The Implication of EPOS Systems

The Implication of epic SystemsWilliam hill is a major book sop upr worldwide, with only both over s causay years experience in offering fast services. It is currently one of the leading looseness companies in the UK, where it operates over 1600 forebode stocks, serves over 800,000 encounterting slips apiece day via phone (standard and mobile), and recently began Britains first interactive digital television lead devoted all in all to playing menstruum (Lee 2004). It is the countrys around successful earns fun confederacy in a country where over four million people bet in on production line sport rooms every month (Thomas 2004). William cumulus was the first major gambling formation to offer online sporty, opening its website in 1996 (Lee 2004).The William hillock culture pairs low-cost, low-risk vehemence in businessdecision making with a volitioningness to be sophisticated, curiously inregards to manipulation of technology (Hargrave 2004)). This makes it all theto a greater extent surprising that the arrangement has waited so long to follow outelectronic doom of bargain ( heroic poem) machines in its betting lead astrays. spellthese atomic number 18 expected to make the high society to a greater extent(prenominal) than advantageable, efficient, andcompetitive, the implications of these machine span across the governance. Of specific interest is the military unit of the formation on thepeople involved, traditionalisticly an important part of William hillockssuccess. This study seeks to consider the possible benefits and freeinges to William Hill from the slaying of the heroic poem system. ternary specific argonas of attachment atomic number 18 the effect of the machines oncorporate and local patronize culture, whether the EPOS system volition summation efficiency, and whether the system will get to increase competitiveness.The objectives of this study are to critically examine the introductionof an electro nic point of sale system as implemented at William Hill.Specifically, this study aims to examine the strategic considerationsof the EPOS and how its strong point usher out be optimised. The studybegins with a review of literature and research available about WilliamHill, the firms operations, and EPOS systems in general. ThisLiterature Review serves as a instalation for understanding analysis ofthe rest of this work.Following the Literature Review, of first consideration will be theeffect of EPOS on the corporate and local culture of William Hill.Will EPOS produce or detract from affirmative aspects of current culture?Will the increase in customer learning and the ease of its analysis make water new customer groups into traditional betting knock offs? If so, whatwill be the effect of this on the shops and their regulars? How willstaff react to the changes caused by the EPOS system? Will EPOS changehow customers and staff interact? How does the introduction of EPOScompare to t he effect of technological advances on workers in general? The second objective is consideration of the efficiency of the EPOSsystem. It will be compared to the traditional manual betting systemit replaced, with analysis of improvements in or negative cause ontime and cost. Has William Hill become much efficient, and moreimportantly more effective, with the introduction of EPOS? It is abetter organisation as the result of automation? Finally, the study seeks to project the effects of EPOS on WilliamHills competitiveness. Will the system encourage customers to switchto William Hill? Can the organisations market place share be expected toincrease? What are the boilersuit results on a holistic, corporate levelof automation, and how depose the firm best implement much(prenominal) technologywithout undermining its established strengths? What is the or sostrategic counselling the system can be implemented, and how can it closelygreatly benefit the organisation as a whole?This s tudy seeks to address these questions through the study ofinformation and data provided by William Hill and in literatureavailable about the firm, interchangeable gambling companies, and electronicpoint of sale systems in general.It is anticipated that the EPOS system will be found to increaseefficiency and competitiveness for William Hill, albeit at well-nigh changeto and possible loss of culture. This is anticipated to be an overallpositive innovation, however, increase profit across several gamingplatforms, allowing for improved marketing activities, and increasingmarket share for the social club. The system is anticipated to provide afaster, more accurate, and more secure way of processing bets, inaddition to generating data relevant for market analysis.Many articles about William Hill, including the companys ownpublications, describe the organisation as an innovator (William Hill2005). This is certainly the case, and low-cost, low-risk strategyhasnt kept the firm from pursu ing technological advances and marketexpansion in many areas, the most recent organism the installation of anEPOS system in its betting shops. The company currently provides fourvehicles for gambling traditional betting shops, phones-basedbetting, including via mobile phones, Internet gaming, and interactivedigital television. Plans to expand into casino gambling energise beentemporarily shelved, as the Gambling vizor under consideration by thegovernment straight appears less likely to