Page Three

By Anne Chen  |  Posted 2002-09-23 Print this article Print

: Living Large"> Although most enterprises plan to keep a lid on IT budgets next year, a few are living a bit larger, actually increasing spending in hopes of preparing themselves for the long-awaited recovery.

At Harrahs Entertainment Inc., in Las Vegas, Tim Stanley, vice president of IT, chose to invest in new systems and other projects last year despite the economic downturn. This year, Stanley continued to spend by making improvements in existing systems, something he said will continue next year.

Harrahs, a $3.7 billion corporation, owns 26 gambling resort properties and has 42,000 employees. Last year, the company bucked the trend by posting a 6.9 percent sales gain, and Stanley said his IT budget has increased consistently over the last four years and will continue to do so.

"We have not tapered back our spending in terms of new IT investments or new development activities and will continue to increase our spending at a reasonably healthy clip year over year," Stanley said. "We continue to enhance our CRM system with emerging technologies that will allow us to grow our customer base. And, weve made significant purchases and invested energies in integration."

Unlike most organizations, Harrahs and its top management see now as the ideal time to invest in IT to stay ahead of the competition. The company, which has been recognized for its CRM system, in the second quarter of this year initiated an application integration and Web services initiative, purchasing Active Enterprise Suite middleware from TIBCO Software Inc., of Palo Alto, Calif.

Harrahs will use the technology to build out Web services, portals and customer-facing external services running on the Sun Microsystems Inc. Java 2 Enterprise Edition and IBM WebSphere platforms. The idea is to integrate new Web-based services such as hotel-booking applications with back-end systems such as CRM so that Harrahs could, for example, dynamically offer discount room rates to its best customers.

One thing that enables Stanley to invest so much money in new technologies is that he contracts for specialized staff from companies such as Resources Connection Inc., of Costa Mesa, Calif., to augment his IT staff. Stanley said that rather than employing IT managers with specific skills to manage his CRM deployment, for example, he negotiated with Resources Connection for talent to augment his 550-member IT staff.

But, while a few enterprises, such as Harrahs, are still investing freely in IT, buyers at organizations still under financial pressure say close scrutiny over spending continues. At Quaker, Tyler said executives are asking tougher questions about faster returns, reducing expenses and total cost of ownership. One reason Tyler said he decided to deploy a bandwidth optimization product from Peribit Networks Inc., of Santa Clara, Calif., this year was that he wanted to avoid having to go in front of his management team to ask for additional funds to purchase more bandwidth to support his global ERP system.

Tyler turned to Peribits caching and concentrating technologies, which look for and eliminate redundant requests for bandwidth. It was either deploy such a technology or increase the frame relay bandwidth he was buying from supplier AT&T Corp. in countries such as India.

Without the bandwidth optimization, Tyler estimated, the additional bandwidth to support the ERP deployment would have increased Quakers WAN costs by 25 percent overall and even doubled what he was already paying AT&T in some locales. With the bandwidth hes saved, Tyler said he is planning to move telecommunications off ISDN in some locations and deploy videoconferencing capabilities and VOIP technologies. Such deployments, he said, will allow his company to reap quick returns on its investments and get the most out of IT dollars during tight times.

"Were trying to be very cost-conscious," Tyler said. "Our plan for the next year or so is to really take our existing assets and push them harder to get more leverage out of them. Were really looking to do things that are closer to home and dont require major investments."

Senior Writer Anne Chen can be reached at

Related stories:
  • With IT Spending Studies, Estimates Run the Gamut
  • Easing the IT Budget Process

    As a senior writer for eWEEK Labs, Anne writes articles pertaining to IT professionals and the best practices for technology implementation. Anne covers the deployment issues and the business drivers related to technologies including databases, wireless, security and network operating systems. Anne joined eWeek in 1999 as a writer for eWeek's eBiz Strategies section before moving over to Labs in 2001. Prior to eWeek, she covered business and technology at the San Jose Mercury News and at the Contra Costa Times.

    Submit a Comment

    Loading Comments...
    Manage your Newsletters: Login   Register My Newsletters

    Rocket Fuel