-property experiences, provide insight-creating data tools, and keep the operations secure especially in a highly regulated environment.
  • Unfortunately, IT organizations fall short when it comes to digitally enabled or transformed business and IT capabilities.

Our Advice

Critical Insight

Based on the results, gaming and hospitality IT departments are currently co-leaders of digital, an insupportable position for bridging the digital transformation gap. IT must gain total digital ownership by improving the business executive perception of IT and evaluating pressing processes to enable digital transformation.

Impact and Result

Use Info-Tech’s data-driven IT diagnostics as a baseline to determine IT’s capability to digitally transform the business.

Break down digital into five growth categories to devise improvement initiatives: Digital Strategy, New Customer Frontiers, Continuous Innovation, Workforce of the Future, and Resilient Operations.

Analyze from the three perspectives to see where your IT department stands:

  • Do you have support from your business users to transform their departments?
  • Do you have the mandate from executives to innovate?
  • Can IT execute digital?

Fuel Digital Enablement and Value in Gaming & Hospitality Research & Tools

1. Fuel Digital Enablement and Value in Gaming & Hospitality Deck – A gaming and hospitality benchmarking report to determine IT’s capability to digitally transform the business.

Uncover critical information on how your team compares with IT organizations from others in the industry. Identify where your IT team should focus its energy to improve IT's effectiveness and enhance business end-user and executive satisfaction.

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Fuel Digital Enablement and Value in Gaming & Hospitality
2022 IT Benchmark Report

Executive Summary

Your Challenge

  • Digital is the new normal. COVID-19 was the volatile breaking point that forced change in the industry on an IT, business, and customer level.
  • The industry deals with a high level of digital threats, disruptions, and new entrants within the space. Organizations must determine how they will sustain and differentiate themselves in this competitive environment.
  • There is an accelerated pace and direction for digital transformation. Organizations are now trying to understand its implication on their own businesses: What are the opportunities? What are the risks? Where does focus need to be placed?

Common Obstacles

  • The gaming and hospitality industry is focused on keeping the lights on. The industry must be agile to support the business to suit shifting customer preferences and expectations. To do this, IT needs to be "digital"; able to innovate, support exceptional online and on-property experiences, provide insight-creating data tools, and keep the operations secure – especially in a highly regulated environment.
  • Unfortunately, IT organizations fall short when it comes to digitally enabled or transformed business and IT capabilities.
  • The industry has the perception of being infrastructure-heavy. Organizations will need to push past "keep the lights on" operations to digitally transform and innovate the business.

Info-Tech's Approach

  • Use Info-Tech's data-driven IT diagnostics as a baseline to determine IT's capability to digitally transform the business.
  • Break down digital into five growth categories to devise improvement initiatives: Digital Strategy, New Customer Frontiers, Continuous Innovation, Workforce of the Future, and Resilient Operations.
  • Analyze from the three perspectives to see where your IT department stands:
    • Do you have support from your business users to transform their departments?
    • Do you have the mandate from executives to innovate?
    • Can IT execute digital?

Info-Tech Overarching Insight

Based on the results, gaming and hospitality IT departments are in an unsupportable position to bridge the digital transformation gap. IT must gain total digital ownership by educating the business departments to transform, improving the business executive perception of IT to innovate, and evaluating pressing processes to enable.

COVID-19 was the volatile breaking point that forced gaming organizations to reassess their digital priorities and strategies

Digital Shift

Old Paradigm

New Paradigm

  • Predictable regulatory changes with incremental impact
  • Corporate social responsibility (CSR)
  • Brick-and-mortar and multichannel focus
  • Guests value price
  • Low rates of inflation
  • Cloud-first strategies
  • Physical assets
  • Reluctance to use digital collaboration
  • Unpredictable regulatory changes with sweeping impact
  • Environmental, social, and governance (ESG)
  • Omnichannel acceptance
  • Guests value convenience and speed of fulfillment
  • High inflation that erodes purchasing power
  • Cloud-only strategies
  • Aggressive asset decapitalization
  • Wide acceptance of digital collaboration

New business models define the digital transformation – not technology

Industry 4.0

Organizational Growth

  • Blockchain
  • Mobile
  • IoT
  • Artificial Intelligence
  • Cybersecurity
  • Social Media
  • Agile Cloud
  • Robots & RPA
  • Edge Computing
  • API Economy & Data Privacy
  • Revenue Growth
  • Customer Engagement
  • Social Value
  • Profit
  • Digital Trust
  • Loyalty
  • Market Share
  • Future-Proof Workforce

Disruptions driving digital transformation in the gaming industry

The Addition of online products

  • iGaming has become a lucrative product, earning $3.71 billion among 6 states alone (American Gaming Association, 2022).
  • Online sports betting has expanded drastically in North America since the pandemic with 87% of states gaining legislative approval after 2019.

