The five-minute CIO: Keith O’Loughlin

8 Mar 2013

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Keith O'Loughlin, CEO of Boylesports Online

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Boylesports Online’s CEO Keith O’Loughlin knows his IT will stay the course, thanks to a smart punt on virtualisation. On the eve of the Cheltenham Festival, he explains why it’s horses for courses when it comes to picking a winner to provide the right technology to the business.

What are the key elements of Boylesports’ technology strategy?

The ethos of our technology strategy is primarily to support our customer experience, which in turns supports our business. To do that, it’s about being able to deliver a vast array of products in a seamless way.

Our technology strategy is an investment in our customer experience. Our customers don’t care how many servers we have, what data centres we have, or how much bandwidth we have.

Can you outline what are the main elements of your IT infrastructure?

On the hardware side, we’ve moved to a Cisco-EMC-VMware stack at the heart of everything we do. That’s allowed us to virtualise a lot of our technologies which allows us to really scale very quickly as our business grows.

On the software side, we’ve got a core sports betting platform which runs on an Oracle database and then we have probably, at this stage, 60 different systems integrated with that – from casinos to different games, to payment gateways to security systems, to streaming live races, to news feeds. It’s an inordinately complex infrastructure. Our job is to put all those pieces together in a way that looks simple for the customer.

The Cheltenham Festival is coming up and that’s always a busy time for bookmakers. Was there a time when a major event like that would have meant panic stations for your IT team?

I don’t think panic stations would be fair, but it’s like a big torch that just shines across your IT. Any gaps across your IT or business, even if they’re tiny, become huge.

It’s quite incredible the stampede of customers you get during a festival like this. It’s phenomenal from a business point of view, and you want to think you’ve done all the work coming up, so you’re thinking: ‘how to make a margin’ rather than, ‘will all my systems hold up?’

How do you gear up to handle seasonal spikes like that?

We like to leave 200pc headroom over the maximum of what our projected busiest spike is going to be. We’ve engineered our IT so we can scale up. That’s through virtualisation, but it encompasses everything: we add a lot more bandwidth, we put all our partners on notice for the three weeks coming up to it so every configuration is checked so whatever needs to be done, gets done in advance. Everything where there is a variable volume usage, we make sure there is capacity.

You’ve said before that you used to operate your IT in the traditional way; what made you change, and what difference has it made?

With the growth projects that we’ve had and the growth that we’ve seen, it wouldn’t have been possible, literally, to keep with the hardware in a traditional way.

Plus, we knew there was an inherent weakness. We said, let’s go and fix the core because that’s going to allow us to grow and scale. We could see a point where everything would fall over. It’s very important from our customers’ point of view. We have to treat them best at these times, or we won’t have them.

As well as putting in a whole new infrastructure, we completely re-engineered our web front end, and we shaved 70-80pc of the load time off the pages. We gave customers a better experience: we went from having a slow enough site to being as fast, or faster, than anybody in the industry.

In our case, we’ve been very astute with all of our technology – most of our technology has paid for itself in months rather than years – taking out old equipment and replacing it with hardware that’s costing less in maintenance and in power to run it.

How much of that was planning and how much was through the natural advances that happen in technology anyway?

The timing was certainly very good, but I know from when we look at the business, we try to make all of our projects pay for themselves, no matter what. We’re not in the technology business; we’re in the betting and entertainment and gaming business. It’s up to us to find the way to do it, we have invested a lot of money in our technology over the years.

There comes a point in the life of the business to stop working for our technology, and make the technology work for us. Effectively, we created our own budget. It’s a privately owned business … we’ve got to make our own way.

How do you mean you create your own budget?

We take all our maintenance agreements on our hardware and the cost of power, we’d actually have payback on all of our hardware within six months, so cash is never a problem. You’re saving money within the financial year.

How do you measure the success of the change?

There’s only one metric – it’s called profit … The way customers say they’re happy is with their wallets.

Would you say technology is a source of competitive advantage in your business?

Absolutely, but it shouldn’t be. Electricity isn’t a source of competitive advantage. Technology should just be a utility. Fortunately for us, and unfortunately for some facets of the industry, it is still a source of competitive advantage.