benefit gaming organisations whoexpand into casinos (WH Annual fib 2005). All of these may beeffected and maybe benefit from the introduction of EPOS machines.EPOS can support all four major betting vehicles, and enhance how theycan work toget her to increase the number of customers, repeatcustomers, and customers spend.Traditional betting shops, excessively called sell shops, stay on thebackbone of William Hills operations. The retail division contributed166m of the pounds 232m, or almost se venty-two percent, of the totalprofits brought in by the organisation in 2004 (WH Annual Report2004). The shops also provide a credibility and recognisable brandseen as contributing to the success of other gaming vehicles (Thomas2004). The retail shops are the location of the EPOS machines, and arelikely to be most effected operationally and culturally by theirimplementation. Demographically, the customers of William Hillsbetting shops tend to be older than customers using other bettingvehicles (Hargrave 2004). It has been observed that shop customers arealso predominantly male. Internet gamblers are demographically younger, and many remove neverentered a retail betting shop (Hargrave 2004). They often participatein a manakin of online games in addition to traditional odds betting.They are likely to hop from site to site, and show tiny loyalty toany one gaming organisation (Thomas 2004). Online gambling firms musttherefore work harder to differentiate their site from the many ot hersavailable. As over time a natural consolidation of the market islikely to go along, those organisations that can reinforce their marketpositioning are more likely to succeed (Thomas 2004). William Hill hasthis positioning as a sector leader with multiple gambling vehicles.This positioning will be enhanced by the EPOS system, a way to linktraditional shops with their credibility and market presence, to thefirms online offerings. The whatsis of EPOS and the organisations electronic vouchersystem could encourage online gamblers to consolidate their gamingactivity with William Hill. The EPOS support William Hillsintegration of their online business and local shops, with onlinecustomers now able to deposit money into or draw from accounts at anyWilliam Hill shop. The voucher system allows customers to depositmoney or withdraw winning from any William Hill shop. This wasoriginally handled over the counter however, the new EPOS system nowallows the ideal system to be handled by mach ine (Anon 2003).This has the voltage to increase both shop-based and onlinebusiness. For example, a thirty-something life story woman might behesitant to frequent one of William Hills betting shops, perceivingthem to be historically male-dominated, older, and perhaps evenworking-class. However, she is on her way to do some shopping, anddecides to quickly draw off her recent online winnings. She stops in abetting shop, and has a positive experience. It is clean, well run,with professional, courteous staff. She can draw on her winningseasily using the EPOS terminal. Because the woman has a favourableexperience with the increase and people in her transaction, she is materially more likely to use the EPOS terminal again, and to stopin the betting shop. William Hill has possibly converted an onlinecustomer to an online and shop customer. Similarly, some shop regulars may eschew credit cards. Online gamingis therefore unavailable to them. EPOS in combination with WilliamHills combined online and shop accounts allow these customers todeposit cash at their local betting shop, and use those funds foronline bets. This has the potential to further increase the firmsonline customer base. Internet customers may be further intrigued bygaming options offered online that go beyond their options via shops orthe phone. Using the Internet to place traditional bets, for example,increases the chance these customers will try arcade or casino gamesavailable online, thereby increasing the types of product purchased(Anon 2003). This expands the purchase mix for William Hill, andincreases the likelihood of larger total purchases per customer.A allude for management should be the potential of one gaming vehiclesuch as the Internet to draw customers away from the firms othervehicles, in effect cannibalising its own operations one for theother. William Hills most recent Annual Report acknowledges thisissue (2004). The company has analysed profit and other financialdata, and is confide nt that no cannibalising is taking place. Allthree gaming vehicles in operation for the year have shown carry out in the mouth toimpressive growth, with no indication of one taking customers at thedetriment to the others (WH Annual Report 2004).Phone betting, including mobile betting via WAP technology, is seen bymany as the gaming vehicle of the future (Hargrave 2004). The EPOSsystem could contribute to the expansion of phone betting by making iteasier to draw on winnings and deposit funds for future bets. The OffTrack Betting organisation in New York City, USA, found lines andcustomer wait time reduced by up to forty percent at some outlets withthe implementation of sundry(a) betting and point of sale machines (OTB2003). The system can similarly support William Hills newest venture,interactive television. There are questions whether the firms brandis strong enough to support a television channel, although thepotentials for increased revenue are