1. Info-Tech Research Group1 1 Info-Tech Research Group, Inc. Is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns. © 1997-2016 Info-Tech Research Group Inc. V4 Outsource Network Management in Gaming & Hospitality Past performance is a good indication of future performance. Place your bets wisely.

2. Info-Tech Research Group2 2 Successfully acquiring infrastructure services such as managed network services is not easy. Outsourced network services involve potentially high regulatory oversight and governance processes, long-term contracts, and have the ability to either deliver a great amount of value to your organization or be highly detrimental and expensive. In short, they present an inherent level of risk. However, the benefits of outsourcing network management are compelling and having a good acquisition process can help you minimize the risk associated with procuring network managed services. Clearly defined requirements, a well-formed RFP, a standard selection process, and carefully selected vendors will all increase your chances of success. Strong internal IT organizational change and vendor management processes are also critical. Lastly, the integration of the managed network service provider into the internal IT procedures and operations will deliver value and success. We hope you will find this blueprint helpful, and that it will be able to increase your odds of success. Larry Fretz, Gaming & Hospitality Practice Lead Info-Tech Research Group Everyone knows that reward is always associated with risk. ANALYST PERSPECTIVE

3. Info-Tech Research Group3 3 This Research is Designed For:This Research Will Help You: This Research Will Assist:This Research Will Help You: This Research Is Designed For:This Research Will Help You: This Research Will Also Assist:This Research Will Help Them: Take advantage of the many benefits outsourcing offers to gaming and hospitality organizations CIOs, VPs, and Infrastructure & Operations Managers who are considering outsourcing network management. CIOs, VPs, and Infrastructure & Operations Managers who are seeking to improve their network management capabilities. Determine if your organization can benefit from outsourcing network management. Determine your requirements and select a vendor. Build a roadmap to outsource network management within your organization. CFOs who would like to understand the risks and financial impact of outsourcing network management. Vendor managers of organizations that have decided to outsource network management. Understand the costs and benefits of outsourcing network management. Assess the business case for outsourcing network management. Develop the necessary tools and skills to build and manage successful relationships with vendors.

4. Info-Tech Research Group4 4 Resolution Situation ! Complication ? Info-Tech Insight Executive summary The network is a critical utility in the gaming and hospitality industry that requires constant availability and reliability. With such demands, many organizations cannot meet their network’s internal SLA or are doing so at a very high cost. As a result, outsourcing network management has become a common consideration. Making the case to outsource is difficult. Outsourcing does not reflect favorably on EBITDA and the controls and regulations can deter management from pursuing the project. Many organizations do not receive the value they expect in their first year of outsourcing. Without careful planning and due diligence regarding what to outsource, which vendor to use, and how to govern the outsourcing relationship, your organization will not succeed. Demonstrate the cost savings and other benefits from outsourcing over the duration of the contract. Complete an in-depth business analysis and assessment of your current state to understand your organization’s current readiness to outsource and to decide what to outsource. Perform due diligence when selecting a vendor and ensure that its basic SLAs meet your requirements. Develop a transition strategy that takes people, processes, and technologies into account. Establish a strong governance structure that reinforces accountability within your organization. Develop vendor management capabilities and a collaborative partnership with your vendor. 1.Performing due diligence in deciding what to outsource and which vendor to engage with leads to higher success rates. 2.Outsourcing cannot be achieved with a “set and forget” mentality. Active management of your vendor is crucial to success. 3.Failure is inevitable. Rather than placing blame, collaborate with your vendor to continuously improve and prevent the situation from occurring again.

5. Info-Tech Research Group5 5 If you haven’t considered outsourcing network management, you should Problem: Networks are a critical utility for guest satisfaction in the gaming and hospitality industry. However, managing the network adequately can be expensive as it can be time and resource intensive. Solution: Outsourcing network management provides a way for you to meet these network requirements cost effectively by handing off services or activities to providers that specialize in the function and are better equipped in terms of resources and expertise. Problem: Outsourcing could provide many opportunities for your organization. Unfortunately, outsourcing successfully is not an easy task. Solution: Leverage Info-Tech’s blueprint process and expertise to help you succeed in your outsourcing engagement. If you are spending more than $80,000 a year on network labor and tools maintenance, you need to explore outsourcing as an option. Of Info-Tech’s clients, 42% don’t get the value they expect from outsourcing in their first year.

6. Info-Tech Research Group6 6 Access to skills not available in house was the leading reason organizations chose to outsource Despite the cost savings outsourcing can provide, the ability to boost network capabilities is the leading factor in the decision to outsource. Respondents were asked why they chose to outsource network management. *Network World, 2011, N=1176

