The Problem

A small regional 10-Store retailer was experiencing higher than industry average cashier turnover leading to higher training costs and unrest within the cashier ranks. One factor identified was turnover from cashiers with repetitive money shortages in their tills.

The chain was facing a union contract renegotiation and an issue of the union was till accountability because the current process did not have a "fool-proof" till counting procedure that ensured 100% cashier accountability and certification of all funds. The union was desirous of forcing joint cashier/office till counts every time the till was placed in the office. Tests of the requested process changes added 20-minutes per day to a typical shift for both the office and cashier.

The chain was looking for ways to cut costs to meet ever increasing non-union retailer encroachment and adding costs was not an option. Therefore, financial budgetary constraints were an issue that RSS needed to resolve. The need to cut cost was counterproductive to an investment in new technology at this time. Further discussions with senior management identified that if the pilot verified substantial ROI and quick payback AND a net positive cash flow by year end -- funds could be allocated. The anticipated employee morale improvement during negotions was an added opportunity for the chain.

RSS Consultative Action & Recommendations

RSS proposed that the retailer add The Banker and re-engineer the process for counting money. The new process would provide a receipt of the funds as part of The Banker's normal operations when counting down tills. Cashier's would have access to The Banker to verify the count to provide confidence that the till was correct. Some minor re-engineering of the cashier till counting area relative to the office provided that opportunity.

The pilot proved hugely successful. The Banker provided less first count errors, more accuracy and fast verification and accountability for till funds. The Union approved the process after the pilot project was certified as fair and unbiased because the cashiers could quickly verify their till at any time. The pilot found additional savings from cash shortages because the process provided an easy to follow audit trail of funds. Many of these savings were left as upsides to the investment and are not presented in the final ROI results.

RSS provided a complete turnkey services proposal that would develop the ROI spreadsheet, manage the pilot (the existing staff was focused on other cost cutting initiatives), prove the concept and rollout the solution. The charter was to fund the project with hard ROI savings that were measurable -- leaving soft savings as subjective upsides to the investment. If the project could demonstrate a net positive cash flow, the project would be financed in a leasing agreement to match cost with positive measurable savings. The added cash of a positive cash flow would help the company with with its competitive response. The union must also approve the process change during the upcoming contract negotiation.

ROI Analysis and Project Plan

Working with a minimal amount of time with key individuals, RSS was able to develop a specific ROI spreadsheet to measure the cost and benefit variables. A complete project plan was developed that would use existing store trainers to rollout the solution minimizing implementation costs. Automated self-instruction training programs provided complete training -- eliminating trainer costs and providing a tool to simplify training and document cashier understanding of cash counting processes. The technology was blended with a re-training of cashiers and office personnel to improve and document understanding of existing policies and procedures. Management was required to also train to reinforce policy and eliminate inconsistencies in handling cashiers in all the stores.

Management signed off on the calculations, goals and project plan and the pilot was set. The project met the financial benchmarks and the retailer purchased The Banker for rollout to all stores. RSS provided training design services to facilitate the rollout and to ensure the continued success with replacement cashiers. These services were provided via small project oversight consulting agreement. A small cost for the existing team to verify the project milestones was incurred by the chain -- but RSS minimized these impacts with a rigorous and efficient review process. This ensured that the implementation would provide acceptable new policies and procedures. The pilot documented the expected ROI and payback and HR documented lower turnover and higher employee morale via a before and after survey,

Improved cashier and union relations were a huge upside to the investment...PRICELESS!

ROI Study Parameters:

Before and After Analysis -- RSS documented the retailer's current procedures, costs and variations between stores to compare against The Banker's expected benefits.

The ROI was substantial enough for senior management to go ahead with the pilot -- where the expectations were measured and verified. As expected The Banker met all hard savings and soft savings goals.

Subjective Methodology -- A provision was made for management to "subjectively" mitigate risk risk by entering a percentage of risk into the spreadsheet. Management selected 90% savings attainment using a 10% hedge against any risk calculation and agreed that if the ROI was positive they would move forward.

Soft Savings Handling -- There were a number of hard-to-measure but intuitive soft savings that were left as upsides to this already conservative ROI evaluation.

Contact Ed Oertli President of RSS for your free ROI consultation analysis at:

(904) 610-2629 or email Ed at: eoertli@prodigy.net

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