significant (Hargrave 2004). Theo rganisation does non intend to broadcast many sporting or otherbet-producing events, given the prohibitive cost of doing so. Rather,the television channel will offer number generated betting options, aswell as gambling games similar to those offered by the firm on itswebsite (Hargrave 2004). This allows the non-computer literate toparticipate in betting outside of traditional shops. Their anonymityand entranceway to gambling increase, both of which have been cerebrate toincreased consumer spend (Anon 2003). Non-computer literate gamblersare no longish bound by the restricted hours of the betting shop, andcan play a variety of gambling games through their televisions(Hargrave 2004). The EPOS s ystem supports this gaming vehicle in thatthese customers must have some way to deposit money for their gamblingactivities and withdraw any winnings they may have. The EPOS systemallows them to do this conveniently and with the same discretionafforded to them by interactive television or th e Internet gamblingvehicles. mavin potentially negative effect of the EPOS system is simplification ofcustomer loyalty. Loyalty occurs when a consumer experiences goodproduct at a reasonable price and convenience, with acceptableservice. If these expectations are met, the customer is likely torepeat the shopping experience. Over time, the customer forms a habitof this shopping experience, which thusly develops into an location ofloyalty (Duffy 1998). One component of loyalty development is staff,and in particular customers interaction with staff. The peoplerepre displaceing an organisation and the service they provide can make orbreak a customers purchasing experience (Garavan 1997). The EPOSsystem will replace some functions currently performed by people, whichmay have a negative impact on both customers and reposeing staff.Repeat customers make up a significant portion of retail bets in thegaming sector, and many have established some form of relationship withretail staff. The se relationships contribute to the loyalty or habitsof customers, causing them to frequent one gaming retailer, and therebyincreasing the customer spend at that shop (Anon 2003). This customersegment may feel overlooked with the replacement of some stafffunctions by machines. For example, a man regularly frequents hislocal William Hill betting shop, gambling regularly as a hobby, but notto the gambling addiction level of play. His visits to William Hillmay be for him the same as another persons frequenting a neighbourhoodpub in this case he has the opportunity to interact with others whoshare his interest. The super acid denominator in such social interactionwill often be the shopkeeper or retail staff ( gamble and Gamble 2005).If this social interaction is lost, the customer may switch to asimilar s hop operated by another organisation where such interactionis supported. Fortunately for William Hill, the other major bookmakerswith whom it competes have already implemented EPOS sys tems, makingthis customer loss less likely to occur (Hargrave 2004).The EPOS removes the feeling of being disloyal to shop staff by bettingonline instead of at their establishment, which could also potentiallycontribute to lost customers. Customers who shop at one establishmentfor a long terminus of time may feel guilty or embarrassed when changingto another store. They may try to void contact with staff from theirprevious shopping preference if they have been trying out other storesfor a period of time (Gamble and Gamble 2005). With the reduction ininteraction between William Hill staff and customers caused by the EPOSsystem, the customers may no longer have social need to continue to betexclusively or predominantly with William Hill.Another possible loss is to the William Hill culture, particularly thatof local shops. Steve Smethurst quotes David Russell, William Hillsgroup HR director, as acknowledging, Once we have that in place theEPOS system, the requirements on shop manage rs to get back bets will begone that challenges the very core of what people have been doing foryears (2004, 36). For one thing, the introduction of the machinesreduces the number of staff need at each shop. The company has nostated plans for layoffs, but also has not addressed the impact EPOSwill have on staff (WH Annual Report 2004). This may be in part to thetraditionally high turnover in some segments of the gaming business,although more prevalent in the telephonist position that in retail shopstaff (Smethurst 2004).Management of gaming organisations need to examine the importance ofpeople in their product differentiation. Consideration is called forin examining the fact that all the major betting shops now utiliseelectronic point of sale technology, and much of this is produced bythe same company, Alphameric Red Onion (William Hill PLC 2004). If onecan access the same machines at any shop, and each has similar bettingoptions, what would cause the customer to frequent one sho p overanother? While some online gaming organisations seek to an image ofglamour and escape to paradise after a long day at work, this type ofpositioning is more effective for the casino venturing into onlinegaming than the traditional betting shop down the street (Thomas2004). Re-branding a company as old and established as William Hillwould be difficult, expensive, and unlikely to be effective. Nor is it possible for any one gaming