The 2016 Smart Decision Guide to Restaurant Management … · New restaurant management and POS systems are having a profound impact on business operations, guest satisfaction , revenue

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Everything you need to know about next-generation food and beverage service technologies – and how to select the right ones for your business.

The 2016 Smart Decision Guide to Restaurant Management and POS Systems

TM

Independently produced and distributed by:

Underwritten, in part, by:

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Introduction pg. 3

Chapter 1: Topic Overview and Key Concepts pg. 5

Chapter 2: Buying Considerations and Evaluation Checklist pg. 14

Chapter 3: Must-Ask Questions pg. 22

Chapter 4: Roadmap and Recommendations pg. 27

Chapter 5: Inside Voices and Outside Voices pg. 31

Appendix pg. 34

The 2016 Smart Decision Guide to Restaurant Management and POS Systems Entire content © 2016 Starfleet Media. All rights reserved. Unauthorized use of reproduction is prohibited.

Table of Contents

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Introduction

New restaurant management and POS systems are having a profound impact on business operations, guest satisfaction , revenue growth and profitability.


Restaurant operators often speak of innovation in terms of putting new

signature dishes and food creations on the menu. But where the biggest

innovation is happening today, arguably, is less on the menu and more in the

technology that is driving increased efficiency and effectiveness across all

parts of the food and beverage services industry. Next-generation restaurant

management and POS systems are having a profound impact on business

operations, guest satisfaction, revenue growth and overall profitability.

These advanced technologies are bringing more change to the industry than

anything since the 1980s, when restaurant operators shifted from cash

registers to POS terminals. The technologies encompass both software and

hardware — most notably, the introduction of tablets. Whether standard-

issue, all-purpose models or devices specialized to the task at hand, tablets

make it possible to put full POS terminal functionality in the palms of servers’

hands. According to research conducted for this Smart Decision Guide, more

than three-quarters (78%) of restaurant operators cite the benefits of POS

mobility as the top reason to upgrade their technology capabilities.

Yet the benefits of POS mobility is certainly not the only reason that so many

restaurant operators are upgrading their capabilities. The growing need to

accept new payment methods , including chip credit cards and e-wallet apps,

also ranks as high priority in many peoples’ minds. The need to comply with

new data security requirements is another compelling reason that so many

restaurant operators are making the leap to a next-generation system.

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Introduction

Today, restaurant operators have a vast array of compelling reasons to upgrade their technology capabilities from an antiquated and underperform-ing system.


So, too, are the benefits of migrating from on-premise installation to cloud-

based deployment. In addition, many restaurant operators are drawn to the

improved user interfaces — and increased flexibility and customizability —

that have become the hallmark of next-generation solutions.

For some restaurant operators, the biggest selling points are improvements

in features and functionality. These improvements are evident in the

expanded ordering and payment processing capabilities. They are evident in

the built-in inventory control and labor management capabilities. In some

cases, they are evident in the marketing , guest relationship management and

loyalty program management capabilities. Just as important to many

restaurant operators are the robust data analysis and performance reporting

capabilities that many solutions now offer and which can help them better

manage their operations and identify more opportunities for improvement.

In summary, restaurant operators have plenty of reasons to want to migrate

from a legacy system that may be lacking in multiple areas to a state-of-the-

art system designed to meet their needs now and into the future. For those

grappling with payment processing and security deficiencies, the need may

be urgent. This Smart Decision Guide offers a roadmap to success for both

new and existing businesses. It includes insights for evaluating different

solutions and practical guidance for making the right selection based on their

individual priorities and requirements. It also includes pointers for

maximizing the value of the investment once the system is implemented.

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Topic Overview and Key Concepts

Chapter 1


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The food and services industry as a whole is undergoing a seismic shift in terms of enabling greater staff productivity, operational efficiency and overall guest satisfaction.

Chapter 1: Topic Overview


Before the rise of cloud technology and POS mobility, and before the advent

of new payment processing methods , technology change came slowly for

restaurant management and POS systems. That is not to say that there weren’t

significant advances in capabilities in the years and decades since stationary

POS terminals fundamentally transformed the way food orders were taken

and sent to the kitchen. There were, in fact, many notable advances. A good

example is the introduction of integrated inventory management capabilities.