The Acceleration of Platform Provision

Platform provision consists of:

  • Being asset light: Operators leverage REITs to unload assets and focus on the brand. For example, GLPI owns 35 Penn Entertainment properties.
  • Digital acquisitions and spin-outs: Operators look to acquire digital assets and/or build digital units to focus and succeed in the online market. For example, in 2015, PENN Entertainment formed its digital entity, Penn Interactive Ventures.

The budding future of web 3.0

  • Crypto and NFTs are becoming value creators for all industries. Experts predict crypto gambling will reach a value of $93 million by the end of 2023 (Yahoo, 2022).
  • The potential for casino involvement in the metaverse is staggering. Decentral Games' ICE Poker Virtual Casino has made over $7.5 million from November 2021 to February 2022 (Business Insider, 2022).

The Frictionless & Convenient world

Mobile app strategies are converging with contactless and digital strategies to provide a seamless and easily accessible customer experience.

  • Omnichannel: Grosvenor Casino experienced a 12% increase in revenue from omnichannel efforts (Rank Group PLC, 2021).
  • Hyper-personalization: 90% of customers find personalized advertising appealing (Deloitte, 2020).

The gaming CEO views digital as promising

2022 Top Board Priorities for Information Technology

Thomas R. Reeg – Caesars Entertainment q2 2022 earnings call

"When we started digital, we didn't have the ability to segment customers … so you, in effect, underinvest in your best customers and overinvest in your worst. That's no longer the case. And we see the fruits of that every day as results come in and it's great to see."

60 million
Number of Caesars Rewards loyalty members

Jay Snowden – Penn National Gaming q2 2022 earnings call

"Over the past few years, PENN has transformed our business through a highly differentiated strategy, focused on organic cross-sell opportunities, which is reinforced by our investments in our market-leading retail casinos, sports media assets, owned technology, including a state-of-the-art, fully integrated digital sports and online casino betting platform and an in-house iCasino content studio."

$1.6 billion
PENN's 2022 fourth quarter revenues

Raymond Pineault – Mohegan Gaming & Entertainment q3 2022 earnings call

"We're exceptionally pleased with the results that our digital is performing. And we anticipate, as we've said all along, that we will continue to run a profitable Digital Gaming business."

28.7%
Mohegan Gaming's increase in revenue for 3 months ending March 31, 2022

William Hornbuckle – MGM Resorts International q2 2022 earnings call

"Our investment in BetMGM is an important enabler to our omnichannel strategy and a key competitive advantage that allows us to drive incremental earnings between our brick-and-mortar and online channels."

29%
MGM's iGaming market share in the industry

The shift has redefined the pace and direction of digital transformation across the gaming industry

Understanding the implications for your industry is key for gaming CIOs to support the digital aspirations of their organizations and to help steer their transformation.

The speed and pace of industry change is at an all-time high…
…posing risks to incumbents and opportunities for all.

  • What are the implications for my gaming IT department?
  • Which IT initiatives will make the greatest impact for digital?
  • How do I drive innovation?
  • What are my peers doing in digital?
  • What are the IT risks and considerations if I don't act now?

Our data is sourced from five analytical diagnostics

CIO Business Vision Diagnostic

Take Info-Tech's CIO Business Vision Diagnostic to learn what the business sees as important as well as their satisfaction with various core IT services.

CEO/CIO ALIGNMENT DIAGNOSTIC

Take Info-Tech's CEO/CIO Alignment Diagnostic to determine the vision of business executives and whether IT is aligned.

Management & Governance Diagnostic

Take Info-Tech's Management & Governance Diagnostic to gain real insight into which processes your IT staff thinks are important and effective.

IT Staffing Diagnostic

Take Info-Tech's IT Staffing Diagnostic to gain real insight into where your IT staff are spending their time, perceived effectiveness, and barriers to success.

Security Governance Diagnostic

Take Info-Tech's Security Governance Diagnostic to understand strengths and weaknesses of IT security governance and management.

Your gaming organization has the opportunity to enable a digital business

Digital Business Growth Opportunities

Digital Strategy

Organizations must meet new digital threats ahead, simultaneously focusing on operational responsiveness and resilience.

Continuous Innovation

Skills to support technological innovation will be necessary to develop internally and procure through partnerships.

Workforce of the Future

Digital transformation is not necessarily about headcount reduction. The workforce and culture are integral to the future of the organization.

