Andrew Colley | August 12, 2008
case study | Kathmandu
PUTTING together a good retail point-of-sale system is all about being ready for the gotchas, Kathmandu information technology manager Bryan Moore says.
Kathmandu's new system speeds sales
It was designed to replace a retail POS system the outdoor clothing and equipment chain installed in 2002.
That system was designed to serve about 30 stores. After Kathmandu opened its 33rd outlet it clearly needed a new system.
The company's database began to groan and sag, and its reliability became a concern for Moore, especially during the chain's quarterly sales.
Maintenance and upgrade charges for the system were becoming prohibitive and it was holding back the sales and marketing strategy.
Customers queued 40-deep at sales counters before walking away in frustration as inexperienced staff juggled calculators and pencils to arrive at pricing for simple promotional offers.
"As we got larger we wanted to be able work smarter in how we delivered our pricing to the point of sale.
"One of the key drivers was that during our peak sales periods we have less experienced sales staff so we wanted to take decision making away from the staff and let the system take control," Moore says.
The company decided to start from scratch.
In June 2006, Moore assembled a group of executives representing different parts of the company, "locked them in a room" for two days and asked them to come up with a list of must-haves for the new system.
The initial list of 50 was later distilled to 10 and Moore took the shopping list to the market early last year.
By March the company had selected Pronto Software's hosted software-as-a-service retail POS. The following August the company started shifting to the centralised system, which required a telecommunications upgrade to support a fleet of thin clients deployed across its stores.
Moore says the cost of the project was close to $1 million for Pronto but estimates the shift to a hosted system immediately saved Kathmandu $250,000 in hardware costs and more in ongoing maintenance fees.
The system got off to a slow start - so slow that Kathmandu almost had to consider starting over again, Moore says.
The terminals were extremely slow to process transactions and nobody could understand why.
Pronto Software sent in technicians to investigate the problem and found that Kathmandu's retail network was being over-taxed by the terminals' graphics system and some excessively enthusiastic Eftpos equipment, with which they were competing for bandwidth.
"That caused a number of challenges.
"It was really at the point where it was not actually working. Had we not been able to improve it there would have been some hard decisions to be made," he says.
Pronto overcame the problem by reducing the graphical demands of the terminals' interface.
Since then the company has opened 72 stores across Australia and New Zealand and its retail system can cope with about 50,000 transactions daily.
It also is able to scale the system to handle 250 stores should the retail chain pursue an acquisition strategy.
The problem:Kathmandu's retail POS system was over-extended, unable to match the retail chain's growth, and its maintenance costs were becoming prohibitive.
The process:
The company started from scratch with a new system based on input from all parts of the business.
The result:
The distributed retail system was replaced with a software as a service hosted system which, after a slow start, now handles sales peaks of 50,000 transactions daily.