We’re a center-led environment,” says Mark Stolarczyk, VP of strategic sourcing for the vibrant MGM Mirage. “Each of our property purchasing directors reports up to the CFO for that particular property,” he explains. Each of the properties has its own structure and its own supplier diversity goals.
When Stolarczyk talks about the “properties” of this leading and respected hotel and gaming company, he’s referring to seventeen lavish, varied and exciting destinations including not only hotels and casinos but top-scale urban developments, in Nevada, Mississippi, Michigan and more. Bellagio, MGM Grand, Mandalay Bay, The Mirage, Circus Circus and New York-New York are just a few of the MGM Mirage names known around the world.
Common purchasing
“Each of our properties has its own unique personality,” Stolarczyk stresses. On the other hand, they clearly have many purchasing needs in common. Stolarczyk’s group “negotiates corporate agreements for things that all or most of our properties use.” But each property also has its own purchasing group to deal with its own special needs, he says.
Year 2000 kickoff
Supplier diversity at MGM Mirage started in earnest in 2000, shortly after MGM Grand Inc acquired the Mirage Resorts. That was the first big merger, and a very visible one, Stolarczyk explains.
“Putting together two very large organizations was really going to change the landscape of Las Vegas. We saw that we were now a much bigger company, and felt we really needed to step up our efforts and make supplier diversity a more formal program with its own specific policies and procedures.”
So they took inventory, and realized that “Although we had made efforts in many areas of diversity, we needed to really weave it into the fabric of our culture.”
First steps
The first move was to record exactly where they were with supplier diversity. What was their spend with diverse suppliers, including MBEs and WBEs?
To do that properly they had to search all their databases. It was quite a challenge for two very large companies, each with its own system of recordkeeping. But they tackled the task of “taking a look at all that data and making sense of it and going public with it and saying, ‘Here we are,’” Stolarczyk recalls.
The spend with diverse suppliers turned out to be a little over 5 percent. “When we benchmarked that against other companies in corporate America, we saw we had some work to do.”
And they got right to work to do it. “There was a lot more dialog between the corporate purchasing department and the properties.” Several taskforces were put together, including a property-wide purchasing council to focus on supplier diversity and identify suitable diverse suppliers.
In 2006, Stolarczyk notes, the total spend for MGM Mirage was 1.3 billion, and the diversity spend was some 11.5 percent of that.
Making connections
They also decided to create an MGM Mirage website where diverse suppliers could register. “We thought that would be a great way to invite them in and give them an idea of who we are and what types of business services we purchase. Once we verified that the suppliers were certified M/WBEs we would make them visible to all the buyers within our organization.”
MGM Mirage made connections with NMSDC and WBENC affiliates from the very beginning. “We’ve always had relationships with those agencies,” Stolarczyk remarks. “Our purchasing people attend diversity events almost every month to have some dialog with business owners and see if there’s a potential for doing business.”
Its own expos
MGM Mirage also puts on its own business expos: four of them since 2000. “At our last one more than a thousand suppliers attended. It was a huge success,” Stolarczyk says.
“We set up a booth for every one of our properties, along with corporate booths, and invited suppliers to come in and talk to key contact people at those locations. It worked out really well.”
In 2007 the expo was held at the Beau Rivage in Mississippi. “We thought it was a good place to do it since we had just reopened our property down there after the devastation from Hurricane Katrina. We’re talking about taking the show on the road to Detroit next because our permanent facility in that location opened recently,” Stolarczyk discloses.
That little nudge
Also in the works is a training event for some of the diverse suppliers MGM Mirage already does business with. “In some cases we think they’re ready to move up to the next level.
“We’re looking at bringing in training specialists to facilitate courses on capacity building, writing business plans and so forth. We’ll invite the suppliers who need it and hope the special coaching will get them to the next level, whether it’s with us or with other companies.”
Tier 2 requirements
Recently MGM Mirage, along with the American Gaming Association and a select group of other members, hosted a luncheon for twenty-five of the largest suppliers to the gaming industry.
The meeting had a very serious objective. MGM and the others announced that in the future they would ask their major suppliers to specifically report their tier 2 spend on diverse participation. “And if we find they’re not really in the game, they may not win a bid from us next time.”