New Customer Frontiers

The global pandemic has unlocked new needs and opportunities for gaming and hospitality organizations to create value for their guests and players.

Determine where IT stands based on three perspectives

Mandate from executives to innovate

IT needs to be viewed by executives as an "innovator" for the business. Therefore, IT must be able to make the case for the mandate of digital evolvement in the organization.

Support from business departments to transform

Support is required from business end users since their departments will be impacted by the enterprise-wide, cross-functional digital transformation.

IT's Ability to Execute

Succeeding in digital transformation will depend on IT's maturity level. IT must determine how effective their processes are on many levels: staffing, technology, skills, processes and procedures, etc.

Fuel digital enablement and value in gaming

Drill down to understand your IT department's strengths, weaknesses, and opportunities.

Leverage Info-Tech diagnostics

Capture your organization's current state, using the diagnostics as a baseline to determine IT's capability to digitally transform the business.

Distribute results into five digital growth categories

By breaking down digital transformation and plotting results into five digital growth opportunities, your organization can establish requirements and foundational elements necessary to thrive in a digital economy.

Determine IT department standing by analyzing through three perspectives

Recognizing IT's readiness relies on perspective. Do your diagnostic results illustrate business support, revenue-generating innovation, and IT effectiveness? All are required to enable digital enablement and value.

This is an image of the Digital Enablement & Value hierarchy.

How to read this report

In this report, we…

Compare PRE-COVID-19 DATA vs. During/Post-COVID-19 Data

Determine if the pandemic stalled or accelerated the improvement of processes and services by analyzing diagnostic results before 2020 against results after 2020.

Compare by hotel star rating

Analyze diagnostic results based on hotel star rating to determine benchmarking alignment:

  • 2-Star: Offers basic necessities and may offer some limited amenities
  • 3-Star: Offers a balance between affordability and amenities
  • 4-Star: An upscale hotel that offers amenities, activities, and extras
  • 5-Star: A luxurious hotel that offers high-end accommodations

Compare by size of Gaming & Hospitality (G&H) Organization

Determine digital maturity based on size of organization by analyzing diagnostic results by the following levels:

  • Small ($0 - $99 million)
  • Medium/Large ($100 million - $1 billion)
  • Enterprise ($1 billion - $10 billion)

Compare 2021 Report results vs. 2022 report results

Determine if IT has improved or worsened in the past year by analyzing overall diagnostic results in the published 2021 benchmarking report against results in 2022.

Compare against adjacent industries

Analyze diagnostic results of adjacent industries against results of G&H organizations to determine benchmarking alignment. Adjacent industries have similar characteristics to gaming and hospitality:

  • Healthcare: High compliance
  • Banking: Highly regulated (KYC [know your customer], AML [anti-money laundering])
  • Retail: Sales transaction and customer experience characteristic

Digital Strategy

Section 01

  • Annual benchmarking report

Digital transformation is not simply about technology. Your digital strategy efforts must capture how your organization creates value in a digital era.

Info-Tech resources

Gaming and hospitality organizations have support from business end users

CIOs must Continue to climb the maturity ladder to help the business drive Digital growth.

Stakeholder satisfaction is IT's key metric. G&H's maturity is rated as a "business partner" on Info-Tech's maturity ladder. CIOs at this level can play a role in digital transformation by improving customer-facing products and services. Operators should aim for a higher mandate by achieving the "innovator" level where IT can help to fundamentally change the business by becoming a revenue center over a cost center and a leader vs. an order taker. Additionally, organizations below 80% must prioritize initiatives to increase business stakeholder satisfaction to improve the perception of IT.

G&H's Business Stakeholder IT Satisfaction

This is an image of G&H's Business Stakeholder IT Satisfaction

The Landscape of Overall IT Satisfaction in G&H Organizations

This is an image of a bar graph showing the overall It Satisfaction score, color coded into green, yellow, and red to represent the percentage of organizations with scores above 8.0, between 6.0 and 8.0, and below 6.0 respectively.

Satisfaction varies depending on size of organization and star rating

Satisfaction by Size of Organization

A bar graph is depicted with the following dataset: Small	78.4%; Medium/Large	81.0%; Enterprise	78.0%

Satisfaction by Hotel/Resort Star Rating

A bar graph is depicted with the following dataset: 3-Star	82.6%; 4-Star	79.9%; 5-Star	69.6%

Medium/Large organizations have the highest satisfaction, especially when you consider the challenges that small and enterprise organizations naturally experience. Small organizations often experience resource constraint on a budget and staffing level that impacts capacity. Enterprise organizations experience complexity such as M&A, decentralized organizational structures, and multi-properties (in various geographic locations).

