Getting From 23 to One
Merging Systems after the Mergers
David A. Gordon, PMP
The Practicing IT Project Manager LLC
Case Study: The People Systems
Portfolio at MGM Resorts International
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The Time: 2006. After a decade of mergers and acquisitions, MGM
Resorts International was the second-largest gaming and hospitality
company in the world.
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The Place: 23 resorts located in Nevada, Michigan, Mississippi, New
Jersey, Illinois, and Macau
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The People: 70,000 employees vertically organized by resort
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The Challenges:
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23 islands of automation, with no standards
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Duplication of business functions, without common policies
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High operating costs
Key Points of this Case Study
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E Chaos, Unum: How we mapped the consolidation to a single suite of
applications
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How we used portfolio management as a framework for reducing
exposure to risk
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How we partnered with the Business(es) in getting to Shared Services
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What we learned along the way to Data Unity
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How we handled the disruptions associated with additional divestitures
and new construction
•
What we’d do differently (and do again)
Understanding the Business Strategy
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Construct new, world-class resorts leveraging strategic partnerships
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Develop a common brand without diluting the existing brands
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Shed underperforming assets
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Reduce operating cost of back-office functions and infrastructure
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Focus talent on customer-facing positions
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Improve talent development and retention
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Empower the employees and managers
Aligning to the Business Strategy
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Facilitate divestiture: Preserve ability of the smaller resorts to stand
alone
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Prepare for the future: Design the end state for the new resorts, and
retrofit the rest to the same standard
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Build on existing intellectual property
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Eliminate obsolete and unsupported technologies
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Standardize data models and business processes
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Facilitate business functions move to shared services
Supported Business Functions
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HR Operations
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Compensation Management
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Recruiting
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Learning and Development
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Benefits Administration
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Payroll and Timekeeping
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Compliance
Elements of the Portfolio
The People Systems portfolio included:
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IT solutions, using in-house applications
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Outsourced technical and administrative services, including SaaS
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Business operations support for surge activities
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Software and hardware maintenance
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Operating and support contract management
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Capital projects
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Staff for O&M and project execution
IT Systems in Merged Companies:
A Continuum
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Merged units retain “old ways”
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All embrace “new ways”
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Few common systems
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Few unique systems
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Faux duplicates
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One way – resistance is futile!
E Chaos, Unum: Getting to Borg
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Inventory all of the people systems in all business units
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Develop a portfolio matrix: business function by resort
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Identify “at risk” systems: obsolete, unsupported, unreliable
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Collaborate with the business to determine the end state for each
business function: shared services, consolidation, or as-is
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Define needed capabilities and select solutions for the end state
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Characterize each system in each resort as keep, update, or replace
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Prioritize, based on risks and opportunities
Getting Stakeholder Buy-In
Stakeholders for the portfolio included a variety of groups and interests:
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HR Operations, Recruiting, Learning and Development
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Payroll and Finance
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The IT Department PMO, CTO / Operations, and executive team
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Business Operations in each resort
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Purchasing
All of these groups lent people, time, and influence to achieve our goals.
We spent a lot of time with the leadership and their teams, keeping them
informed and getting their feedback. Any success we had came from
staying in their good graces.
Assembling the Team
The portfolio would require a mix of activities and talents, from operations
management and software maintenance to business analysis and project
management. Over a period of months, we hired or “adopted” the best
talent we could find:
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Program manager for the HR system standardization and timekeeping
system replacement
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Three project managers for capital investment and maintenance projects
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Two business analysts
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A software development manager and on-shore / offshore development
capabilities
Capital Investment & Cost Reduction
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Business cases for the portfolio were driven by reducing operating costs
while improving service to the employees and managers
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Capital investments spread over several years, leveraging current staff
and new hires
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Minimize use of outside talent to areas where specific product
knowledge was required
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Justify future capital investment based on success in reducing operating
costs
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“Maintain with one hand, build with the other”
Portfolio-level Risk Management
A portfolio-level risk assessment provides justification for investment and
facilitates long-range planning. Investment priorities should driven by risk
responses
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Avoid: Replace unreliable or unsupported solutions before they fail
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Transfer: Outsource solutions with compliance risk to specialists
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Mitigate: Move data from spreadsheets to database solutions
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Accept: Make conscious choices
The portfolio matrix allowed us to make trade-offs and communicate them
to the stakeholders. As we got their input, the quality of our risk
assessments improved.