7. Info-Tech Research Group7 7 Outsourcing network management can boost IT’s capabilities and reduce costs Benefits of outsourcing network management include being able to focus your staff on more strategic projects, cost reduction, an improved ability to scale, and reduced off-hours work. Efficiency in allocating internal resources Outsourcing network management allows you to re-allocate your network team to more strategic roles that deliver more value to the organization. Reduced cost of ownership Cost savings can reach 20% of network management expenses. Since outsourcing providers are often more specialized in various aspects of network management, they are often able to perform activities more cost effectively. Improved ability to scale Outsourcing allows you to quickly scale up your network management capabilities. For example, it allows quick deployment of extra temporary network personnel to cater to the needs of events and conferences. Reduced off-hours work Outsourcing providers can handle night-time alerts, which reduces the instances where your team needs to work during off-hours. We’ve seen the market growing fairly quickly. The network layer has become far more complex than it was four or five years ago because of all the change that’s happening in the layer, skills are getting harder to find, and the business sees the network as a utility now. The business sees very little value in having IT staff who are managing an underlying network, so they’re moving to managed services and outsourcing. – Dimension Data

8. Info-Tech Research Group8 8 Treasure Island outsourced to gain greater efficiencies and higher system availability Dominic Vacca, IT Executive Director of Treasure Island Hotel and Casino (T.I.) in Las Vegas, led a 16-person team to support over 100 servers, nearly 200 networked devices, and over 3,000 employees. According to Vacca, “We implement and support nearly every piece of technology at the property, and T.I. requires continuous uptime, especially when it comes to guest services.” Situation T.I. was using standard off-the- shelf network monitoring and alerting tools, but their staff used the tools reactively, addressing problems only after something went wrong. However, daily IT activities and responsibilities typically resulted in a lack of focus on monitoring tools. “Our IT department shouldn’t be in the business of managing complex infrastructure management tools – we should be serving the IT needs of the business,” said Vacca. Problem T.I. began looking into outsourcing infrastructure monitoring, alerting, and reporting to a service provider. T.I. required an IT service provider that could participate in the management of its gaming control board regulated systems. The casino contracted with NetEffect, a provider that received its license from the Nevada Gaming Commission. Since outsourcing, T.I. has been able to improve its efficiencies and achieve higher system availability. “Now we have access to tools and information we’ve never had before,” says Vacca. Solution Treasure Island Hotel and Casino “Our IT department shouldn’t be in the business of managing complex infrastructure management tools – we should be serving the IT needs of the business.” – Dominic Vacca Role: IT Executive Director Location: Las Vegas, NV

9. Info-Tech Research Group9 9 Examining your historical ability to meet SLAs can indicate whether outsourcing could benefit your organization If the IT organization has not been meeting its SLAs with the business, outsourcing could help bridge the gap. 1. Has IT established internal service level agreements (SLAs) with the business? No 2. Is IT currently meeting its SLAs? Has it historically been able to meet its SLAs? Yes An internal SLA is an agreement between IT and the business that describes the target service levels and specifies the responsibilities of the provider and the customer. SLAs are critical to the success of IT and they establish clarity between IT and the business. To begin building your SLA, refer to Info-Tech’s blueprint, Improve IT-Business Alignment Through an Internal SLA.Improve IT-Business Alignment Through an Internal SLA If IT has historically failed to meet internal SLAs, outsourcing could help solve this problem. Assess IT’s current capabilities to understand the gap between IT’s capabilities and the business’ needs. What would it take to bridge this gap? Does your organization have the skills and resources to bridge this gap in-house? If your organization does not have the skills and resources to meet internal SLAs, outsourcing can be an efficient way to boost your capabilities.

10. Info-Tech Research Group10Info-Tech Research Group10 The 3 Tower Resort Las Vegas cut costs and improved its network capabilities by outsourcing network management The 3 Tower Resort Las Vegas (3 Tower) was using a third-party provider for guest room internet equipment, support, and connectivity and paying in excess of $28,000 per month. Guest service scores were in the low 50s. The lack of Wi-Fi at various low-rise venues (movie theatre, concert hall, casino floor, pool, food and beverage, and nightlife locations) hampered the resort’s ability to meet group event and convention needs and resulted in lost revenue. The resort wanted to roll out various business productivity and guest experience tools, such as HotSOS. Situation The two guest room towers were 12 and 7 years old with different low voltage cable and IDF plans. The low-rise areas required new low- voltage cable runs to be installed. The hospitality and gaming sector faces density & compliance challenges that are generally unmatched by other industries. Every four guest rooms is equivalent to a 4,000 sq.ft. house, but holds 8 guests and 24 devices surrounded in close proximity above, below, and around by other rooms. Hospitality is a 24/7 business and coordinating the installation of network equipment in guest rooms and public spaces is a challenge. Challenge The resort partnered with key convention groups and partners to offset the capital costs of insourcing and building the wireless network. The resort strategically used cloud and managed services for the guest portal and guest technical support, making IT a service provider directly to the guest. Over 10 months, the resort upgraded the WLAN for the two towers and low-rise areas, providing a pervasive wireless network from guest room, to casino, to venue. EBITDA increased by 2.1%. Guest service scores increased to the high 80s. Action and Result The 3 Tower Casino Resort Las Vegas Sector: Source: Hospitality Info-Tech Interview

