Case study: Broadband — a therapy for retail

28 Nov 2005

There are some businesspeople who question what broadband can possibly do for them, but Mark Gould is not one of them. The managing director of Hughes & Hughes has witnessed the dramatic impact it has had on his retail operation in the past two years.

The bookseller — which has 180 employees and 15 branches across the country — has always prided itself on its customer service. In the past, if a customer couldn’t find the book they wanted, staff would search a CD-Rom-based book database, a fresh version of which was supplied by Hughes & Hughes’ book distributor on a monthly basis. When the internet came along, staff were able to dial up and connect over the web direct to the distributor’s online catalogue. The change was very welcome from a customer service viewpoint, but it had its drawbacks.

“We were finding that while it improved our customer service immeasurably, the downside was the connection was very slow on dial-up and the costs were escalating,” says Gould, who notes that not only was the internet being used a lot but staff would understandably sometimes forgot to shut down the connection afterwards, which with metered internet access is a costly mistake.

Adding to the bill was the daily upload of sales data to the company’s head office in Swords, Co Dublin and, similarly, the upload of data to Nielsen Bookscan, a research firm that compiles the bestseller lists based on the sales data it receives from booksellers across the country.

With costs mounting, Hughes & Hughes soon realised that DSL — a flat-rate broadband internet product — would resolve these issues. Not only would the connection be faster, the company would pay a flat fee each month, which would cap its data costs.

Enter OmniSys, a Meath-based firm used by Hughes & Hughes for general IT support. Choosing business internet service provider Netsource as its broadband partner, OmniSys installed broadband connections in all of the retailer’s 15 outlets nationwide. The impact was immediate. “It wasn’t until we replaced dial-up with broadband that we realised how much money we were wasting on telecoms. We have saved somewhere in the region of €25k per annum on these costs alone,” Gould remarks.

While these savings were obviously reason enough to adopt broadband, it soon became clear that there were a myriad of other applications that could sit on top of the broadband network. A desire to enhance company-wide communications led Hughes & Hughes to migrate from a standalone electronic point-of-sale (EPOS) system to a centralised virtual private network. On top of this, a system was set up whereby maintenance and support engineers from the EPOS supplier, a UK-based system, could instantly access the system over broadband instead of dialing into it, as they used have to do.

On the security front, the company decided to replace its existing CCTV security system with internet protocol (IP) video monitoring. OmniSys installed IP cameras that sit on the Cat 5 cable network, allowing management to view their shops live remotely over the Netsource broadband connection. The system has been installed in four outlets so far as part of a company-wide rollout.

As Colin Whelan, managing director of OmniSys, explains, the system is not as bandwidth intensive as might be expected. “The system can work adequately on a 128Kbps connection, but works better with faster broadband speeds. However, the camera is not taking up bandwidth all the time; it will only take up bandwidth when you’re using it remotely,” he explains. The rest of the time the cameras are recording footage for security purposes in the normal way.

With voice over IP (VoIP) becoming increasingly common in business, Hughes & Hughes is also in the early stages of installing a VoIP system that will allow free site-to-site phone calls. OmniSys is currently testing routers that will open a secure internet ‘tunnel’ from one site to another. The plan is that the system will be integrated with the company’s existing private branch exchange switches. This will allow staff to make VoIP calls using their existing telephones — they will just need to dial a short code first. Hughes & Hughes expects that VoIP will allow it to control its phone bill in the same way that broadband allowed it to cap its data transmission costs.

Hughes & Hughes’ innovative approach to technology demonstrates that you don’t have to be a high-flying e-tailer or large IT firm to deploy cutting-edge broadband applications. You don’t even have to have your own IT department — you simply find a good IT partner that can do it for you. As Gould puts it: “We see OmniSys as our virtual IT department. We don’t want to get bogged down in technology; we’re retailers at the end of the day.”

Pictured (from left): Colin Whelan, sales director, Omnisys; Louise McKeown, sales and marketing director, Netsource; and Mark Gould, managing director, Hughes & Hughes

By Brian Skelly