On-the-Spot Computing Drives State Revenue

LOTTERY PLAYERS in New York State dream of getting rich quick to the tune of $6 billion in ticket sales each year. If you can’t even wait for the biweekly drawings, you’re not alone. Instant-winner scratch-off tickets account for half of all lottery tickets purchased.

To feed players’ appetites for new games and promotions, the New York Lottery has deployed mobile technology that helps its sales force keep tickets in stock and retailers up to date on lottery promotions.

Tablet PCs equipped with sales-force automation software, wireless capabilities, easy stylus writing and voice recognition have made the New York Lottery’s 110 sales agents more efficient. But the compact devices also have the potential to turn big profits.

“If the average retailer can sell two more $5 scratch-off tickets each day in a state like New York that has 15,000 lottery retailers, it would mean about $55 million a year in increased revenue,” explains Adam Perlow, vice president of Cole Systems Associates in New York, a maker of lottery sales-force software for Tablet PCs. “A small increase in efficiency can mean millions and millions of dollars.”

Other state lottery agencies have taken notice, and Tablet PCs are fast becoming the tool of choice for lottery sales-force staff and other state agencies for their sleek design and ability to communicate with back-office systems from the field.

The portable devices enable agents to keep track of each retailer’s inventory, place orders while on the road, convey questions to management and reconcile accounts in minutes instead of days. But the real jackpot from the investment may still lie ahead.

Measurable Results

Indiana’s Hoosier Lottery sells about $750 million a year in lottery tickets, but sales director Andrew Hendricks knew his 87 sales representatives could do an even better job with the help of technology. In March 2005, he equipped his team with Toshiba Tablet PCs and sales-force automation software.

“We chose the Tablet PCs because they are very user-friendly to the mobile user,” Hendricks explains. Each Tablet PC weighs about 4.5 pounds and runs on a rechargeable lithium battery pack that lasts about four-and-a-half hours. The device also includes a keyboard.

“They’re very much like a notepad,” Hendricks says. The application software used by the Hoosier Lottery staff uses digital ink and ink-to-text recognition — an interface that is more akin to using pen and paper than a computer. The application is operated by a stylus or touch-screen commands.

Nearly a year after the Tablet PCs’ rollout, Hendricks sees measurable results. Call rates — the percentage of retailers that are visited every week — have risen from less than 80 percent to more than 85 percent. Most sales reps make 15 to 20 retailer visits each day.

The Tablet PCs “allow us to get through our accounts more efficiently,” Hendricks points out. “We’ve got all our information in one place. Our reps don’t have to carry an inordinate amount of paper or files into the store, nor do they have to go back to their car for materials because everything is on their Tablet PCs.

“They can do electronic sales sheets, and show [the retailers] new games and promotions. Everything they need is right there on that Tablet PC.”

The activation rate for new games has jumped 10 percent. When a new pack of tickets is given to a retailer, the pack activation slip must be scanned into the register to activate those tickets for sale.

“We expect those games to be activated on the first day they’re available,” Hendricks says. “But our reps didn’t have an easy way of finding out if those games were activated. Now reps can see on their Tablet PCs that some retailers haven’t activated their tickets for the day,” and they can call them with a reminder.

Better Communication

Communication has also improved between reps on the road and back-office systems and staff. Myriad e-mails have been replaced with “burst” news updates sent to the entire sales force on their Tablets PCs. These updates announce promotions, jackpot amounts and company news.

What’s more, back-office systems can now tell retailers how many of each type of ticket are being sold — a process that was normally done by hand counting. “Now, since we know what tickets are being sold through the system, we can order tickets based on the best-selling games in your specific store for your specific market conditions,” Hendricks points out.

Less tangible but also important, Hendricks says, is that the technology “makes our sales reps look and feel more professional when they’re out there. They feel more confident and that makes them perform better.”

While the staff productivity gains are obvious, Hendricks hasn’t taken the leap into wireless connectivity yet. Instead, sales staff rely on daily downloads from their home computer into the Tablet PC for current information.

“As bandwidth and cellular technology get better, we will be completely real time in the field,” Hendricks adds. “I see us pushing out training videos and other large amounts of data.”

He plans to see a measurable return on the state’s $750,000 technology investment by 2007.

Gathering New Revenue

Lotteries aren’t the only state agencies reaping the financial rewards of using Tablet PCs. Revenue departments can benefit as well.

Every February, Tampa, Fla., gets ready for its annual Florida State Fair, a 14-day festival that draws hundreds of thousands of visitors to Hillsborough County — as well as hundreds of visiting merchants.

The event brings in vendors from all over the country — creating temporary Florida businesses. However, it also creates a complex problem for the state’s tax collection agents, who must identify, document and collect tax dollars that are due. Because of limited resources and the transitory nature of these businesses, there is a risk that some tax dollars may not be collected.

“They may only be here for a few days, and we probably have never touched many of these vendors” to collect taxes, says Larry Nielsen, intradepartmental projects administrator for the Florida Department of Revenue in Tallahassee.

Lost revenue from one event might seem like small change when compared to the $35 billion in state taxes that Florida collects annually. But if you add the dozens of other popular events in the state, you’re talking about untold dollars in uncollected taxes.

This year, Florida’s revenue agents will arm themselves with Tablet PCs that enable them to register vendors on location and collect estimates for taxes owed to the state.

The Tablet PCs, which are equipped with wireless air cards, can send and retrieve information through a virtual private network (VPN) to the Department of Revenue’s back-office system, which enables the staff to perform functions they were previously unable to do.

“Now, revenue agents can update case information instantly and convey it through the VPN to the department’s computer system,” says Rebecca Walker, wireless coordinator for the Florida Department of Revenue and project manager for the Tablet PC implementation. “We now have the ability to prove to vendors what is taxable onsite. We can perform the research, show the vendor the appropriate statute and print a copy for them — all in one visit.”

The department began piloting about a dozen Tablet PCs for six months beginning in December 2004.

“We had to perform an in-depth analysis on the air card itself and on the security of the VPN platform,” says David Merck, distributed computer systems specialist for the Department of Revenue. “We also have an internal security team. After we put together an application like this, they perform a complete review to ensure the security of our data and the process for using these tablets.”

Training of collection agents was another important consideration. The department’s Toshiba Portege M200 Tablets have voice recognition and a writing stylus, in addition to a keyboard, and these were new features for the staff. First, pilot testers took part in a 45-minute tutorial provided by the tablet vendor.

“Every week we provided testers with an assignment,” Walker explains. “The assignments helped build the users’ skills and tested the reliability of the equipment.”

In addition to using their Tablet PCs for special events, 67 collection agents use them daily during their 15 to 20 retail stops. Though it’s too soon for quantitative results, Walker says the technology makes agents more efficient.

“Without this equipment, the agents would have to complete all stops, take handwritten notes and then enter the notes into the department’s computer, duplicating work,” says Walker. “Now the notes can be entered while onsite.”

Down the road, Nielsen says it will be easier to measure the return on the department’s $130,000-plus investment in hardware, software and connectivity. “Now that we’re out in the field with the Tablet PCs,” he says, “we’ll be able to get real numbers on increased revenue collections.”