Moving from Plan to Procurement
Based on risks and opportunities, we developed a multi-year plan. Now,
we had to go shopping:
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Partnered with the Purchasing department to manage the process
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RFP where there were multiple qualified vendors
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Sole source where we already owned part of the solution
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After each vendor selection, update the capital spending plan and reassess the business case
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Identify success metrics and KPI’s, and communicate them to the vendor
and the business
Getting to Data Unity
We started from what can only be described as chaos:
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No two HR systems with the same action codes or business processes
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Multiple vendors for similar solutions, multiple unsupported products
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23 different job descriptions for a guest room attendant
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Multiple employees assigned the same employee ID
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Data records in the system long after the purge date
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Hundreds of custom reports, applications, and interfaces
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Critical compensation data maintained in spreadsheets(!)
Driving Data Rationalization Priorities
Much of the data in the HR portfolio is subject to compliance with state
and federal law. Other components were subject to compliance with
gaming commission regulations.
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First priority: Re-badge those “sharing” an employee ID
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Second priority: Ensure all records for those with an interrupted history
are traceable to the employee under their current identity
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After that: Standardize definitions, classifications, and action codes
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Finally: Purge old records, and schedule annual purges of records that
have reached the end of their retention period
Getting to Shared Services
One of our key strategic goals was getting to a single payroll department,
serving all U.S. employees
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Merged the HR Systems to a single product on one server
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Standardized data definitions and purged old records
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Replaced multiple unsupported timekeeping solutions with one modern
solution, using modern time clocks
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Business acquired office space large enough to put the consolidated staff
under one roof
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Transitioned customer-facing responsibilities to a single team
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Co-located the program manager with Payroll for several months
A Disturbance in the Force
In March, 2009, MGM Resorts sold the Treasure Island resort. This proved
to be a year-long distraction:
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The contract required that we stand up systems to replace the enterprise
systems we had just installed, as the resort would be run as an
independent property
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One of our largest data centers was housed in the basement, with servers
for a number of enterprise solutions
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Virtually every member of the IT department was involved in some
aspect of the divestiture, in some cases full-time for months at a time. For
a time, every other project ground to a halt, and every capital project was
re-examined
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We got through it by constant internal and stakeholder communication,
adjustments to project schedules, and good vendor relationships
Opening City Center
City Center began a phased opening in December, 2009. At the time, it was
the single most expensive privately funded construction project in the
western hemisphere, and employed 10,000 people. Our people solutions:
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Managed over 100,000 applications from job seekers all over the world
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Recruited new employees, rehires, and transfers, and replacements for
those employees who transferred
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On-boarded 8,000 employees in six weeks
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Paid everyone correctly, with the right benefits and deductions, correct
taxes withheld, and deposits to the right accounts
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Managed the right-sizing of the ten properties in Las Vegas
What We’d Do Differently
We made a lot of decisions in the course of four years, in the presence of
uncertainty and a crumbling economy. Some of them were less than
optimal. Things we’d do differently:
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Pilot solutions in one business unit, with input from the rest of the
practitioners. Once the pilot is proven, then roll it out to everyone
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Purge old records, and then rationalize the remainder to the new
standards
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Avoid weighting license discounts (capital budget) over support fees
(operating budget) in procurement decisions
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Budget for additional “utility players,” so that we have the staff to
handle the next merger, divestiture, or opening
Things We Did Wisely
Some of our decisions have stood the test of time. The following principles
stood us in good stead:
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Prioritize spending based on risk, as well as ROI
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Maintain usable solutions to get a few more years of life from them
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Set a sustainable pace, for both the spending and the people
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Be willing to pick the fruit that’s ripe, rather than just low-hanging
Thanks for your kind attention!
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