Yet such advances tended to have relatively little impact on the issues that

keep so many restaurant operators up at night. Such issues tend to include

the need to drive revenue growth and the need to mitigate staff and process

inefficiencies and, often, reduce slow table turnover rates, which can result in

loss revenue. No wonder, then, that, until recently, many restaurant operators

may have felt hard-pressed to justify the investment in a new system.

That all changed with the rise and proliferation of next-generation systems.

The evolution of these systems has progressed rapidly over the past few years,

bringing dramatic change to restaurant operations. Indeed, the food and

services industry as a whole is undergoing a seismic shift in terms of enabling

greater staff productivity, operational efficiency and overall guest satisfaction.

In fact, according to research conducted for this Smart Decision Guide, 73% of

full-service restaurants, and 57% of quick service and fast casual restaurants,

achieved “significant” or “dramatic” improvement in their operations and

revenue performance after having deployed a next-generation system.

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Every solution provider is moving fast and furiously to not only maintain competitive parity but also meet restaurant operators’ expectations of new technology.



The competitive environment has grown increasingly intense for solution

providers operating in this arena. By now, most of the well-established

providers of stationary POS terminals have expanded the scope of their

offerings to include cloud-based deployment, POS mobility and a plethora of

other next-generation capabilities. Some of these solution providers are

among those now leading the charge on technology innovation. Meanwhile, a

number of newer players have come onto the scene, most of them with tablet-

only POS systems tailored to different food and beverage service segments.

There has also been a significant amount of consolidation amongst technology

solution providers. Several large mergers have taken place in the past year

alone. Whether an incumbent or a newer player, virtually every solution

provider is moving fast and furiously to not only maintain competitive parity

but also meet restaurant operators’ growing expectations of the technology

capabilities. Today those expectations go well beyond merely being able to

accept mobile wallet and ensure EMV-readiness and payment security.

To that point, restaurant operators generally have two main objectives in mind

when it comes to any technology investment. The first objective is to

streamline operations. Here the goal is to increase employee productivity and

process efficiency, resulting in significant cost savings. The second is to

enhance the quality of the guest experience, leading to increased satisfaction,

loyalty, advocacy (including favorable reviews on Yelp and other popular

ratings sites) and, of course, revenue growth. The good news is that next-

generation systems can play a key role in achieving both these objectives.

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73%

86%

90%

93%

0 20 40 60 80 100

Improve data analysis and performance reporting capabilities

Improve staff productivity and streamline business operations

Meet new payment processing and compliancy requirements

Improve customer satisfaction, loyalty and positive word of mouth

Research Data Point What are the biggest benefits one can expect to gain with the right Restaurant Management and POS System?

Most restaurant operators today can make the business case for upgrading their technology capabilities

without much difficulty. The return on investment is clear. It can be measured in terms of cost reduction,

which is largely a function of increased staff productivity and resource utilization. It can also be measured in

terms of revenue growth. This is largely a function of improved guest satisfaction and, in some cases, faster

table turn times — and also, in certain venues, the ability to reach and serve a larger number of guests

simultaneously. The ability to improve financial performance with advanced inventory and labor

management tools and better performance reporting can help further justify the investment.

Reduce costs Increase revenue Increase profitability

Reduce payment processing time Reduce food order placement time Improve staff productivity

Improve customer satisfaction and loyalty Improve staff management and inventory controls Gain business intelligence Meet payment compliancy

Research findings are derived from the Q1 2016 survey on Restaurant Management and POS Systems.

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Faster order placement and pay-at-table processing , as well as more payment options, can remove some of the most common barriers to guest satisfaction.

Chapter 1: Key Concepts


There are a number of key concepts that restaurant operators should keep in

mind when researching next-generation restaurant management and POS

solutions. These key concepts include “must-have capabilities” necessitated by

new payment methods and security requirements as well as “nice-to-have

capabilities “ unrelated to “point of sale” such as inventory management and

employee management. Following are a few brief descriptions.

