HANNAFORD USES IP PHONES AS TIME CLOCK

MICHAEL GARRY

SCARBOROUGH, Maine - In what may be a first for the retail industry, Hannaford Bros. here has installed a time-and-attendance application on Internet Protocol telephones in a store in Westbrook, Maine, replacing conventional time clocks used by hourly employees.

Hannaford is installing IP phones from Cisco Systems, San Jose, Calif., in new stores as well as existing stores that require phone upgrades. IP phones leverage data networks to transmit voice, fax and other information traditionally carried over public telephone networks. The process is also known as Voice Over Internet Protocol.

The IP phones, in addition to serving in a conventional telephony role, can also perform as high-speed minicomputers that Hannaford plans to use for time-and-attendance and a host of other applications, according to Bill Homa, the New England chain's chief information officer. "We can put the same applications on IP phones that we have on a Symbol handheld device," he told SN, speaking recently via an IP phone from Hannaford's headquarters to a Cisco-hosted media event in New York. In both cases, employees can have "access too company information while in the aisle," he said.

Hannaford currently has IP phones installed in 15 stores, including the Westbrook store, and plans to have them in 25 stores by the end of the year. Each store is equipped with about 15 IP phones, some of them mobile units. The phones are also in three distribution centers and a call center, and Hannaford is close to deploying 1,000 IP phones at its corporate headquarters. Hannaford operates 147 supermarkets in the Northeast.

The time-and-attendance application, from Kronos, Chelmsford, Mass., is the first application Hannaford has installed on IP phones. Homa said it will go into the other IP phone-equipped Hannaford stores, though he did not provide a time line. To identify themselves, employees enter a personal identification number and swipe a badge in a reader attached to the phone. For "another level of security," Hannaford plans to install a biometric reader that would scan employees' fingerprints by the end of the year, he said.

So far the time-and-attendance application, installed in Westbrook for about four months, is "working great," Homa said. "It's doing what we want it to do." An effort was made, he added, to make sure the application is "resilient" in a high-usage retail setting. Because the application is available on 15 IP phones rather than five time clocks, employees have easier access to it, improving productivity, he said.

Homa mentioned several other applications that could be installed on the IP phones. For example, computer-assisted ordering, which is used in 50 Hannaford stores, issues alerts to employees when it detects out-of-stocks on shelves. "It would be great to use IP phones for alerts," he said. The chain is also implementing a task management application, from Reflexis Systems, Norwood, Mass., that assigns tasks to employees and requires confirmation of completed tasks. "Employees would be able to get their day's assignment via the phone," he said.

Remote Control

Hannaford's IP phones use the company's intranet to send calls between stores and between headquarters and stores, avoiding public toll charges; otherwise, they tap into public phone networks. IP telephony allows Hannaford to change phone extensions at stores remotely, without having to send a maintenance person. In addition, the retailer has programmed its IP phones at stores to automatically provide store hours, taking care of about 60% of incoming calls.

Hannaford does not currently plan to replace existing digital phone systems with IP telephony, except in stores that require phone upgrades. That could change, however, if two to three applications are successfully implemented on the phones, thereby building a financial justification for replacing existing phone networks. IP phone systems cost about the same as digital systems, Homa said.

IP telephony is still not widely deployed by retailers, though "many of our [retail] clients are investigating it," Rob Garf, an analyst for AMR Research, Boston, told SN earlier this year. Some observers argue that digital phones are less costly than IP phones and offer similar capabilities, but Homa defends IP telephony. "I think the cost is a wash and IP phones are much more powerful and easier to manage centrally," he said. "It's a no brainer to go IP."

Homa said Hannaford's Westbrook store, which has been using IP phones for about three years, was "one of the first retail stores to use Cisco IP phones. We helped Cisco with feedback about what was different about using the phones in retail stores vs. branch offices," he said.