As stars increase, satisfaction decreases. 5-star organizations have higher demands, especially when you consider customer expectations, which further translates to the expectations of executives and end users. 5-star organizations need to be prepared for customization to reach and exceed customer satisfaction.

IT must see at least 80% satisfaction for all business departments

A bar graph is depicted comparing overall satisfaction against overall value.  A red box is drawn around the bars for: Marketing; Finance; Casino/Gaming Operations; and Audit & Compliance/

Marketing – 79.6% 2022 Satisfaction
72.0% 2021 Satisfaction

A 10.6% increase in satisfaction from 2021 is promising, since the relationship between Marketing and IT has been known to be misaligned. As organizations increase their presence online, IT needs to continue supporting Marketing in the context of customer engagement and loyalty.

Finance – 79.1% Satisfaction
70.0% 2021 Satisfaction

This is an important area to look for satisfaction because of Finance's role in digital transformation when it comes to budgeting approvals and the view of IT as a revenue center over a cost center. IT has improved this relationship, improving by 13% from 2021.

Gaming Operations – 77.7% 2022 Satisfaction
78.0% 2021 Satisfaction

Gaming operation satisfaction has largely stayed the same from 2021. Since this area has largely been riddled with legacy applications and manual tasks, a lack of improvement is understandable. Although organizations are looking to expand to the online space, IT must prioritize and increase effectiveness here before considering the shift to online.

Audit & Compliance – 72.9% 2022 Satisfaction
84.0%% 2021 Satisfaction

Audit & Compliance has decreased in satisfaction by 13.2% from 2021. Satisfaction may be tied closely with IT's low effectiveness in business process controls and internal audit to ensure they meet security and integrity requirements. Additionally, department processes have been known to be mundane and manually intensive. Automating responsible gaming, KYC, and AML processes will be crucial as operators increase their presence online across jurisdictions.

Being a digital business is contingent on achieving a high degree of executive satisfaction (which they don't have)

G&H's Business Executive IT Satisfaction

This is an image of G&H's business executive IT Satisfaction Table.  It includes the categories: Innovator; Business Partner; Trusted Operator; Firefighter; and Unstable.

CIOs must climb the maturity ladder to gain an increasingly innovative perception of IT from business executives (CXOs) to drive digital growth. At the moment, IT is successful at keeping costs low and the business happy, at most. Your digital strategy must capture how the organization creates value in a digital era. With 60% of organizations being firefighters or unstable, IT is not able to capture how the organization creates value, and therefore, has not reached the level to be viewed as helping to increase revenue or assisting in the penetration of new markets.

IT is effective in "keep the lights on" operations but must improve core digitally transformative processes

This is an image of the strategy to improve core digitally transformative processes.  It is laid out to resemble the periodic table.

Effectiveness in KLO operations is not enough to enable digital transformation. IT departments must consider improving processes that are pivotal for digital transformation. Bordered processes with low importance are especially concerning and must be evaluated immediately because it means that coordinated efforts, staffing, and resources to improve those areas are lacking.

The ability to lead digital transformation relies on the evaluation of strategy and governance

IT Strategy is a key indicator for the future performance of a digital strategy

IT Strategy is a key indicator for the future performance of a digital strategy

This is an image of a red box containing the words APO02 IT Strategy

IT Strategy Classification:

Improve immediately

High Importance. 8.56

Low Effectiveness. 6.42

  • IT strategy is structurally similar to digital strategy. The department already works with the business across functions and understands all the various nuances and complexities. Additionally, IT already works to align with business strategy while interacting with components of risk management and finance.
  • The industry struggles with IT strategy, which is a key indication that digital strategy will, too, lack effectiveness. This function must be improved immediately as success depends on both IT and digital initiatives being clearly aligned to business goals.

Poor IT Governance means inconsistency in business-aligned strategies and Objectives

This is an image of a yellow box containing the words EDM01 It Governance

IT Governance Classification:

Evaluate Process

Low Importance. 8.50

Low Effectiveness. 6.49

  • IT governance and IT strategy work together, ensuring that IT-related decisions are aligned with the business. Low effectiveness foreshadows the risk of an inconsistent approach to making decisions that line up to digital business strategies and objectives.
  • Low importance means that there may be uncoordinated efforts to ensure that IT-related processes are overseen effectively and transparently and that legal and regulatory compliance requirements are met.

Customer Frontiers

Section 02

  • | ANNUAL BENCHMARKING REPORT

Make sure you have the structure that enables continuous exploration by developing digital-first business models and delivering connected experiences.