POS Mobility. According to research conducted for this Smart Decision guide,

almost two-thirds (63%) of restaurants currently host their POS systems in the

cloud, with an additional 31% planning to do so. The benefits include faster

speed and greater scalability as well as lower maintenance costs. The benefits

also include the ability to use mobile POS devices for order and payment

processing , which can be key to increasing revenue while also reducing

overhead costs in some restaurant categories. Consider the advantages that

table service restaurants enjoy when servers can place orders directly from a

tablet to the kitchen printer or display rather than from a stationary terminal

that may be a good distance away — and perhaps with obstacles blocking

direct access. Rather than having to wait in line to punch orders into a terminal,

servers can spend that time interacting with guests and attending to other

duties that enhance their dining experience. Faster order placement and pay-

at-table processing , as well as more payment options, can remove some of the

most common barriers to guest satisfaction. Importantly, these capabilities can

also enable a restaurant to turn tables considerably faster than before and also,

in some environments, reach and serve more guests at the same time.

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While mobile payment processing and EMV are taking off at the same time, it seems clear that mobile will become the preferred payment method over time.



Mobile Payment Processing. By now, most restaurant operators have

upgraded their restaurant management and POS systems to be able to accept

EMV payment processing capabilities and meet the compliancy requirements

that went into effect at the end of last year. Many operators are also now

purchasing hardware that can accommodate NFC payments for mobile.

Increasingly, guests want to be able to use their own smartphones with the

restaurant’s POS system. They want to be able to pay their bills with Apple Pay,

Google Wallet or Android Pay rather than with a debit or credit card. The fact

of the matter is that EMV payment processing tends to result in a suboptimal

guest experience. That’s because it not only requires greater effort but also it

has a significantly longer wait time than mobile payment processing (given the

need for the technology to rewrite the security transaction of the card). In fact,

EMV transactions where the guest inserts a credit or debit card into the POS

device typically take upwards of 15 seconds to complete. In some restaurant

categories (e.g., drive-thru windows in fast-food chains, where the key

performance metrics are tied to number of cars per hour and customer service

times), that length of time can be hard for operators to stomach. In contrast,

mobile payments typically require only a few seconds to complete. While

mobile payment processing and EMV are taking off at the same time (and

operators can generally now accept mobile payments at the same terminal as

EMV processing), mobile will likely become the preferred payment method

over time. Until recently, it was difficult to make a strong business case for

mobile payments, but now the benefits are clear. As a result, more restaurant

management and POS solution providers are investing heavily in contactless

payments and support for the popular NFC mobile technologies, which

provide the security as EMV processing, but, again, at a much faster speed.

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Many next-generation POS systems have built-in capabilities that make it possible to readily generate all types of actionable insights, oftentimes on an ad hoc basis.



Data Intelligence. Which dishes are the most popular? Which dishes are the

least popular? Which are the most profitable? Which are the least profitable?

Which servers are the most productive? Which are the least productive? Which

types of customers are the most valuable? Which are the least valuable? The

answers to these and countless other questions generally reside somewhere in

the POS data. In the past, mining data to extract meaningful insights tended to

be an onerous and time-consuming proposition. Many next-generation POS

systems, by contrast, have built-in capabilities that make it possible to readily

generate all types of actionable insights, oftentimes on an ad hoc basis. This

gives restaurant operators the ability to make more informed decisions about

all aspects of the business. Some systems can even open a window into the

future and predict financial outcomes based on such factors as dining-out

trends and seasonal dish popularity. In some cases, alerts can be set based on

predefined triggers. These alerts can notify a manager when inventory is

running low and needs to be restocked, for example, or when high-cost or

high-risk food items like liquor are going out the door unaccounted for,

indicating the possibility of theft. POS intelligence, which goes by many names

and generally encompasses multiple aspects of a restaurant’s operations, can

be key to maintaining a competitive edge and driving performance

improvement on an ongoing basis.

