Ruby Tuesday's Distributed Capture Conquest

When is the last time you calculated how much shipping charges cost your business? If it's been a while, do yourself a favor and pay a visit to your corporate mailroom. How many overnight packages are you sending out a day? How many are you receiving from your branch offices? You may be shocked by what you find. Ruby Tuesday certainly was.

In 2004, Nick Ibrahim, senior VP and CTO of the restaurant chain, walked by the mailroom of Ruby Tuesday's corporate office in Maryville, TN and was staggered by the sight of hundreds of FedEx boxes stacked to the ceiling. "At the same time every week, each of our more than 900 restaurants collected all their weekly invoices and shipped them overnight to our corporate facility for processing and posting to our SmartStream accounting system," says Ibrahim. "This not only inundated our mailroom with more than 900 packages the next day, but when I conservatively calculated the cost of each package, I estimated that this activity was also costing us more than $9,000 a week in overnight shipping charges."

In addition to the shipping costs, manually keying paper invoice information from all restaurants into the corporate accounting system required a staff of nearly 70 data entry clerks, auditors, and accounts payable (AP) personnel. Furthermore, this manual process frequently took as long as six days to complete, delaying the time frame in which each regional restaurant could view accurate profit and loss information for its location. Finally, each of these invoices is required to be retained for a period of seven years, and this quickly became a physical storage nightmare for Ruby Tuesday's corporate office.

In an effort to free up storage space, Ruby Tuesday initially installed high-volume scanning devices in its corporate office and began scanning all incoming invoices into an electronic archive that resided on the restaurant chain's corporate SAN (storage area network). While scanning invoices on the back end of the invoice process helped address the storage issue, it didn't reduce the shipping and labor costs the company incurred. "Scanning all invoices at corporate actually added to our labor demands because we had to designate eight people solely to the imaging process," adds Ibrahim.

CENTRALIZED SCANNING CAN REVEAL DISTRIBUTED CAPTURE OPPORTUNITIES
Centralized scanning may have provided Ruby Tuesday with only limited value, but this initial imaging deployment ultimately led the company to uncover a way to use document capture technologies to ease all of its identified pain points. In 2005, InfoTek, the regional document management solutions provider Ruby Tuesday partnered with for the centralized scanning application, informed the restaurant chain about advancements in distributed capture. Specifically, InfoTek showed Ruby Tuesday how Web-based capture software would allow the company to install small desktop scanners at each Ruby Tuesday location, allowing each restaurant manager to scan documents daily and transmit them to corporate via the Web as opposed to shipping them via FedEx.

Ruby Tuesday was intrigued by the concept, but initially anxious about the significant up-front capital costs involved in deploying a distributed capture solution. "Implementing a distributed capture system meant purchasing more than 900 document scanners so that each of our restaurants could have one on-site," says Ibrahim. "We're not talking about a $90 scanner that you purchase at Best Buy, either. The scanners for this deployment had to be business-grade and capable of reliably handling multiple documents on a daily basis. These scanners also had to offer ISIS and TWAIN driver compatibility so they could work with distributed capture software platforms. Devices in this class typically cost between $800 and $1,200 each. I was nervous about this expenditure at first, but when InfoTek illustrated the cost savings that we could realize long-term by bringing the scanners to the paper, as opposed to our existing approach, I was convinced the investment would be worth it."

After testing approximately a half-dozen scanners for durability, jam frequency and recovery, and ease of use, Ruby Tuesday's quality control department suggested the company use fi-5120c document scanners by Fujitsu Computer Products of America for its distributed capture deployment. On the capture software side, Ruby Tuesday decided to implement Cardiff TeleForm based on the platform's Web capture, security, and customization capabilities (see sidebar).

CONQUER DISTRIBUTED DEPLOYMENT CHALLENGES WITH REGIONAL PILOTS
Ibrahim soon realized that selecting the technology components for Ruby Tuesday's distributed capture solution was the easy part. The company faced a whole new series of challenges when it came to actually deploying, installing, and implementing the technology. The biggest challenges revolved around the sizeable number of widely dispersed locations Ruby Tuesday was dealing with. First, the company had to distribute a document scanner to each of its more than 900 restaurants and ensure it was installed properly. It would be ineffective and time-consuming to send corporate IT personnel to each restaurant to install the scanners. Instead, Ruby Tuesday had to make the task easy enough for each restaurant manager to perform themselves. The company devised a color-coded cabling system to aid with this process. For example, blue USB cords were purchased for printers, black cords were for routers, and red cords were designated for the document scanners. These color-coded cords were shipped with each piece of equipment, and color labels were placed around the corresponding ports on the back of each restaurant's PC. All the restaurant manager had to do was plug the cable into the port of the same color to establish a successful connection. Ibrahim ensured that each restaurant had an established account on the Web-based Cardiff TeleForm capture software so the scanner would be automatically detected by the software as soon as the connection was made.