Info-Tech resources

Client-facing technology is the competitive differentiator in the industry

The pandemic has unlocked new needs and opportunities for gaming and hospitality organizations to create value for their guests and players. The gaming and hospitality industry lives and dies on its ability to understand customer behaviors. As jurisdictions around the world legalize parts of the online portfolio, we expect these percentages to increase over time. The implementation of these digital products and services will not be enough. We are starting to see the convergence of various strategies (mobile, cashless, contactless, etc.) to reduce data silos and provide seamless, hyper-personalized, and omnichannel customer experiences.

G&H Share of digital products and services by organization size

Satisfaction is improving, but the business needs to be educated on the importance of client-facing tech in a digital world

G&H's increase in Client-Facing Tech Business satisfaction

This image shows the increase in client-facing tech satisfaction, from 70.7 to 74.7 from 2020-2022

  • The mediocre importance ranking of client-facing technology is a cause for concern. In gaming and hospitality, the guest experience online and offline is everything, especially in the post-pandemic era where digital preferences and expectations have been high in demand.
  • Importance of client-facing technology should be higher for the sake of the customer. Expectations of IT should be higher, as anything that affects this experience will heavily influence customer perception of the brand.
  • On the bright side, business satisfaction is improving. Ensure the continual improvement of this service as customer experience is paramount in this highly competitive and evolving industry. Improving satisfaction here remains a priority.
  • The business needs to prioritize the optimal delivery of client-facing technology. Delivery relies on project management and requirements gathering. With a low ranking of importance for both, the technology's experiential and engagement value will be hard to realize.

2022
Business end users' ranking of the 13 core services

13 Core Services Importance Ranking Satisfaction Rating
Network & Comm. Infrastructure 1 82.60%
Service Desk 2 86.00%
IT Security 3 87.80%
Data Quality 4 77.60%
Business Applications 5 78.70%
Devices 6 73.80%
Client-Facing Technology 7 74.70%
Work Orders 8 83.70%
Analytical Capability 9 79.60%
IT Innovation Leadership 10 78.50%
Projects 11 79.20%
IT Policies 12 84.00%
Requirements Gathering 13 78.10%

The ability to deliver digital products and services via client-facing technology relies on the evaluation of PPM and projects

It must be capable of initiating, planning, controlling, and executing digital projects

This is an image of a red box containing the words BA01 Project Management

Project mgmt. Classification:

Improve immediately

High Importance. 8.52

Low Effectiveness. 6.39

  • IT will need to restructure products and services around digital. In the context of digital transformation, project management must be more responsive, adaptive, and proactive to digital customer needs and market conditions.
  • IT must rethink interactions with customers. This high importance, low effectiveness presupposes the awareness that interactions with customers must change but that capacity and execution is lacking. IT cannot deliver projects impacting organizational value realization without risk or time delays

To create digital solutions, IT must be effective in managing the collection of business requirements

This is an image of a red box containing the words BA01 Requirements Gathering

Requirements Gathering Classification:

Improve Immediately

High Importance. 8.68

Low Effectiveness. 6.31

  • Digital transformation demands effective requirements gathering. Introducing new technology to improve the organization's performance and customer experience requires understanding the business capabilities and processes and the ability to gather requirements that align with all stakeholders and meet expectations.
  • Low effectiveness means customer needs may be forgotten. In many cases, employees are focusing on the output rather than the outcome. With siloed departments being a common challenge, cross-functional alignment on customer requirements will be a priority.

Continuous Innovation

Section 03

  • | Annual benchmarking report

Engage in open innovation, accelerate process automation, simulate your environment, design for emerging needs, and build an AI advantage.

Info-Tech resources

The business view of "innovation" must improve

Business Executives' ranking of IT innovation contributions

How strongly should IT innovation contribute to the business in the following areas? Score out of 10 Ranking
Improved Business Processes 6.2 1
Core Product & Service Improvements 5.8 2
Reduced Costs 5.4 3
Increased Revenues 4.6 4
Penetration Into New Markets 4.5 5
  • External, future-forward innovative priorities are ranked low by business executives, specifically, increased revenues and penetration into new markets. With the CXO view of innovation being largely internal, culture must be improved for IT to be viewed as a true innovator for an increasingly digital and customer-facing environment.
  • Business end users have ranked the priority of "IT Innovation Leadership" more conservatively. Since it's the business that will be undergoing these digital changes, it's important that they view IT as an innovative leader so that gaining buy-in for initiatives is effortless.
13 Core Services Ranking
Network & Comm. Infrastructure 1
Service Desk 2
IT Security 3
Data Quality 4
Business Applications 5
Devices 6
Client-Facing Technology 7
Work Orders 8
Analytical Capability 9
IT Innovation Leadership 10
Projects 11
IT Policies 12
Requirements Gathering 13