Guest Management. Having the capacity to capture an enormous amount of

valuable customer information from POS transactions as well as from other

data sources, including guest feedback solicited through survey and reward

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Using guest management capabilities that enable carefully tailored communica-tions and promotions, operators can launch targeted promotional campaigns and rewards programs.



programs, enables restaurant operators to take a more guest-centric approach

to managing their businesses. By creating meaningful segmentation schemes,

and by gaining an understanding of the various characteristics and

commonalities that exist amongst guests in terms of their geo-demographic

and psychographic makeup, restaurant operators can improve the value of

their guest relationships. Using guest management capabilities that enable

carefully tailored communications and promotions, they can launch targeted

promotional campaigns. They can build customized loyalty and rewards

programs. They can refine their menus and adjust other drivers of guest

satisfaction. And they can engage in a host of other activities that increase

loyalty, generate positive word of mouth, and increase revenue.

Employee Management. Many POS systems now come with a host of

integrated employee scheduling tools. Some systems even boast of financial

management features designed to optimize labor utilization. These tools make

it easy to not only perform basic tasks like tracking employee hours and

submitting payroll directly from the system, but, in some cases, to also predict

sales and staffing needs. Using data-driven sales forecasting and labor

planning tools, managers can plan for the volume of business that is expected

on a daily and hourly basis based on historic information and other factors. By

accurately meeting labor targets, and also by understanding which servers are

the most productive, restaurants can better control payroll costs and maximize

workforce efficiency. The benefits of integrated employee management tools

are easy to measure and can have a dramatic impact on the bottom line.

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Inventory Control. Managing inventory in the food and beverage services

industry generally requires a great deal of diligence. Restaurant operators

need to do everything possible to minimize food waste, spoilage, theft, and

over-production. They need to understand how adjustments to menus and

recipes flow down to ingredients. They need to track the variances between

physical inventory and POS data to determine if there may be theft or portion

measurement issues. The good news is that inventory management

capabilities are becoming increasingly sophisticated and also a standard

integrated component of next-generation restaurant management and POS

systems. Restaurant operators can track inventory depletion in a real-time

manner to help reduce food waste, monitor inventory levels and increase

profitability. They can track raw materials from the time the kitchen receives a

shipment through ongoing ingredient usage based on menu item orders.

Some solutions offer automatic purchase order generation based on par

levels and minimum order quantities. Some solutions even offer multi-unit

restaurant features that include resource sharing around food inventory

management.

Seat Reservations Management. Some solutions now offer interactive

reservations tools that allow guests to not only reserve a date and time, but

also their preferred table, server or section of the restaurant. Integrated seats

reservation management capabilities can enhance the guest experience. They

can enable operators to know in advance when loyalty members (who can

enter their member account information when booking the reservation) will

be visiting so that personalized service can be provided. This direct approach

to reservations also avoids having to pay a fee to a third-party booking agent.

Inventory control capabilities make it easier for restaurant operators to track ingredients while minimizing food waste, spoilage, theft, and over-production.



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Chapter 2

Buying Considerations and Evaluation Checklist


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Chapter 2 Chapter 2: Buying Considerations

In selecting a new system, the buying considerations are sure to depend to a large extent on a restaurant’s specific category and size as well as its differing strategic priorities.


Increasing revenue and margins by even a few percentage points can make a

big difference in the world of food and beverage services, sometimes to the

point of determining whether an eating establishment stays in business or is

forced to shutter its doors. Such are the economic constraints that are the

reality for many restaurant operations. It’s no wonder, then, that so many

restaurant operators are looking to technology to improve efficiency and

effectiveness. According to research conducted for this Smart Decision Guide,

almost one-quarter (24%) of restaurant operators who have not purchased a

new restaurant management and POS System within the past 3 years indicate

that they plan to do so in the next 12 months.

In selecting a new system, the buying considerations are sure to depend to a

large extent on a restaurant’s specific category and size as well as its differing

strategic priorities. For example, full service restaurants may be most

concerned with increasing staff efficiency and customer service. Quick service

or fast casual restaurants, on the other hand, may be more focused on

maximizing the number of guests they can serve during the busiest times of

the day. For them, success generally means driving large volumes of people

through the ordering and checkout line as quickly as possible.

Restaurants are also bound to have a number of requirements in common —

the need to ensure secure payment processing, for example, and to analyze

POS data and gain actionable insights into business performance. This chapter

includes descriptions of these and other key considerations for buyers to keep

in mind as they do their research and evaluate their options for upgrading

their technology capabilities.

