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Ruby Tuesday

By Baselinemag  |  Posted 2006-10-15 Print this article Print

Chesapeake Energy, Ruby Tuesday and others explain why they made the rankings.


Ruby Tuesday: Turning The Tables Headquarters: Maryville, TN

2005 revenue: $1.1 billion

2005 net income: $102 million

Nick Ibrahim added a missing ingredient to Ruby Tuesday's operations: aligning information technology with the way the casual dining chain does business.

When he joined as chief technology officer in July 2001, Ibrahim found a decentralized network of restaurants—about 525 at the time—that operated as their own entities. Over the next five years, Ibrahim and his team standardized technologies across the disparate restaurants—now more than 880—implementing systems that created efficiencies in financial reporting and customer service, not to mention helping a cook prepare the perfect dish.

And the strategy has produced some mouth-watering results: With a five-year Information Productivity average of 117%, Ruby Tuesday tops this year's Baseline 500 food and beverage category, besting Sonic, Anheuser-Busch and Applebee's.

To get there, Ibrahim had to overcome a number of obstacles. The first was updating the chain's stale financial reporting system. Each week, the individual establishments would send paper invoices via FedEx to corporate headquarters. There, the data was keyed into the enterprise resource planning system to run financial statements. Ibrahim says the process could take a week or more.

So, he installed document management tools from EMC and Cardiff Software that connected every point of sale to Ruby Tuesday's payment functionalities. Now the chain's restaurants enter data each day, with the information routed to headquarters every 15 minutes. The system eliminated the need for FedEx—and helped Ruby Tuesday create more timely financial reports.

Next, Ibrahim and his team implemented business intelligence tools from Cognos and Hyperion—and changed the way the chain measured performance. Instead of focusing on dollars spent at the restaurants, Ibrahim and his team began gauging how many customers the establishments could serve during the business day.

Ruby Tuesday first had to see how many tables each restaurant offered, and how long customers occupied a table on average. "Based on how big one place is, it's not fair to look at profitability without looking at turning over the tables," Ibrahim says.

To do that, the chain used the business intelligence tools to measure the time between when a guest ordered a meal (at which time the server would open a check in the point-of-sale system) and when the customer paid the bill and closed the transaction.

On top of that, Ruby Tuesday deployed a kitchen management system from QSR Automations that served as an alarm clock of sorts for cooks. Ibrahim and his team programmed in the average preparation times for each dish, so if a couple ordered two entrees with different cooking requirements, the system would alert the cook to begin the longer-preparation dish first and then ping again when the second dish should be started.

That, Ibrahim says, eliminated the need for a manager in the kitchen. "That's one manager for every location, for three shifts, seven days a week," he says. (He would not provide specific cost savings from the reduced head count.)

And by more closely monitoring seating length and food preparation times, Ruby Tuesday has cut the average time a guest spends at a table from 55 to 45 minutes.

Now Ibrahim is working on an appetizer to Ruby Tuesday's table-turning evaluation: Instead of opening the bill when a customer orders, the hostess would start the bill when the guest is seated, yielding a clearer measurement of average seating times.

Implementing these changes, Ibrahim says, helped the technology staff prove its value to the business: "We convinced the operators that we are really the backbone for them." By Brian P. Watson

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