Churchill Downs CIO: Jay Rollins

Dan Farber: Jay thanks for joining me.

Jay Rollins: Glad to be here Dan.

Dan Farber: Now you're the CIO at Churchill Downs, the venerable racing track, home of the Kentucky Derby, and I hear that you were brought in as a "Mr. Fix-it" to come in and deal with some of the problems that the company was having around its IT?

Jay Rollins: Well, there were a lot of problems, there were a lot of band aids and bubble-gum there. We needed to fix quite a bit. But it was one of those necessary things you had to do before you got to that next level, and that was being able to innovate and start growing the business with IT.

Dan Farber: Now made you attractive to Churchill Downs as someone who could come in and deal with those problems?

Jay Rollins: Probably my start-up experience. You have your hands in so many things, and you know, what I say is typically, for one year in a startup, you get about three years worth of experience just because of everything you have to touch. And, I'd say that type of experience kind of gives you that hind-sight that says "yes, this is wrong, you shouldn't be doing it this way," or things along those lines. And you know that, from dealing with things over such a short period in a startup, that you know what's going to break downstream, so you try and fix it right up front.

Dan Farber: Now typically when you come into a company, especially a company like Churchill Downs, where it's been around for over 130 years, you know you have some traditional and established ways of doing business. And, what was your style and philosophy in terms of how do you get the team on board?

Jay Rollins: Well, you approach a team very differently, and that is, you don't want to be the person that's moving the cheese. You want to be the person that's working with the business, to help them achieve their goals. And show that you are someone that they can rely on to help them do things. And then, you can add your own twists and turns in that to give them those "a-ha!" moments and build that trust, where you're actually collaborating and eventually they're coming to you with their ideas instead of the other way around.

Dan Farber: What's a good example of where you rallied the team and took them in a new direction, and they actually went along with it?

Jay Rollins: That would have to be around the wireless standpoint. There was a need to have a hotspot internet access, we've had some requests from customers who wanted to bring their laptops and trade stocks as well as bet on horses

Dan Farber: And probably do e-mail as well?

Jay Rollins: Exactly. So there wasn't a huge business benefit from that except for a customer satisfaction element. But what we were starting to see with the queuing issues that we were having on the Kentucky Derby was such that this infrastructure could be leveraged for many things. It can be leveraged for access control for ticketing. It can be leveraged for wireless wagering, as well as several other elements such as tracking systems and things like that. So, we got it in under one premise, and then we'll allow the business to understand the possibilities of the platform we just implemented. And say, "Hey, now we can do this, and now we can do that." And that's when they start getting really excited and getting involved, and say "hey, what about if we do this?" So that's just the idea generation, the actual team meshing part of it. That's really where the juice is.

Dan Farber: Now how is horse-racing different from other industries that you've been in as a technologist?

Jay Rollins: Industry-wise it is different, technology wise it's really not. I mean, it's all about the transaction. The processes or the technologies that facilitate those transactions. They're really the same, and I would equate horse-racing, the wagering elements of it, and the data and statistics required to get good at it, very similar to stock trading.

Dan Farber: So in terms of building core platforms, what are some of those frameworks and core platforms that you've implemented over the last few years to build a stable infrastructure?

Jay Rollins: I think one of the key ones was the network. It's a very large campus. Anybody could plug into that network and

Dan Farber: And it's not just a single campus, I understand you have four tracks?

Jay Rollins: Four tracks. We have 18 off track betting facilities around the country. And granted Churchill Downs, the racetrack itself, does not manage the wagering. But if Churchill Downs brand, if it ever got out that there was a security problem: public relations nightmare. So, we needed to shore up the security, we needed to get things manageable and under control, stop reacting and getting proactive. And the best way to do that, we saw, at least on the low-hanging fruit, was get a managed network in place, and update it and replace it.

Dan Farber: How do you deal with the issue of vendor management? I mean a lot of companies and CIO's that I talk to; you know a critical path for them is finding vendors who they can actually partner with, and go down a path that they can rely upon, because they're investing so much in building a network, or building an ERP system?

Jay Rollins: That's actually an easy one. We fired all of our vendors.

Dan Farber: You fired all your vendors?

Jay Rollins: We have no vendors. We now have partners.

Dan Farber: And what's the difference between a vendor and a partner then?

Jay Rollins: A partnership is a give and take, alright. So, my IT staff is not a very large staff. So, from an R&D, just going out and trying to find new technologies in how we can help our business, is not an easy thing to do, with all the other day jobs we have, right? So, what we do is rely on partners, such as Sysco, or EMC, or Dell, or HP to actually let us know what's happening out in the marketplace, bring that to us a non-pressured sales type thing, but more in an information sharing standpoint. And then, them displaying skin in the game as well. And it's not sales-pricy, you're not going to get the cheapest price with a lot of these companies, but what you do get is access to information, access to information, access to things that can actually help you do your job better.

Dan Farber: And what's a good example of where that partnership relationship has resulted in you being able to innovate?