The ability to drive design and innovation relies on the evaluation of strategy and governance

Digital transformation requires business innovation

This is an image of a yellow box containing the words APO04 Innovation

IT Strategy Classification:

Evaluate PROCESS

Low Effectiveness. 8.20

Low Importance. 5.96

  • Low importance explains the less-than-innovative business stance on IT. Either your business doesn't find IT to be an innovative leader, which has decreased IT's need or desire to support this area, or IT doesn't find the process to be important, and therefore, the business lacks innovative culture.
  • Low effectiveness means IT does not stay up to date with industry trends. Therefore, the identification of opportunities for competitive advantage and improved operational effectiveness and efficiency is lacking. Consider analyzing Info-Tech's Future of Casino-as-a-Platform or Make the Case for Room-as-a-Platform.

IT needs to view the importance of organizational design for a customer-centric digital operating model

This is an image of a green box containing the words ITRG01 IT Organization Design

Org. Design Classification:

Maintain Process

Low Importance. 8.48

High Effectiveness. 6.70

  • Digital transformation is considered an organizational redesign driver. Info-Tech suggests redesigning the reporting structure if new capabilities are needed. In this case, digital innovation and project management.
  • Organizational design enables a customer-centric digital operating model, which is needed to ensure the reporting structure is effective, aligns with the business and customer journey, and reduces workforce challenges.
  • Low importance means that there may be uncoordinated efforts for digital initiatives that will fail to address end-to-end customer journeys.

Being data-driven is a top priority for business executives

Business Executives' ranking of disruptive technology

This is an image of a table displaying Business Executives' ranking of disruptive technology

A data-driven mindset is considered a foundational requirement to enable innovation. Gaming and hospitality organizations are seeing the importance of big data collection and analysis for data-driven decision making. In the end, good data and analytical capabilities are needed for initiatives like hyper-personalization, AI/ML, and omnichannel. Ensure IT is effective in this area. For those experiencing low business satisfaction, consider if your organization has implemented the necessary big data technologies.

The ability to enable data-driven decision making relies on the evaluation of data and BI

IT must provide the business with reliable and accurate data

This is an image of a yellow box containing the words ITRG08 Data Quality

Data Quality Classification:

Evaluate PROCESS

Low Importance. 8.43

Low Effectiveness. 6.25

  • Data quality is the enabler of digital transformation. Accurate data is a requirement to make better and informed decisions, including decisions around digital strategy.
  • Additionally, digital technologies like AI and ML requires extensive amounts of good quality data to function. To be effective, IT must put the proper policies, processes, and capabilities in place to ensure that appropriate targets are set and achieved.

Provide end users with the self-sufficiency to analyze data

This is an image of a yellow box containing the words ITRG06 Business Intelligence and Reporting

BI & Reporting Classification:

Evaluate PROCESS

Low Importance. 8.43

Low Effectiveness. 6.23

  • BI and reporting is the result of digital transformation. Data-driven insights must be easily accessed by the business. Provide end users with self-sufficiency instead of forcing them to wait on IT to create these reports.
  • IT lacks the provision of exceptional BI and reporting capabilities for the business. To be effective, IT must develop people, process, and technology initiatives to enable the transformation of raw data into meaningful and useful information for decision making.

Workforce of the Future

SECTION 04

  • | ANNUAL BENCHMARKING REPORT

Gaming organizations must strive to learn and grow in diverse ways by enabling a distributed workforce, future-proofing practices, and building diverse teams.

Info-Tech resources

A digital workforce is necessary for any-size organizations

Formalized digital entity or role by G&H organization size

A bar graph is displayed showing the following dataset: Small	16%; Medium/Large	17%; Enterprise	70%

*Formalized Digital Entity / Role refers to a position, department, or spin-out entity that clearly lays out the objective of digitizing, digitalizing, or digitally transforming the business.

  • A formalized digital entity/role is common among enterprise organizations. Larger gaming and hospitality companies are ahead of the curve in this initiative. This is expected as formalizing digital is accelerating in larger companies of other industries as well.
  • Although a formalized digital entity/role is unconventional among small and medium organizations, digital does exist. Size of organization should not matter. Digital should be based on the current state of digital development on both a company and industry level.

Balance is key in a post-COVID-19 digital era

Insufficient IT resources, inadequate skills, dissatisfaction, and burnout are major pain points to look out for.

Five circle charts are shown, with the headings: IT Skill Effectiveness - 78.4%; It Staffing Effectiveness - 64.7%; Absence of it org. barriers - 73.0%; Process & Procedure effectiveness - 74.8%; Technology Effectiveness - 77.3%

G&H IT DEPARTMENT SENIORITY SPREAD

A bar graph showing the G&H department seniority spread for Senior Mgmt; Managers; and Front Line.