establishment to differential itsproduct on price in the long-term. The EPOS system will produce costsavings compared to the former manual bet-taking and managementinformation systems (WH Annual Report 2004). This cost savings occursfrom reduction in staff needed to operate a betting shop, more speedyprocessing of bets, and standardisation of bet cloture by removingthe local human component. The EPOS system also replaces manual inputinto management information systems, allowing increased communicationbetween shops and the corporate offices, and increas ing the companysability to respond to betting fluctuations (William Hill PLC 2004).The firm did incur additional capital investiture expense during 2004due to the purchase of the EPOS system, but the Annual Report indicatesthis is a negligible amount and will be easily amortised. Cost benefits, resulting in increased profits and more competitiveprice structures, in combination with lack of product differentiationin the gaming sector, can be expected to result in increased marketshare for William Hill. This increase should occur across all four ofits gaming platforms, although primarily in Internet, mobile andtelevision sales, as lack of differentiation causes sector-wideconsolidation and the elimination or absorption of little firms byindustry leaders (Thomas 2004). Some market advantage certainly goes to the organisations with the most(and most convenient) locations. William Hill CEO David Hardingstresses the importance of place in the firms differentiation efforts,contending br anding and convenience are the most important factors ingaming choice. People always underestimate the guiding principle ofbetting, and thats to make it convenient, he states, branding willalways remain dominant, and as long as you make it easy to gamble,people will do so (Hargrave 2004, P20). Along this line of thinking,over time the sector power of larger organisations with theirestablished shop sites will cause market consolidation, squeezing outsmaller firms (Thomas 2004). This then further enhances theconvenience of the shops of large-sector players. Organisations thatcan integrate their various services, as described above in theinteraction between internet gamblers, William Hillrquote s voucher system, and EPOS machines in the local retail shops, also have an advantage in the convenience department. However, loss of personal touch is something William Hill should beseriously considering. Atomisation historically causes loss of jobs,and William Hill employs more than 10,000 pe ople 8,500 in shops,1,000 in call centres, and 1,000 in support (Smethurst 2004, 36).People, particularly retail staff, play a major role in product andorganisation differentiation within a service-based firm such asWilliam Hill. This is particularly relevant as the company pridesitself for its rigorous hiring practices and top-notch staff. WilliamHill undertook a complicated pre-hiring screening process to help thecompany control it was bringing in workers with the best possible jobfit (Smethurst 2004). For example, the human resources department atWilliam Hill identified the motivational factors that make someonegood at a job, then formulated a profile of the ideal front-line staffperson (Smethurst 2004, 36). This profile was used to c reate anautomated telephone screening process that was used with all initialapplicants to the retail shops. The company then sends potentialrecruits through interviews and role-play exercises in the lead making a joboffer (Smethurst 2004). All the se evaluate the situation as well as theskills of potential employees. Smethurst quotes Russell as saying,you can add skills to people, but if they had the wrong attitude inthe first place then its not passing game to work (2004, 36). HopefullyWilliam Hill management has considered the possible impact on staff andtheir attitudes in their implementation of EPOS machines.Human Resources Consultant Richard Samson of the EraNova Instituterecently presented his theory of out-peopling (Frauenheim 2001). Justas jobs can be off-shored from one country to another, so jobs can beout-peopled, going from work performed by people to work performed bymachines. While this can offer short-term advantage, Samson arguesthat similar potential losses are likely in the long-term. Most ofthe work tasks done now by people will be done by smart technologywithin twenty to thirty years (Frauenheim 2001). speculate loss causesanger and resentment amongst those put out of an organisation, andoften-sympathe tic bad attitudes with workers who remain. This shouldbe of particular relevance for a firm so concerned about workerattitude that they developed a complex and expensive screening processto ensure proper attitude amongst new hires. Remaining employees alsobecome even more key to the generation and maintenance of customerloyalty, as the fewer employees with whom an several(prenominal) customerinteracts, the more important the quality of interaction with theemployee becomes (Garavan 1997).Reduction in employees in proportion to machines can also go thepublics perceptions of the organisation. William Hill is a companythat promotes service as part of its corporate image. This serviceinfers a level of caring amongst those at the company for theircustomer (Company Website 2005). If the customer begins to viewWilliam Hill shops as simply a place lined with electronic kiosks, muchlike the