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Upgrading, One Step At A Time

7-Eleven can tailor orders by store, town, and region using its retail information system, the first part of a five-year agreement with HP.
Top-selling products in New York 7-Eleven shops may not be the same as in Texas. Now, thanks to the latest step in a multiyear IT effort, managers can stock shelves based on their specific customers'--rather than Texans'--tastes.

7-Eleven recently installed Hewlett-Packard servers and networking switches in each of its 3,300 franchise-owned stores and 2,500 company-owned stores. The rollout, which took place during the last eight months, is part of a five-year, $55 million agreement between the retailer and HP aimed at supporting 7-Eleven's Retail Information System, a product traffic-management process that lets stores reorder inventory based on their needs.

Early on in the installation, HP and 7-Eleven ran a pilot program in the Dallas area using an HP ProLiant ML330 server running Microsoft Windows Advanced Server 2003 and an HP ProCurve Networking Switch. The store equipment communicated with the company's data center in Dallas to track inventory and make specific update requests.

7-Eleven also installed an internally developed software program for fresh-food management and in-store computer-based training for employees, and an HP program for proactive monitoring of in-store peripheral devices.

Once the pilot proved successful, it was used as a blueprint, and HP's services staff began installing the systems during the off-peak hours of midnight to 5 a.m. in as many as 90 stores in a single night, according to Robert Corbett, director of retail-industry solutions at HP. The new equipment provides ready access to inventory data and other information, a process that might have been more cumbersome in the older, more proprietary system, he says.

7-Eleven's HP systems give it 'base capabilities' for changing needs, CIO Keith Morrow says.

7-Eleven's HP systems give it "base capabilities" for changing needs, CIO Keith Morrow says.
With its infrastructure in place, 7-Eleven is already making plans for additional IT upgrades, says CIO Keith Morrow. The next step will be the installation of two wireless, custom-designed mobile devices similar to PCs. The devices will let personnel make instant ordering decisions on the floor or watch training videos, for example, while standing right next to the store's Slurpee machines.

7-Eleven is negotiating with vendors on the mobile systems' design and delivery and expects to have a pilot program by the end of year, with full-scale deployment scheduled for 2005.

The work with 7-Eleven is part of an overall retail-industry thrust that has been emphasized at HP over the past year, says Leigh Morrison, HP's VP of retail industry solutions. As an example, HP is installing 16,000 point-of-sale terminals and 2,000 servers at Publix Asset Management Co.'s chain of grocery stores. The effort leverages a "retail-hardened" PC that's enclosed in a metal case and includes a five-year warranty, much longer than the eight- to 12-month warranties generally associated with PCs. "They can't afford to go out and replace a point-of-sale terminal every eight months," Morrison says.

The new HP server and switch platform gives 7-Eleven a flexible infrastructure that can adapt to the changing needs of its customers, Morrow says. "What's convenient today for customers is going to be different tomorrow," he says. Already, he adds, 7-Eleven is starting to see more demand for payment alternatives using smart cards and radio-frequency identification. "We feel we now have the horsepower and base capabilities for a number of years to come."