This is, of course, especially meaningful in light of the mammoth construction projects now under way.
“I can’t speak specifically on the construction spend but they have really stepped up their efforts,” Stolarczyk notes. “Throughout the company, wherever there is spend there are expectations.”
Beneficial to all
“At the end of the day,” Stolarczyk says, “when it comes to supplier diversity we are not compromising anything. We expect the same from all our suppliers. Our diverse spend is going to suppliers who are providing a value to us, and the value proposition represented by our 11.5 percent spend with diverse suppliers is beneficial to our company.”
Introducing iGate
Tom Peck, VP and CIO of MGM Mirage, knew and worked with iGate when he was CIO and, later, senior VP of the NBC Universal entertainment division, part of GE Corporate.
iGate Global Solutions is a subsidiary of iGate Corp (Pittsburgh, PA), a fully integrated technology and operations firm with a global service model and close associations to India. It was one of many supplier partners GE had used.
“When I joined MGM Mirage in 2005 I realized there were almost no third-party software companies in the Vegas area that provided the application maintenance and staff augmentation services we needed,” Peck explains. “So I went back to previous vendor relationships and introduced iGate and some other companies to Las Vegas and our industry.
“Because of its known ability to perform and execute, iGate was invited to bid on some of our newer work. The firm won several bids and works in several areas for me today, including automated performance and load testing, application maintenance, software development and some project management.
“Having a vendor who can provide ‘round-the-clock offshore and near-shore support is very important to us. We’re always trying to recruit the best and most diverse talent we can find and iGate fills a nice niche for us,” Peck says. “They’re a well-rounded organization with a breadth of skills.”
iGate: strategy IT partner to MGM Mirage
MGM Mirage makes enormous use of IT, but obviously that is not its core business, so companies like iGate provide the support it needs.
Lalit Khandelwal, who has studied engineering and management, is director of sales for the media and entertainment segment of iGate Global Solutions. Phaneesh Murthy is CEO and managing director of iGate Global Solutions, Sunil Wadhwani is co-chair and CEO of iGate Corp and Ashok Trivedi is co-chair and president of iGate Corp.
Khandelwal focuses on sales and business development for IT and business process optimization (BPO) services, and manages the MGM Mirage relationship.
iGate helps MGM Mirage leverage offshore software development and maintenance services, he explains. “We help them spend smarter and achieve the benefits of shorter software development cycles, faster time to market and reduced software development and maintenance cost.”
iGate Global Solutions has sixteen sales offices across North America, Europe and Asia, along with development and BPO delivery centers.
Critical projects
Some development is done in the U.S., Khandelwal adds; mostly time-critical projects. “We execute in different phases,” he explains.
The first phase is requirement gathering, with iGate’s senior project managers or technical architects working with the client’s IT managers. The design is prepared and passed on to the offshore team which completes the coding. iGate’s onsite team, along with the client’s team, do the acceptance tests and move application to production.
It’s a real collaborative effort, Khandelwal concludes.
Infrastructure apps
MGM Mirage is a strategic client for iGate, Khandelwal says. iGate currently provides services in the areas of project management, application development and maintenance. The iGate team supports several applications that are “critical for the gaming business.”
Local talent
Projects with MGM Mirage tend to be of short duration, Khandelwal notes; ideal for bringing in visiting techies from India. “Some people will come here for the requirement gathering. Then they return to India and new people come in. That way a lot of our talent gets the opportunity to come to the U.S.”
For long term onsite client requirements, iGate prefers to hire local tech talent. “As long as they meet the exact project requirements it makes no difference what nationality they are. We also try to find people who are interested in the particular location and likely to continue for the long term.”
Key message
“The key message for me,” says Peck of MGM Mirage, “is to look at our vendors not only for their ability to execute but also the diversity they bring to the table, and to find an appropriate balance and if possible build a long-term relationship together.”
MGM Mirage, he says, values iGate because it “brings a global footprint: different types of people from different industries and different continents. Diversity of thought and experience is consistent with our corporate mission and vision, so it’s a nice fit.”
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