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Chapter 2 Chapter 2: Buying Considerations

Eliminating the need for servers to travel back and forth between tables and a stationary terminal to place orders and process payments can dramatically boost staff efficiency.


Ordering and payment capabilities. As discussed in the previous chapter,

food and beverage services operations need to be able to accept not only

major credit cards and cash, but also gift cards and mobile payment options,

the use of which is beginning to skyrocket. Beyond secure payment

processing, restaurant operators increasingly want to be able to accept

payments as well as process orders directly at the table. Reducing or

eliminating the need for servers to travel back and forth between tables and a

stationary terminal to place orders and process payments can dramatically

boost staff efficiency as well as table turn times. It can also help increase guest

satisfaction since customers generally prefer tableside bill signing over waiting

for paper checks and then waiting again for terminal credit card processing.

Servers should be able to enter orders using any number of modifiers. Some

next-generation systems with inventory control features in some cases provide

dynamic menu monitoring, automatically counting down menu items, and

even ingredients, that may be in short supply, eliminating the chance a server

might take an order the kitchen is unable to fulfill. Most next-generation

systems facilitate routine tasks like check-splitting by item or number of

guests. In addition, most of them offer preset tip percentage options, which

even non-math-challenged guests can appreciate — and which also tends to

work to the benefit of servers in terms of their earnings. Some systems include

built-in distribution and server payout calculators, making it easy to split tips at

the close of business. Others can send guests receipts electronically, via email

or text message, if they so desire. This benefits operators in that these guests

can then be invited to opt into the restaurant’s loyalty and rewards program.

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Compliancy protects against merchant liability, provides better fraud detection, and accommodates guest preferences as they shift to EMV-enabled payment options.

Chapter 2: Buying Considerations


Data security capabilities. For many restaurant operators, EMV compliance

requirements for processing chip card (chip-and-signature and chip-and-PIN)

transactions, and the imminent liability shift, was the main impetus to upgrade

their technology capabilities in the first place. Unless restaurants are EMV

compliant, they can now be held liable for fraudulent charges. Compliancy

protects against merchant liability, provides better fraud detection, and

accommodates guest preferences as they increasingly shift to EMV-enabled

payment options. The important point is that transaction data collected by

POS systems need to be well-protected at all times. This means securely

encrypting cardholder data the very instant a guest’s magnetic strip is swiped

or chip is read. And it means keeping that data encrypted until the transaction

is actually processed. Some systems store data on cloud-based servers, others

on on-premise servers. Either way, the systems must be equipped to safeguard

against risks of data breaches by complying with Payment Application Data

Security Standards (PA-DSS) and Payment Card Industry Data Security

Standards (PCI-DSS). Some systems go so far as to monitor transmittal activity

and send an alert if there is even the slightest suspicion of rogue access points.

In addition to safeguarding cardholder data against the possibility of outside

theft, the systems need to also protect against the possibility of employee

theft. One way is to automatically track all the cash that servers collect. Some

systems offer “blind closeout” capabilities, requiring servers to reconcile all

cash across all drawers at the end of each shift without them knowing the

precise amount they are expected to collectively turn over. Besides ensuring

employee accountability, this approach simplifies close-of-day tasks.

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Every restaurant is sitting on an ever-growing mountain of data related to inventory, menus, guests, employees and various operational and financial aspects of the business.


Performance reporting capabilities. Today, having visibility into all the

key drivers of restaurant performance is not just an operational necessity

but a strategic imperative. Every food and beverage services organization is

sitting on a mountain of data related to inventory, menus, guests,

employees and various operational and financial aspects of the business.

Systematically mining and analyzing the data can generate a continuous

flow of actionable insights. These insights can lead the way to more

informed business decisions, resulting in reduced costs and increased

revenue and profitability. Generating these insights, however, requires the

right data mining, analysis and reporting tools. Increasingly, these tools are

being integrated as a core component of next-generation restaurant

management and POS solutions. The tools are also becoming increasingly

flexible, sophisticated and powerful, making it easy to track and monitor

any number of key performance indicators (KPIs) in a user-defined manner.