Jay Rollins: Well, most partners do these executive briefings. And they're difficult to get to, just taking time out of your busy day, but they're so worth it. We did one with EMC, out in the Boston area, where we were trying to learn more about storage, because we were relocating our CRM systems to our data center, and we needed a storage solution. But we also need to go down the path of a disaster recovery platform in 2007. So we have a conversation with EMC at their executive briefing center, and there were four things that we're able to do to solve real problems that we were focusing on, that also takes care of 40 to 60% of a disaster recovery project that we have to do this year. Just by having that exposure to the girth of whatever they bring to the table, we're able to go ahead and make those types of strategic decisions and say, "Alright, if we do this, we save cost here." And we get a world class solution.

Dan Farber: Now the internet and wireless technologies, Web 2.0, all of the things that have changed the consumer experience, the customer experience, have changed expectations about if you're coming to a racetrack, or if you're going to a bank, or even to a library, you have a different idea of what the experience should be. So how have you managed to change the customer experience through those technologies?

Jay Rollins: There's a few ways, on the web 2.0 side, we did start leveraging RSS feeds, and blogs, and

Dan Farber: And what do the blogs do for the customer?

Jay Rollins: Well, it's a very data intensive, very similar to stocks, where you need to read up and study your stock, your company that you want to buy this particular stock in. It's very similar in horse-racing when you're handicapping a horse. There are all kinds of statistics available to you, there are all kinds of experts in horse-racing. So what we've done is we've hired several of these experts in preparations for the Kentucky Derby to contribute blogs. Different points of view, as the field of four hundred and forty horses gets narrowed down to the 20 horses that will eventually run the Kentucky Derby in May.

Dan Farber: And do you allow the people reading the blogs to actually contribute their opinions as well?

Jay Rollins: Yes.

Dan Farber: Any notion of social networking as part of what you're looking forward to?

Jay Rollins: Well, there is a new phase of our business we're going down that we believe that there's a collaboration element to horse-racing; very similar to the "nuttiness" on television about poker. We believe that there are some synergies between poker and horse-racing. You're still betting against other people, you not betting against the house.

Dan Farber: How do you deal with the regulations though? The government online betting, online poker?

Jay Rollins: Well, with the recent regulatory issues, there is a carve-out for horse-racing, there is a horse-racing act. There is a carve-out in the Wire Act for horse-racing. And those types of things actually have language that do not associate it with these other things. There's differences in opinion and interpretations as there will always be. But we're pretty confident that we're going to come out on the positive side of that.

Dan Farber: I understand it that Kentucky Derby day is a big peak day: 160,000 people, presumably betting and drinking at the same time?

Jay Rollins: Hopefully betting, yes

Dan Farber: And, how do you plan for something like that? Give you have one peak day, and where do you get the capacity from, and how to accommodate all those people who want to bet at the same time?

Jay Rollins: We leverage partners, again, to help us, because it is just an enormous thing. The city of Louisville helps out tremendously. There's a whole two-week festival that Louisville puts on, just in preparation for this derby. But, it does pose a problem where you have 1,200 to 2,000 betting devices, and 160,000 people that want to bet. There's queuing problems, and some of the things that we want to do with the technology is to implement some wireless capabilities that would allow us to double, or triple the amount of wagering devices we have on track, without having to do a significant investment in additional hardware. So, we've had some early success with that, and we're hoping to deploy this Spring a much broader solution to actually allow us - our customers - to wager off the same one.

Dan Farber: And what is that solution based on?

Jay Rollins: The wagering system itself, the Totalisator, nice name it came up 30 years ago, but the Totalisator system that we started working with a vendor to create a wireless interface so people can carry around a PDA throughout the entire plant, so we have wireless AP's everywhere. And when they want to place their bet, they can do it right then and there.

Dan Farber: Now I also understand that your responsible for the facilities, management, part of the operation as well. And, what are some of the big concerns or issues that you have that IT can be applied to?

Jay Rollins: What we have a knack of doing is business process, engineering. We see a business process, we can make it more efficient with technology, and that's how I like to approach it. If there is a you know there is some things that are on the back side. The back side is still the same way it was a hundred years ago. It's horses, it's hay, it's manure, it's trainers, it's jockeys

Dan Farber: So you're not involved in the manure removal process?

Jay Rollins: It is a significant expense, but I have not come up with a software program that can actually help us with that problem.

Dan Farber: I was just thinking maybe you could use that to help fuel your power plant.

Jay Rollins: Well, that is I'll have to look at that one. I'm not exactly sure if we can do that, but that's definitely a possibility.

Dan Farber: Well, finally I'd like to ask you if now that you're at Churchill Downs, and providing their IT services, do you partake in the betting yourself, and can you give us any tips on how we can win at the track?

Jay Rollins: I do partake; I lose often, if not always.

Dan Farber: You give money back to the company.

Jay Rollins: That's exactly right. So I'm funding my paycheck in one way or another. It's a fun thing to do, I don't do it that often, but nothing like the feeling when you do win an exact every now and then.

Dan Farber: Well Jay, thanks very much for speaking with me.

Jay Rollins: Glad to be here, thank you.

Dan Farber: I've been speaking with Jay Rollins, who is the CIO of Churchill Downs. For CIO Sessions, I'm Dan Farber. Thanks for watching.