Magazine Article | May 1, 2002

Escape Dial-Up Denial

Source: Innovative Retail Technologies

Dial-up network connections may get the job done, but without a dedicated network you are denying your retail operation efficiency and cost savings.

Integrated Solutions For Retailers, May 2002
Stephanie Roussel-Dupre

It's May and summer shopping is in full swing at your retail operation. The CEO wants an evaluation of new gift and loyalty card programs, and has given you an August deadline to have a solution up and running. You're up to your elbows in vendor information regarding how to work with a third-party card database company, when you get a call from store #120. The dial-up connection went down (again) last night. As a result, headquarters didn't receive accurate sales polling information, and the store isn't updated with the latest price changes. "Great," you think, "another day lost on network disruption issues."

Benefits Of Frame Relay Outweigh Additional Costs
A closer look at this month's issue will reveal that networking issues are in the forefront of many retailers' minds. My interviews this month focused less on the customer-facing aspect of retail technology and more on the network backbone that makes retail enterprises tick. In the past, high-speed network connections seemed possible and financially practical for only the biggest retailers. But 99¢ Only Stores, K B Toys, and Wilsons Leather explain that the cost justification of dedicated frame relay or VPN (virtual private network) technology came from the additional value-added functions the wide area networks (WANs) provided.

If you went to your CEO with the idea to replace dial-up batch transaction lines with frame relay or DSL (digital subscriber line), the initial doubled expense would probably be enough for any CEO to question your commitment to the bottom line. Make sure your technology proposal includes the drawbacks of current processes: escalating long distance charges; the lack of real-time sales visibility; manual processes such as mail, company forms, and workflow that cost the company time and money; and additional credit transaction fees from third-party dial processing companies. These are just a handful of the enterprise issues that retailers like K B Toys, Wilsons, and 99¢ Only Stores solved by simply changing their communication connections to a dedicated line.

You Don't Have To Go It Alone
While you are looking into a network revamp, you should also consider that your IT staff wasn't hired simply to sustain a working network. Their technological minds should be put to work implementing new technology that will help your retail company grow, not just maintain its current position in the market. And if you choose to go from a dial-up environment to one that is transmitting more data, you are building more complexity into your system maintenance. For that reason, managed network service providers (MNSPs) have come on the scene to alleviate some of the mundane, yet time-consuming, issues that occur on a daily basis. The Yankee Group projects the MNSP market to grow to a $7.4 billion industry by 2004. These service providers help design, implement, and support retail networks while still keeping the IT staff in the loop.

Vanguard Managed Solutions is one company that offers network management to retailers. Since the MNSP has direct visibility into a retailer's network, it can recognize possible problems even before a store knows. According to Vanguard, managed networks result in 97% less retailer-initiated network calls, which leaves retailers with that much more time to work on technology initiatives. A closer look at the numbers reveals the decreased amount of dispatched maintenance that needed to occur because most problems can be resolved directly by the service provider itself.

So, as you look deeper into the immediate technology issues, such as gift cards, step back and look at the larger IT infrastructure. Building a network that can branch into other technology initiatives will help you and your CEO see a large return of time and money.