11. Info-Tech Research Group11Info-Tech Research Group11 A casino resort in Vegas cut costs and improved its network capabilities by outsourcing network management Bob* joined the Casino Resort as the CIO with a mandate to stabilize IT, enable new capabilities, and reduce costs across the business. At the time, IT managed over 100 network and security devices, with 1 FTE Network Engineer and no monitoring tools. The ability to roll out new business capabilities such as guest Wi-Fi and new venues were hampered by the time it took to make needed changes. When bottlenecks and outages occurred, the response was often reactionary and delayed. Situation Within the first 90 days, Bob evaluated the pain points within IT, skill sets available, and developed some options to stabilize IT. He found that it was less expensive operationally (past the first year) to outsource the resort’s network management than it was to hire the level of expertise he needed to fill the skills gaps and purchase or set up network monitoring. The SLAs offered were also far better than what they could have achieved in-house. Bob decided to outsource all network management activities. Solution The availability and the reliability of the network improved. Whether it was a move, add, change, or break/fix incident, the service levels improved significantly. Incident responsiveness improved down to minutes and the accuracy of network change and configuration management improved to 97%. “If you are spending more than $80,000 per year on network labor and tools maintenance, then you should look at outsourcing your network management.” Results Casino Resort* CIO Bob* pulled Casino Resort* in Las Vegas out of a financial rut by outsourcing its network management. Role: CIO Location: Las Vegas, NV *Names in this case study are disguised.

12. Info-Tech Research Group12Info-Tech Research Group12 Understand your current state and readiness to manage an outsourcing relationship. Outsourcing successfully is not an easy task. Follow Info- Tech’s blueprint to increase your chances of success Key Components of a Successful Plan Common Reasons for Outsourcing Failure: Overall lack of due diligence in the outsourcing process. Unsuitable service provider. Lack of outsourcing integration. Poor service provider management. Conduct due diligence when deciding what to outsource. Outsourcing doesn’t need to be an all-or-nothing deal. Understand which components of the network you would benefit the most from outsourcing. Identify aspects of the network that are completely inappropriate for outsourcing in your environment. Identify infrastructure requirements before developing an RFP. Clarify your current and future requirements to prevent entering into contracts that can’t meet your requirements. Assess and select the most appropriate provider for the organization’s needs. Exit costs are high and the inability to meet your requirements can be even more expensive. Manage the transition and vendor relationship. Poor transition planning and vendor management results in delayed benefits and a poor relationship with your outsourcing service provider. Outsourcing does not mean “set and forget.” It requires active vendor management and a certain level of process maturity.

13. Info-Tech Research Group13Info-Tech Research Group13 Consulting “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.” Guided Implementation “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.” DIY Toolkit “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.” Workshop “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.” Diagnostics and consistent frameworks used throughout all four options Info-Tech offers various levels of support to best suit your needs

14. Info-Tech Research Group14Info-Tech Research Group14 Best-Practice Toolkit 1. Assess the current state and target state of your organization’s network management 2. Decide whether to outsource network management 3. Develop the business case and structure the project 4. Develop and issue an RFP 5. Evaluate RFP responses 6. Select a vendor and review your contract 9. Develop a collaborative partnership with your vendor 10. Work toward continuous improvement Guided Implementations Scoping call Assess the current state Make the case to outsource Scoping call Review your business case Review your RFP Review your vendor shortlist Finalize the contract Discuss implementation challenges and metrics Onsite Workshop Module 1: Make the case Module 2: Gather requirements and begin to develop an RFP Module 3: Develop an action plan Phase 1 Results: Go/no-go decision to outsource Phase 2 Results: Business case RFP Phase 3 Results: Vendor selected Action plan developed Success measured Assess the current state Outsource Network Management in Gaming & Hospitality – project overview Build the RFP and select a vendor Develop an action plan and implement

15. Info-Tech Research Group15Info-Tech Research Group15 Day 1Day 2Day 3Day 4Day 5 PreparationWorkshop Day Working Session Workshop Preparation Compile all sets of current performance indicators for the organization. Create comprehensive list of performance objectives for the organization. Send workshop agenda to all workshop participants. Morning Itinerary Discuss your drivers to outsource network management. Map your network services and activities. Evaluate the criticality of each network service. Afternoon Itinerary Assess your current network management capabilities. Define your network management requirements. Conduct a gap analysis and select components to outsource. Morning Itinerary Assess your organization’s readiness to outsource. Decide whether to outsource now or postpone the project. Begin creating a business case. Afternoon Itinerary Structure the project and define project roles and responsibilities. Define project metrics. Develop a high-level project timeline. Complete the business case. Morning Itinerary Transfer your network management requirements to Info- Tech’s RFP template. Complete and review your RFP. Afternoon Itinerary Discuss the vendor market and develop a scoring methodology. Develop a timeline and next steps post- workshop. Wrap-up. Workshop Debrief Review each of the steps in the outsourcing process. Assess whether or not steps can be omitted/changed. Revise performance objectives. Next Steps Develop a set of metrics that can be used to monitor ongoing project success. Create a schedule and role/responsibility matrix for future monitoring activities. Workshop overview This workshop can be deployed as either a four or five-day engagement depending on the level of preparation completed by the client prior to the facilitator arriving onsite. The light blue slides at the end of each section highlight the key activities and exercises that will be completed during the engagement with our analyst team. Contact your account representative or email Workshops@InfoTech.com for more information.Workshops@InfoTech.com