gambling version of the local Laundromat, this image of caringservice is no longer projected. This ca n contribute to customerloyalty and repeat purchase over the long-term. Management must find away to maintain its positive corporate image, therefore, while going earlier with its atomisation and cost-saving plans.Loss of jobs also creates macroeconomic impacts for both the sector andthe country. This has historically been evidenced across manysectors. In agriculture, for instance, small farms that once requiredan full(a) family to run have been swallowed up and consolidated withlarge commercial ventures that employ many machines and few people(Gottheil 1999). Economic impacts of rapid changes in job availabilityand employment can destabilise an entire economy. If unemploymentsoars and discretionary income plummets, William Hill and other gamingorganisations will likely see a sharp drop in profits, as they are adiscretionary spend for most consumers (Gottheil 1999). More machines also lead to the increased likelihood of gamblingabuse. The University of Sydney, Australia, undertook a significantstudy of the effect of gambling machines, atmospheric state machines, and EPOSsystems on gambling abuse and addiction (Blaszczynski, Sharpe andWalker 2001). They found customers were more likely to abuse gamblingor display addictive conduct when gaming places were primarilymachine-serviced. The more people involved in gaming transactions, theless likely addictive behavior was evidenced, unless such behaviourwas encouraged by the staff involved (Blaszczynski, Sharpe and Walker2001). They additionally found limiting the combination of machines,such as removing ATM machines from shops where EPOS and similar wereavailable reduced addictive behaviours.Also, while gambling addicts are often profitable in the short-term togaming establishments, too many people suffering from this malady hastraditionally led to public outcry, tightening of gaming regulation,and increased taxes on winnings (Blaszczynski, Sharpe and Walker2001). It is in the best interests of all involved, ther efore, forgaming organisations to strive to increase customers gambling spendingwithout crossover voter the line into gambling addiction. The University ofSydney study showed that slowing the timing on machines, for example,reduced the likelihood of display of addictive behaviour Blaszczynski,Sharpe and Walker 2001. Research and findings such as this should bestrongly evaluated by William Hill management to ensure the optimum useof gaming machines in its shops.Still, not withstanding possible detractions to the organisation, theEPOS system offers many potential benefits to the William Hill firm.Electronic point of sale technology will enable the bookmaker to take,settle and pay bets electronically, record information from suchtransactions in a primeval software system, display and distributetargeted betting opportunities and manage estate-wide risk (WilliamHill PLC 2004). Of these benefits, the two most intriguing from acorporate standpoint are the ability to gather data and profi lecustomers, and the resulting use of such data in creating targeted andevent-specific marketing.The EPOS system also allows for extensive capture of customerinformation. Data generated from customer input can include the numberand frequency of bets, the type of events bet upon, the average amountof each bet, and much more. This allows the firms management tocreate customer profiles, representing current and target consumergroups. (Woodruff and Gardial 1996). For example, a middle-agedcustomer bets on traverse races every other Friday. He distinctively bets onthe favourites, in the total spend range of pounds forty to sixty, witha typical mix of eight to twelve bets of three to five pounds each.Since he frequents William Hill, the company can assume some level ofretail brand or local shop loyalty. The firm would like to see thecustomer bet more often, and in greater amount. Because they havecollected this data on the customer through the EPOS system, they cansend him direct, target ed advertisements for dog races, and bettingwithin his favoured range. If they can attract him to place a betoutside his pattern, they have potentially increased his regular spendin addition to this one betting event (Smethurst 2004). Data gathered from the EPOS system can also be used to create customerprofiles, which can then be targeted for marketing and event-specificadvertising. William Hill noticed from similar data gathered on itswebsite that many were registering but not betting. They hired aprivate firm to assist them in converting this web traffic into betting(Lee 2004). The firm dual-lane website registrants into four randomgroups. One group was sent nothing, one was sent a service-led followup email, one was sent an offer-let follow up email, and one received areminder email that they had yet to place a bet. The company was ableto testify that service- and offer-led email follow up increasedthe number of registrants who became bettors by more than five percent(Lee 2004 ). If an experiment such as this can have such positiveresults with random groups, imagine the impact of targeted emails andadvertising on William Hills customer base.Another benefit to the company is that electronic point-of-saletechnology will increase the efficiency of William Hills bettingoperations. Prior to the EPOS system, all bets were placed andrecorded