At the same time, the reports are becoming increasing comprehensive,

intuitive and visually compelling. Some systems even include notification

features that can trigger a timely response – for example: “Alert me when

voids are greater than 10% of sales.” Every restaurant operator needs to

track basic financial metrics such as net sales to be able to, for example,

compare current performance to past performance. But how many track

such metrics as average table turn rates, occupancy rates, guest spending

or other metrics that impact revenue? Whether looking at menu item

profitability, table seating configuration, server productivity or any other

KPI, operators need to know to what extent a system will let them make ad

hoc queries, generate reports and refresh dashboards using any number of

relevant data sets, over any time period, to get the answers they need.

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Buyers should keep in mind that selecting a new restaurant management and POS solution means entering into a potentially long-term relationship with a solution provider.


Setup, support and training. Purchasing a new restaurant management

and POS system means entering into a potentially long-term relationship

with a solution provider. That being the case, buyers should select a

company that offers a sufficiently high level of customer support, from

implementation (migrating old POS data into the new system can present a

challenge) to addressing any day-to-day operational issues that may arise

down the road, including ones related to data analysis and reporting. Most

reputable solution providers are willing to facilitate the setup process as

well as oversee any required customization — helping, for example, to

optimize the system according to the restaurant’s physical floor plan. Some

will even test network speed and data backup processes. In addition to

ensuring the availability of reliable support, preferably 24/7, buyers should

ensure that employees will be able to receive the training they need to use

the new system effectively. At the very least, that means walking them

through features and settings and showing them how to troubleshoot the

problems they may encounter.

Usability. The system should be easy to use. The interface should be

attractive and intuitive. Screens should be laid out in a logical and easy-to-

understand format, whether they relate to placing orders and processing

payments or any of the back-office functions, such as accounting, reporting

and employee management. Some systems have graphical layouts for

tracking individual table status. Quick-feature icons that can enable faster

order placement. For servers and management alike, as well as guests, the

overall quality of the user experience should be of paramount importance.

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Customization and flexibility. Every food and beverage services organization has its own distinct set of

wants, needs and preferences as well as its own personality. Buyers may desire a significant degree of

customization to reflect that personality. They may want to configure some screens in a way that may be

somewhat unconventional. They may want to be able to generate non-standard reports. They may want

to be able to integrate with third-party software modules and/or hardware components, such as existing

kitchen video displays. Determining the degree to which a given system allows customization, as well as

its relative constraints and limitations, can rank as a critical buying consideration.

Research Data Point “To what extent has upgrading your POS system (within the past 3 years) enabled your restaurant to improve overall performance and business results?”

Quick service and fast casual restaurants

19% 40% 32%

26% 47% 25%

Full-service restaurants

Dramatic improvement Significant improvement Only minor improvement

57% of respondents cite “significant” or “dramatic” improvement Only 9% cite no improvement

73% of respondents cite “significant” or “dramatic” improvement Only 2% cite no improvement


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Chapter 2: Evaluation Checklist


This Evaluation Checklist offers a framework for conducting an apples-to-apples comparison of restaurant

management and POS systems using the buying considerations outlined previously. Other key

considerations can be added based on individual buyer priorities. Relative weightings can be assigned on

a scale of 1 (“This buying consideration has no bearing on our purchase decision”) to 10 (“This buying

consideration is a very important factor in our purchase decision”).

Buying Consideration Weighting Vendor 1 Vendor 2 Vendor 3

1. Ordering capabilities

2. Payment capabilities

3. Security compliance

4. Performance reporting and analytics

5. Type of hosting (cloud, on-premise or hybrid)

6. Integration capabilities

7. Multi-location management capabilities

8. Customizability / user experience

9. Setup, training and support

10. Usability / client satisfaction

11. Costs and expected ROI

12. Overall features and functionality

a. Marketing, loyalty and rewards programs

b. Inventory management

c. Labor management

d. Cash drawer management

e. Table management

f. Other _____________________________

Overall Rankings N/A

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Must-Ask Questions

Chapter 3


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Chapter 3: Must-Ask Questions


