Taking Out the Tangles

When Ratner Cos. wanted to centralize its point-of-sale (POS) system, it quickly realized it lacked the required—and costly—network redundancy needed to support the new system. By outsourcing its POS application, Ratner strengthened its front end as well as added new solutions.

Vienna, Va.-based Ratner operates company-owned and franchised Hair Cuttery, BUBBLES, Salon Cielo and Spa, ColorWorks, and Salon Plaza hair salons. The privately held company, which reported $222 million in sales last year, did have technical challenges, however. First, it was operating “a decentralized, 20-year-old DOS-based POS system,” Tim Lemieux, Ratner’s senior VP, CIO, told Chain Store Age.

“Our infrastructure wasn’t reliable enough to support us if there was a disaster,” he explained. “We also have a small IT staff and cannot afford to keep DBAs [database administrators] monitoring systems 24 hours a day.”

This support is available through outsourcing arrangements, however. Besides supporting specific applications, hosting companies have a dedicated trained staff that works closely with product development,” Lemieux said. “They also have made hardened investments in their data center and security processes—investments that could be very prohibitive to small and mid-sized companies.”

These factors pushed Ratner to out-source its POS system to Tomax Corp., Salt Lake City.

Ratner successfully outfitted 40 stores with IBM thin-client PCs, in 2004. The units were programmed to run Tomax’s Java-based application, Retail.net , a suite of retail applications centrally hosted and managed by Tomax.

Next, the team added a new DSL frame-relay network to support the secure connection between Tomax’s data center in Salt Lake City and Ratner’s data center Washington, D.C.

During each transaction, the POS accesses Tomax’s central servers in real time. Data is pushed to Ratner’s data center and then streamed to each thin-client.

“Smaller, less-complicated PCs reduce our store-level costs and synchronize data, supporting our movement toward a centralized POS,” he explained. By July 2007, the company had expanded the solution to more than 900 stores.

Since it also outsources human-resources and payroll applications from Lawson Software, St. Paul, Minn., Ratner is setting up “a triangular telecom network,” Lemieux said.

“Essentially, if one line fails, we have a backup that can reroute traffic through the hosting facility to the location where the line failed,” he said. “This added level of redundancy is like insurance for us.”

Lemieux is convinced that the chain has saved money, since it did not have to directly invest in the physical infrastructure and facility costs.

“Having experts in our hosting data center frees up my staff is to focus on maintaining the company’s complex systems and utilize existing solutions to provide business benefits.”

Ratner upgraded its Retail.net solution in February, and began testing hosted debit-card authorization.

“Fifty-five percent of our transactions are credit. If we can convert 25% to 30% of these to debit, we will save $250,000 a year,” he said.

Ratner planned to make the application available chainwide this month.

Ratner hopes to outsource its labor-scheduling and merchandising functions, including forecasting, planning and replenishment over the next two years, Lemieux reported.