1. Improving your Audit Process Through Technology Christopher McDonald Director of Field Loss Prevention, Babies R’ Us Inc.

2. Premise for Discussion The Audit -Examination / survey / review / assessments -Safety / standard operating procedures / Risk assessment / financial review Audit Purpose -Compliance / monitor standards -Train / educate / Awareness -Internal / external exposure

3. Goals of Today’s discussion -Why audit automation? -Review a current system in use today -Structure -Practical applications -Selling the need for Technology -Challenges and benefits of implementation

4. The Need for Technology – Common Points of Pain Duplicated efforts of data collection Unorganized data Too much data Inability to obtain timely and current data Lack of resources to correlate information No / limited view of store / district / regional / global compliance Varied audit processes

5. Real World / Old School Auditor completes manual audit – pencil & paper or soft copy Manually submitted – via hard copy / e-mail / etc. Data collected / assembled by Auditor or Administrator Collaborative data assembled manually for trends (repeated x times for each audit completed) Summary and detail reports created for review and analysis Questions are asked that reports did not address Process complete for this cycle – begins again

6. Babies R’ Us “LP / Ops Audit Program” Palm Pilot / Web based program Store level compliance program administered by field LP Compliance / Training tool Review of operations / cash controls / safety Stores audited 2 times per year 4 years in use Reviewed and revised annually

7. The Application LPM Conducts Audit Audit is uploaded via Palm to the web E-mail notifications sent to store / LP / DM / etc. Data captured within the site for future review / use / analysis Fun with Data!

8. And the Fun begins… Report Types Main Audit Page has 2 levels; Summary and Detail. Also note the ability to sort by date range.

9. Overview of all 3 BRU Regions – click on a region Able to print and export data from all screens

10. District Level view – to see store level click on a district number

11. Store level view – to see a specific store’s audit click on the store number

12. Overview by section for a district

13. Audit detail: Store information Questions and compliance

14. Question scores for the entire company – sorted in descending order

15. Selling the program to the users Removes the paper Eliminates manual /duplication efforts Saves time Eliminates error (data entry) Ancillary benefits of the device Standardizes the process

16. Selling the program to the Executive Team Greater productivity Ease of use Convenience Increase ROI Enhance awareness Enhance compliance Maximize Focus Real time Access to data Flexible Features Audit Solutions apply to your organizational partners: –Loss Prevention –Operations –Safety / Risk Management –Human Resources –Store Planning

17. What to look for… Timely insight to store level compliance –Able to drill / mine for various data Efficient data collection / organization / security Ability to export manipulate data Flexibility for your purposes and that of your organizational partners Simplicity in managing the program

18. Initial challenges Budget Constraints –Prepare an accurate ROI analysis Labor / re-allocation of labor Positive re-investment of time –Talk to your MIS group about an in-house development Intranet applications Lap top based –Ancillary device benefits PDA functions Cellular phones cameras e-mail functionality

19. Initial challenges Alternatives –Existing Microsoft programs can bridge a gap Inquisite Surveys Excel programs Web based surveys Obtain a Partner –Share the costs with another department who may have similar needs and wants Human Resources Risk Management Store Planning

20. On-going Challenges Keeping up with technology –OS platforms versus Windows –Device or web based –New user device technology Keeping the program current –Updates and awareness to business partners –Updates to the audit program itself

21. Questions Christopher McDonald Babies R’ Us Inc. Director of Field Loss Prevention 770-898-5815 ext. 3492 e-mail - mcdonalc@toysrus.com Contact Information