manually in betting shops. In an oversimplified explanationof the manual process, a customer would place a bet by natural endowment a writtenticket to a retail shop staff member, who would give them a receipt inreturn. The customers bet would be recorded in the shop, and if theywere entitled to winnings, these would be settled by the shop manageror designated staff person. The organisation had various managementinformation systems into which data from individual shops was recorded,and this was forwarded to the central offices on a regular basis(Caldecote 2004). Issues for management with the manual system include both the a ccuracyand breaker point of reporting. For example, under scrutiny regarding theannual amount of unclaimed returns at William Hill, David Hood claimedthe company was uneffective to quantify annual unclaimed returns because thepre-EPOS reporting system did not record or allow for such (Caldecote2004). This type of information is vital to managements analysis ofthe overall health of the organisation, in addition to profit and losscalculations. The detail of information provided by the EPOS systemwill easily rectify these reporting difficulties. The electronicsystem will also save time, allowing data from each shop to be capturedalmost instantly (William Hill PLC 2004). This enables the company tocalculate statistics and perform analysis on events as they occur, forexample. In a time-sensitive business such as gambling, this can be ofgreat advantage.Another benefit is that the EPOS system potentially allows William Hillto expand business hours at reduced cost. As it reduces the need forstaff, betting shops can remain open longer for the same staff costs.Longer hours give customers more opportunity to bet, increasing thelikelihood of more customers betting because of the enhancement inconvenience, and increasing the amount customers are likely to bet, asthey are in the betting shop for a longer period of time. Morecustomers and more spend mean more profit, and potentially more marketshare, all of which are naturally favourable to management (Woodruffand Gardial 1996). Increased efficiency typically leads to increased competitiveness,provided the firm is being efficient about the right activities.William Hill was a bit behind its competitors, being the last major UKbookmaker to implement an EPOS system. It faces one primary competitorin the broader sector, Ladbrokes, and a slew of smaller competitors,primarily in the online market (Thomas 2004). While many of thesesmaller competitors are striving for differentiation along a variety oflines, William Hill holds to its position that its company branding andstatus will carry it through against such firms. It has the advantageover Ladbrokes of being in the online gambling arena longer, and hasstepped forrad of them in its entry into television. Ladbrokes has alarger number of traditional shops, however, which must be factored ingiven William Hills emphasis on the importance of convenience andplace in its loyalty strategies (Thomas 2004, Hargrave 2004). Ladbrokes also has employed EPOS for a longer time, and has thereforeincreased the integration of the machines and the data they generateinto its overall business and marketing strategies (Hargrave 2004).The two have similar brand recognition, and are viewed as primecompetitors. Given Ladbrokes already uses an EPOS system, it is morelikely that increased market share for William Hill will come from theelimination or absorption of smaller competitors, rather thansignificant customer win from Ladbrokes. Findings of the analysis of available litera ture concerning WilliamHill, EPOS systems, and potential benefits and losses are generallyfavourable for the EPOS system. The potential drawbacks of the EPOSsystem include lessened customer loyalty and damage to the corporateimage of a service-oriented firm. Staff attitude and feeling of valuealso have the potential to suffer from automation. The system fits inbroad corporate culture of a firm innovative in its use of technology,but may have a negative impact on employees and could potentiallychange local shop culture. This is particularly important if jobs willbe lost or phased out due to the introduction of the EPOS machines,although the company has not indicated this will be the case. Theorganisation must finally be cognisant during both implementation andcontinued operation of the potential for gambling abuse and addictionusing EPOS and other automated gambling devices, and make an effort toprovide a safe, controlled betting environment.The anticipated benefits of the system, ho wever, outweigh potentialdrawbacks. First, the EPOS system will increase efficiency in how betsare taken, settled, and paid, both increasing security in bettingtransactions and making each transaction faster and less expensive.This provides the firm with the potential to forward such savings tothe consumer, increasing the companys ability to meet or beatcompetitors on price issues. Whether or not any cost savings are passed along to the consumer, thesystem also makes William Hill more competitive in a number of otherways. In combination with the voucher system already in place, theEPOS system greatly increases the convenience afforded to the customerin placing and settling bets, and withdrawing winnings. This increasedconvenience is anticipated to result in new customers, particularlythose drawn from other