14.3
Average Years of IT experience

  • Low effectiveness should be further analyzed based on five key drivers: skills, staffing, absence of organizational barriers, processes and procedures, and technology. If IT processes are experiencing dissatisfaction from end users and the IT team, delve deeper into the pain points based on the drivers.
  • Ensure the optimal number of managers to avoid suffering a top- or bottom-heavy structure. You should always see more front-line staff than managers and more managers than senior managers. If this pattern is not reflected in your IT organization and your span of control ratio isn't in the 4:1 to 7:1 range, you're top-heavy.
  • Successful IT departments have employees with a range of experience. Each experience level brings different degrees of dynamism, stability, skills, and perspective to the mix. Be mindful of the number of staff with more than ten years of experience. When it comes to staff experience, a balanced blend of institutional veterans and those who've experienced a more diverse set of employers can offset the risk of aging skills, status quo thinking, and absence of innovation.

FTE count varies depending on size of org. and star rating

Two bar graphs are included, showing the FTE Count sorted by Size of Organization, and Hotel/Resort Star Rating respectively.

Although benchmarking FTE count is insightfully used to determine optimal staffing levels, each organization is unique, and outcomes can vary.

Where your team's time is spent just as important as FTE count and allocation. Consider where your staff spends their time when it comes to maintenance, administration, improvement, and people. People and resources and improvement are considered more productive areas to spend time.

G&H IT Allocation by Activity Type

Activity Type % of Time Activity Type % of Time
Maintenance 38.80% People & Resources 17.20%
Maintaining existing technology 25.40% Planning and strategy 7.80%
Maintaining existing IT process 13.40% Managing IT team 6.10%
Administration 28.60% Managing business stakeholders 3.30%
Email 11.10% Improvement 15.40%
Other administrative work 8.80% New technology initiatives 8.20%
Meetings 8.70% Improving IT processes 7.20%

G&H lacks resources, staffing, and effectiveness in Applications

Application effectiveness

Application effectiveness

applications staffing Distribution

Share of applications staffing levels compared to adjacent industries

An image of the Application Effectiveness PRM & Projects for Apps and Data & BI. A table showing the Applications Staffing Distribution, with the headings: Applications; G&H Staff; Adjacent Benchmark (%) Two Percentage Bar Graphs, for GHRC and Adjacent industries, showing the percentages for Strategy; Applications; and Infrastructure.
  • G&H commits a lot more staff to Infrastructure, which can be due to several reasons:
    • The environment cannot tolerate any critical infrastructure downtime whatsoever.
    • Gaming is a much more device-intensive industry.
    • The industry tends to focus on COTS/buy vs. build, thereby requiring fewer application staff.
    • Relies on vendors for application maintenance/enhancements, development, and support.
  • The future of digital is applications. Organizations should improve staff allocation in this area for the sake of effective client-facing technology and business applications. The objective is to enable new digital capabilities so that your operations will have the opportunity to demonstrate more IT value and business stakeholder credibility.

Resilient Operations

Section 05

  • | Annual benchmarking report

Future-proof gaming operations by planning for flexibility, minimizing loss from disruption, and mitigating new risks.

Info-Tech resources

Cloud still needs to gain speed in the industry

To what degree do you believe the organization needs to adopt the following disruptive technologies in the next 3-5 years? Score out of 10 Ranking
Big data analytics (customer analytics, CRM, BI) 590.00% 1
Big data collection (tools and systems for gathering customer and market data) 570.00% 2
Social media for customer engagement/client service 560.00% 3
Mobile application for customers 540.00% 4
Mobile access for employees 540.00% 4
Social media for customer acquisition/marketing 540.00% 4
Cloud for application functionality 520.00% 5
Cloud for agile infrastructure 5.1 6
Internal collaboration tools (social, video, content management for employees) 4.6 7
IoT product tracking (RFID for logistics and supply chain tracking) 3.6 8
IoT product ideas (smart monitoring built into existing offerings) 3.4 9

IT Application maintenance staffing levels

Two circle graphs are shown.  The first has 10.3% of the graph colored in blue, with the words G&H 10.3% in the center.  The second graph has 14.3% of the circle colored in yellow, with the words Adjacent 14.3% in the center.

  • Analyzing application maintenance staffing levels is a key indicator for cloud applications. FTE allocation to application maintenance is relatively lower when compared to adjacent markets. Although technical debt and legacy technologies may exist, the industry is relying on cloud-based apps for initiatives like contactless check-in and checkout, sports betting, and online casinos, which could illustrate its lower staff allocation.
  • Cloud for application functionality and agile infrastructure is not a disruptive technology that looks to be a priority for business executives, either because a cloud-driven mindset has already been established or because lack of cloud culture has become a limitation.