I think that comes from people, more than technology. Technology isn’t the end; it’s the means to an end. You have to make sure you’ve enough technology for getting from A to B: no more because it’s wasteful, no less because it short changes the customer. That’s where a lot of businesses and people – CIOs, CTOs CEOs – can make the mistake of becoming in love with the technology rather than what the technology can do.

Last year during Cheltenham and the Grand National, we were one of the only bookmakers that didn’t have an outage because we had made the investment in the early part of the year. It’s a good illustration – some of our competitors were down for two hours and we’d naturally see an increase in customers at that point.  

I do know it’s not easy to try and untangle when you’ve got a complex infrastructure. Over the last number of years I think there’s been a tipping point that if you’re smart about your technology investments, they can pay for themselves – but we all know IT projects that haven’t necessarily delivered in the past.

Many companies think, ‘we have what we have, let’s keep what we have’ is a strategy, but with the speed of technology it’s not a sustainable strategy.

As a betting provider, how important is security to your business?

In everything that we do, security has to be paramount. We’re regulated from an online betting point of view and a gaming point of view. We have very regular audits to make sure the security of our customers is paramount.

To be fair, we don’t – and can’t – wait for an auditor to tell us we’re secure. It’s a given from our customer point of view that their details are more secure than in a bank.

Betting firms seem to be attractive targets for DDoS attacks – have you experienced this?

We’ve had many DDoS attacks in the last number of years and we’ve got very good systems to help us to deal with those, but these aren’t something that you just do and expect that it’s a theory. This is something that’s very, very, very real. We would be in a constant state of readiness and expectation that we could get an attack. You hope for the best and plan for the worst.

When you’re looking to work with an external IT provider, what informs your decision making?

We can look at small boutique houses if necessary, or small individual consultants or sometimes the big names. We’ll look to whatever is best in class.

I would say it’s nearly the opposite of ‘nobody got fired for buying IBM’. Quite often you can get your best innovation through early-stage companies who have a real expertise or niche rather than some of the broader, traditional IT companies.

We’ve found we can get access to the guy with 20 years’ experience and is just passionate about it, rather than a young trainee consultant. So it is horses for courses. The badge, from our point of view, isn’t what’s important.

Can you give some examples of the types of smaller providers you work with?

We’re working with Arkphire [for the virtualisation project] who came in, got under the skin of what we were about and understood what we needed. In some respects they acted as a consultancy house to understand what we needed to scale. That’s been inordinately successful.

We did a big deal last year with Interfusion, which is now part of the Vodafone group, to provide telecoms to each of our 180 shops and that increased our resilience and decreased our cost.

We’re also working with another company called Continent 8 Technologies, which provides us with some telecoms services. We’ve just done a deal with them, which gives us a 400pc increase in service that we used to have and a 75pc reduction in cost.

By partnering with really specialist companies, we can really get significant improvements – real, tangible business improvements.

What are the big trends driving the online betting business right now?

Mobile is a huge trend. Our mobile business has grown 300pc year-on-year. In-play [betting] is a huge trend which probably contributes to mobile because [it happens when] people are sitting watching a game.

I do think the trend within the industry is to try and get that balance between offering a large range of products and ease of use. Look at any of the operators in the industry – they all offer a large range and the trend is starting to try and make that a much more seamless user experience.

From our point of view, it’s actually getting the most innovative people involved, first off. Then those people will drive the technology that we use. We’re constantly looking for innovation in technology. Some we’ll do ourselves, some we’ll partner on, but it’s about having the smart people in the business.

How is technology letting you do things you couldn’t do before?

This year we’re doing a very big, attractive offer for Cheltenham – you get cash back if your horse finishes second within half a length. It’s on every race, every day. When you’ve got a very strong IT infrastructure, then you can think about ‘how am I really going to engage with customers across the whole week?’

I’m very much a realist – technology is only as good as its weakest link. We would be checking everything and making sure it’s right, but it’s technology that’s put us in a position that we can make such a strong offer.

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