With restaurant management and POS systems

accounting for the largest portion of the budget for

restaurant IT investments, there is no shortage of

related solution providers vying for the attention of

prospective buyers. By asking the right questions,

restaurant operators can quickly rule out some options

while narrowing down others. Just as the buying

considerations are bound to vary depending on

restaurant size and category, as well as the operator's

own strategic priorities, so, too, are the “must-ask

questions,” especially those that relate to specific

features and functionality. The operator of an

establishment that offers food delivery, for example,

may have specific questions about delivery dispatch

and management features. Operators who wish to

migrate to tableside service capabilities will likely have

more questions about those features than ones who

prefer to use centralized order and payment

processing terminals. Similarly, operators who often

work off-site or who manage multiple locations may be

more interested than those who generally work on-site

in asking about cloud-based reporting capabilities and

remote access to, say, menu and table layout functions.

Following are a few of the broader questions, equally

applicable across all restaurants, that prospective

buyers may wish to explore with solution providers.

94%

88%

81%

76%

Generating actionable insights from POS (and other) data into guests, operations, menu, staff, etc.

Using guest profile information for targeted promotions and loyalty and rewards programs

Research Data Point Percentages of restaurateurs who view each of the following success factors as “important” or “very important.”

Accommodating guests’ ordering and payment preferences

Driving increased staff productivity and operational efficiency


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Buyers should have clear expectations when it comes to customer support and problem resolution as well as the training that may be needed to get servers and staff up to speed.


What type of customer support is offered? Are there any extra costs? How quickly will questions be answered and problems be resolved? Buyers

should have clear expectations when it comes to customer support and

problem resolution as well as the training that may be needed to get servers

and other staff up to speed on the new solution. More than three-quarters

(73%) of survey respondents agree that adequate user training ranks as a key

success factor. Does the solution provider (or a certified subcontractor) offer an

online or, better yet, in-person training program? Is it equipped to offer online

troubleshooting and diagnostic techniques should technical issues arise? Are

local, in-person service and support services on hand should there be an issue

that can’t be handled remotely? Knowing that problems will get resolved fully,

and in a timely manner, is critical for a food and beverage services organization

that needs to run with minimal interruption and in which even a 30-second lag

in payment processing may be enough to erode the guest experience. Buyers

need to understand what to expect should they ever get into a situation that

requires immediate attention. Tip: Ensure that resources are available to address

training and support needs and resolve issues in a timely manner. Some solution

providers guarantee specific response and resolution times.

What is the solution provider’s track record for stability and reliability? A

solution provider’s reputation and record of customer satisfaction are

important. Nobody wants to implement a restaurant management an dPOS

system that falls short of expectations due to known shortcomings in stability,

reliability or promised benefits. While the solution provider need not have

been in business for decades — most of the tablet-based POS players are

relatively new entrants — it should nonetheless have a sizable roster of

customers that can attest to the reliability and performance of the solution. Tip:

Seek information about what performance issues may arise though conversations

with existing clients, preferable ones in the same restaurant category.

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Buyers would be well advised to find out to what extent customized reporting is possible and what is involved in the process of filtering and sorting data according to a specified set of parameters.


Does the solution offer flexibility in functionality, including data access and performance reporting? The degree of visibility offered by next-

generation restaurant management and POS systems is unprecedented. Such

visibility offers a whole new level of management control. To advantage,

however, restaurant operators may have certain software configuration and

customization needs that must first be implemented. As such, they may want

to confirm that any solution providers under consideration can meet these

needs and preferences. With respect to employee scheduling, for example,

some managers may prefer to modify or create their own templates of work

periods, if that option were to exist with a particular solution. Or, as another

example, they may have a certain way of wanting to input menu modifiers.

Most systems come equipped with a large number — in some cases, dozens —

of standard dashboards and reports around operational and financial areas like

sales and revenue, labor and inventory control that should meet most

operators’ day-to-day performance management and analysis needs. That said,

not all POS data queries and reporting requirements can necessarily be

anticipated in advance or be addressed with out-of-the-box dashboards. For

that reason, buyers would be well advised to find out to what extent

customized reporting is possible and, also, what is involved in the process of

filtering and sorting data according to a specified set of parameters. With 81%

of restaurant operators ranking the need to gain access to POS data and

business insights — generally now available anytime, on any device — as an

“important” or “very important” success factor, it only stands to reason that

they would also want to ensure that any solution under consideration is able to

meet these expectations in terms of POS data analysis and reporting

capabilities. Tip: Confirm that the solution is flexible in terms of keys areas of

functionality, including custom report generation, and verify the solution

provider’s claims, if possible, by speaking with existing clients.

