News

To catch a thief with BizTalk Server 2004

• By Rich Seeley
• March 10, 2004

Watching the detectives may be fun on TV, but human detection is "not very productive" when it comes to stopping retail theft, according to Steve Winningham, senior vice president of IT at Virgin Entertainment.

At the launch event this past week for Microsoft's BizTalk Server 2004, Winningham explained how his company uses technology to help catch employees stealing from the 23 Virgin Megastores in the U.S.

Shoplifting is not a petty crime in the retail business, he told an audience in Mountain View, Calif., as part of a Webinar broadcast produced by Microsoft. Winningham cited estimates that retailers lose $31.3 billion annually to in-store theft and half of it is suspected to be the work of sticky-fingered employees.

Store detectives playing I-Spy around cash registers weren't doing much for loss prevention as it is known in the retail trade, said Winningham. So Virgin contracted with Xavor Corp., an Irvine, Calif.-based systems integrator, to develop a software beat cop.

The application uses BizTalk Server 2004's real-time integration capabilities linking point-of-sale systems to a BAM system that alerts store security when an employee does something suspicious, explained Ammara Masood, Xavor's senior vice president.

There were three things that were key in implementing this solution for the loss-prevention department, said Masood. The first was the business process orchestration engine that provided users with "the ability to do real-time integration with point of sale, as well as with the AS/400 [back-office] systems," she noted. That technology "provided the ability to make it more meaningful by grabbing the right information from these two systems and putting it in front of the loss-prevention managers."

The second component, said Masood, was "technology that was applied for business activity monitoring [BAM] that leveraged the BizTalk infrastructure for BAM and [allowed] the loss-prevention department to analyze and trend the information not only on a real-time basis but historically." This allowed the loss-prevention department to identify the thefts that were taking place as well as the suspicious employees who were doing it repeatedly.

The third component was "the business rules engine that let us integrate and monitor business activity on a real-time basis and that allowed the loss-prevention agents to be alerted [via] pagers or cell phones whenever there was suspicious activity," she explained.

Suspicious activities include discounts and cash refunds that exceed normal standards and may indicate fraudulent activity, according to the video Microsoft produced on the Virgin application. Security personnel are alerted within minutes of an out-of-line refund and can then begin investigating what the employee was doing.

Virgin Entertainment's Winningham said the application was conceived in August 2003, completed in December and implemented in January of this year; it is already credited with a 50% improvement in fraud detection.

BizTalk Server 2004, part of Microsoft's "smart and connected enterprise" product line, is currently available for evaluation and will be generally available in April, said Ted Kummert, Microsoft's vice president of e-business servers.