NEWS > ANALYSIS
Twists and turns It can be argued that Ladbrokes simply began the development at the wrong time. For a sector in which the adoption of new technology arguably occurs more slowly than in many others, the gaming industry has moved relatively rapidly in 2011 and 2012 – none more so than its chief rival William Hill in its adoption of mobile, with the ?rm claiming to have seen punters place 2,500 bets per minute in the leadup to last year’s Grand National on smartphone and tablet devices (see page 40 for more on mobile). With other companies releasing new slants on mobile sports betting such as Hills’ remote betslips, and Sky seeking to move away from the traditional online sportsbook layout by shifting the position of key elements of its site, Ladbrokes clearly sensed that its ecommerce platform was in danger of being out-of-date before it was even released. “Not only are they trying to catch up, but the point they are trying to catch up to will have moved on by the time they get there,” Batram gloomily adds. Though these changes were designed to ensure the new platforms were as up-to-date as possible, constantly tweaking the original build brief has served to delay the launch and cause f riction with the ?rm’s creative consulting partner Sapient, which was brought in to work on the front end of the new site. Taking such a reactive approach can be dangerous – ?rms looking to create a truly innovative site should aim to bring in the sort of features it would like to see on betting sites, rather than simply aim to copy what its competitors are doing. Most crucially, these changes and delays ramp up costs – by the start of 2012 the project had eaten up its initial £20m investment and was far from completion. Power struggles Much has been written about Ladbrokes chief executive Richard Glynn’s restructuring of the business, with a total of seven reworkings of the company’s management structure understood to have taken place since he joined in April 2010, and it seems that this has led to further delays in the platform development. Glynn has described his approach as a move to create “a new, cross-channel, centralised” structure, breaking away from the traditional model of dividing the company into separate product teams. Simon French, gaming and leisure analyst at Panmure Gordon, says it is inevitable this type of strategy can hamper projects, but concedes further tweaks could set it in good stead for the future: “I think to put in place such a big change in management structure and product it was inevitable that there would be complications. “Overall, the operating structure they have chosen takes them on a very different route to other companies, but my biggest criticism would be that when they initially reorganised they didn’t give someone direct responsibility for the P&L of the online division, though now that has been
Richard Glynn Ladbrokes chief executive since April 2010 Overleaf: Ladbrokes iPad television advert
given to Nick Rust alongside retail they should see improvements,” French adds. The current structure, despite Glynn allegedly “de-siloing” the business, divides the company into four main areas, each one responsible for its own area of the business; customer, channels, product and IT. Working on the development of a new platform requires a structure which should allow different people from different teams to work together on the project under a single project manager, but eGR understands a number of power struggles between departments have arisen. eGR has learned that the head of each “silo” was involved in the development of the new platforms to the point where developers would require sign-off from the four people, essentially dragging the project to a standstill – should two sign off one step of the development and another two refuse to do so, things could not progress until the impasse is resolved. Despite these struggles Ladbrokes was able to enter beta-testing, only to discover that following the stop-start nature of the build the sportsbook platform in particular was riddled with bugs
“The operating structure [Ladbrokes] have chosen takes them on a very different route to other companies”
and glitches, eGR’s source explained, prompting management to focus on perfecting the site. This led to further delays, forcing Lads to give up on focusing on the project in order to make super?cial changes to the existing sportsbook. The drawn-out process, however, seems to be coming to an end, with both platforms likely to be fully launched in the ?rst half of this year. Panmure’s French believes the company will have a stay of execution for at least two years once it goes live, as people give the new product time to attract a larger audience. “It’s not necessarily too late, but they need to make sure their execution is spot on – otherwise they will have invested £50m on the new sportsbook with nothing to show for it,” he says. “It won’t be until the end of 2014 that we will be able to judge whether or not the project has been a success, especially as by the end of that year 50% of revenue will be derived from touch-based products.” The company’s share price has shown remarkable resilience and risen from 157.8p, when it announced the delays of the launch in July 2012, to its current rate of 202.5p at the time of writing, which Batram suggests shows that Ladbrokes is being afforded the bene?t of the doubt. However, considering just how far ahead of Ladbrokes its competitors have moved, the delays may see them struggle to claw back market share no matter how great the improvements.
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