The industry has declined in IT security maturity since the pandemic

Two bar graphs are included, showing the Overall It Security Maturity for GHRC and Adjacent Industries, and the second showing a Deep Dive on IT Security Maturity for Security Culture, Vulnerability Management, Compliance Management, Event & Incident Management, Policy & Process Governance, Risk Analysis, Auditing.

While adjacent market firms are improving in IT security maturity, G&H organizations have declined. Because we're in a customer-facing, highly regulated business, customers put a lot of trust in the industry, especially online where you lack the face-to-face interaction. The need for compliance management, risk analysis, and auditing to be improved will be heightened as your business heads online, considering AML/KYC, fraud, and digital trust and identity are prevalent online risks.

Summary & Conclusions

Section 06

  • | Annual benchmarking report

This is an image of the Digital Enablement & Value hierarchy.

Summary and conclusions

Based on the results, gaming and hospitality IT departments are in an unsupportable position to bridge the digital transformation gap. IT must gain total digital ownership by educating the business departments to transform, improving the business executive perception of IT to innovate, and evaluating pressing processes to enable.

Digital Strategy
Evaluate

  • 81% overall business department satisfaction.
    • Marketing, Finance, Casino/Gaming Operations, and Audit & Compliance are below 80% satisfaction.
  • 68% of business executives see IT as firefighters/unstable, but 44% want improvement toward trusted operator/
  • G&H organizations' IT strategy and governance are ineffective, which is a key indicator for inconsistency in business-aligned digital strategies and objectives.

New Customer Frontiers
Improve

  • 5.7% increase in customer-facing technology satisfaction from 2020 (70.7%) to 2022 (74.7%).
  • Business does not view the delivery of optimal client-facing technology as important:
    • Client-Facing Technology – 7th in importance
    • Project Management – 11th in importance
    • Requirements Gathering – 13th in importance
  • Project Management and Requirements Gathering are considered ineffective IT processes.

Continuous Innovation
Improve

  • Business executives don't see IT's place in increasing revenue and penetrating new markets (4th and 5th in importance).
  • Business departments don't view IT innovation leadership as an important service (10th in importance).
  • IT's low importance and effectiveness toward data quality and analytics means they do not provide the business with reliable data and the self-sufficiency to analyze the data.

Workforce of the future
Evaluate

  • IT organizations suffer a top-heavy seniority structure.
  • 14.3 years as the average IT experience means there's a risk of aging skills, status quo thinking, and absence of innovation.
  • Organizations are effective in KLO operations and spend more time in infrastructure when the future of digital is applications.

Resilient Operations
Evaluate

  • G&H organizations' low application maintenance staffing levels illustrates the industry's pivot toward cloud-based platforms like PMS, sports betting, and iGaming.
  • G&H organizations have declined in security maturity from 51% pre-COVID-19 to 49% post-COVID-19.

IT must gain total digital ownership by:

  • #1 EDUCATING THE BUSINESS DEPARTMENTS TO TRANSFORM
  • #2 OBTAINING MANDATE FROM EXECUTIVES TO INNOVATE
  • #3 ENHANCING IT'S ABILITY TO EXECUTE

Research to bridge the gaps to digital

Digital strategy

New Customer Frontiers

Workforce of the future

Resilient Operations

Continuous Innovation

Bibliography

"2021 Commercial Gaming Revenue Shatters Industry Record, Reaches $53B." American Gaming Association, 5 Feb. 2022.
Caesars Entertainment, Inc. "Q2 2022 Earnings Call." AlphaSense, 2 Aug. 2022.
"Crypto Gambling Skyrockets – What Do the Infographics Show." Yahoo! Finance, 4 May 2022.
Jaffery, Bilal. "Connecting with Meaning." Deloitte, 24 June 2020.
MGM Resorts International. "Q2 2022 Earnings Call." AlphaSense, 2 Aug. 2022.
Mohegan Gaming & Entertainment. "Q3 2022 Earnings Call." AlphaSense, 11 Aug. 2022.
PENN Entertainment. "Penn National Gaming (PENN) Q2 2022 Earnings Call Transcript." AlphaSense, 4 Aug. 2022.
Rosen, Phil. "This metaverse casino raked in $7.5 million in last 3 months and accounts for a third of Decentraland's daily users." Business Insider, 4 Feb. 2022.
"Trading Statement." Rank Group PLC, 14 Oct. 2021.

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