Another challenge Ruby Tuesday faced was end user training. Each restaurant employs four managers — that's more than 3,600 employees the company had to train to use the system. Again, deploying IT personnel to conduct face-to-face training was problematic and expensive. Instead, Ruby Tuesday opted for online training. To ensure the online training course it created achieved desired outcomes, Ruby Tuesday piloted the course with restaurants in close proximity to the chain's corporate office in Tennessee. "By piloting the online training tool with a handful of restaurants first, we received valuable employee feedback that allowed us to perfect the course before we launched it enterprise-wide," says Ibrahim. "Plus, given the fact that these pilot restaurants were in close proximity to our headquarters, corporate IT employees could quickly and affordably go on-site to these restaurants to address any major issues with the online training tool."

DISTRIBUTED CAPTURE PAYS FOR ITSELF IN 18 MONTHS
Even though Ruby Tuesday established effective tools for enterprise-wide deployment of its distributed capture solution, the company knew it was impractical to believe that it could simply flip a switch and have all of its restaurants up and running on the new system in unison. "We decided to deploy the system incrementally by geographic region," says Ibrahim. "This approach kept the problems corporate IT employees had to field to a manageable level while allowing us to ease our accounts payable personnel into using the new system, rather than bombarding them with a whole new way of processing all invoices overnight. This approach also helped promote user adoption. Once one restaurant became comfortable using the distributed capture system, it relayed the benefits to other restaurants via word of mouth. Before we knew it, restaurants that had yet to deploy their on-site scanning solution were begging us for the technology."

It took Ruby Tuesday approximately six months to get all of its 900-plus restaurants up and running on its distributed capture solution. With the new system, each restaurant manager now scans their invoices on-site every night. These images are then electronically transmitted to Ruby Tuesday's corporate office instantly using Cardiff TeleForm's Web capture feature. The images are grouped into batches, and each batch is assigned to a data entry clerk in Ruby Tuesday's corporate AP department. Each data entry clerk has two computer monitors — one screen displays the images captured by the TeleForm software, and the other displays the company's SmartStream accounting system interface. The TeleForm software actually recognizes essential and consistent information from each paper invoice (e.g. customer name, vendor number, PO number) and automatically displays the corresponding record in the SmartStream system for manual revisions and updates. The data entry clerk then manually keys the new or variable information contained on each invoice (e.g. dollar amount, date, invoice number) into the SmartStream system using the document image displayed via the TeleForm application.

The benefits of Ruby Tuesday's new distributed capture system are unmistakable. First, the company has completely eliminated the overnight courier costs associated with shipping paper invoices — a figure that equates to nearly $500,000 annually. Second, the new electronic method of batching, distributing, and keying invoice data has increased the productivity of the corporate AP staff. "Under our old paper-based method, each data entry clerk could only handle the invoice processing responsibilities of 20 restaurants," says Ibrahim. "With distributed capture, a single data entry employee can now perform invoice processing for as many as 42 restaurants. As a result, we have been able to reduce headcount in the AP department by nearly 50%. Furthermore, the speed with which we can process these invoices means we can close the books for the week the day after we receive invoice images, as opposed to six days later."

These quantifiable benefits allowed Ruby Tuesday to achieve a full payback on its rather sizeable technology investment within 18 months. After witnessing the success capturing invoices remotely could bring, Ruby Tuesday is now using its distributed capture system to transmit documents for human resources (e.g. W-2 forms), customer comment cards, and other company documents as well. Ruby Tuesday also continuously tests the read accuracy capabilities of unstructured OCR (optical character recognition) software packages. The restaurant chain hopes to one day embed this technology in its distributed capture system and enhance the solution's effectiveness by enabling the automated capture and population of variable invoice information, thus eliminating all manual data entry.

It's amazing to think that this cost-saving technology implementation was all born out of a simple visit to Ruby Tuesday's mailroom. What process inefficiencies will your mailroom reveal?