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There are many reasons for the shift to increased affordability, including the fact that installation is generally less complex and hardware is generally less expensive than in the past.


What is the total cost of ownership? Are there any “hidden expenses”? While hardware and software costs run gamut, as do the requirements of

different restaurant operators, next-generation restaurant management and

POS systems on the whole tend to be significantly less expensive and require

less up-front investment than their predecessors. There are many reasons for

the shift to increased affordability, including the fact that installation is

generally less complex and hardware is generally less expensive compared to,

say, a decade ago. With a fast-growing number of systems, the POS data is

stored entirely in the cloud, reducing (or, likely, even eliminating) the need for

on-premise servers. Incidentally, most cloud-based POS systems also use a

subscription “pay as you go” model, which generally means no long-term

contracts and no upfront capital investment for the software. This may be an

important consideration, especially for smaller operations with a limited

budget. In all cases, it is important to confirm which software features and

modules, including future upgrades — as well as which hardware components,

if any — are included in the base (recurring) price that is quoted so as to avoid

any unpleasant surprises down the road. Tip: Ascertain that all associated

installation, licensing, maintenance and ongoing service and support fees are

included in the pricing. Also, check that the solution comes with a warrantee to

protect against hardware or software malfunction, what specific replacement or

repair costs are covered, and over what period of time.

27

Roadmap and Recommendations

Chapter 4


28

The food and beverage services industry is teeming with technology innovation. Solution providers

are not only adding a host of new software features and functionality to their platform capabilities,

but many of them are also introducing new kitchen display systems, customer-facing kiosks, menu

apps, and so on. With technology development in a constant state of flux, the task of selecting a

next-generation restaurant management and POS system can, for some restaurant operators, seem

an unusually difficult challenge. The fact of the matter is that most of the technology innovation is

headed in the same general direction. The Roadmap Diagram below highlights some of the key

trends and shows various aspects of the migration path in restaurant technology capabilities.

Chapter 4: Roadmap

Legacy Solutions Next-generation Solutions


Stationary terminals only for order and payment processing

Mobile options for order and payment processing

Credit card and cash only payment acceptance

Chip-and-pin and mobile payment acceptance, as well

Rudimentary data analysis and performance reporting

Robust and custom data analysis and performance reporting

POS separate from CRM, marketing and loyalty programs

POS integrated into CRM, marketing and loyalty programs

On-premise-only access to POS data and reporting

Anytime, anywhere access to POS data and reporting

Emphasis on managing day-to-day restaurant operations

Emphasis on driving performance improvement and revenue

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Chapter 4: Recommendations

The systems have migrated from being little more than payment processing and ordering platforms to becoming the epicenter of day-to-day operations and decision-making.

The 2016 Smart Decision Guide to Medical Practice Management Systems Entire content © 2016 Starfleet Media. All rights reserved. Unauthorized use of reproduction is prohibited.

The proliferation of mobile devices and new payment options, access to ever-

growing volumes of customer data, advances in analytic capabilities, and

increases in processing power, along with ever-rising expectations on the part

of restaurant operators and guests alike, have all conspired to usher in a new

era in food and beverage services technology. Next-generation restaurant

management and POS systems have migrated from being little more than

payment processing and ordering platforms to becoming the epicenter of day-

to-day operations and strategic decision-making. Following are a few

recommendations to not only keep in mind along the evaluation-and-

purchase journey but also once the new solution is implemented.

Focus on building the guest database. Restaurant operators can capture an

enormous amount of valuable customer information from POS transactions as

well as additional interactions, such as surveys and rewards programs. By

enhancing guest profiles with additional data and understanding guest

commonalities by looking at psychographic makeup, and then creating useful

segmentation schemes, restaurants can maximize the value of guest

relationships. The goal is to provide carefully tailored services, communications

and promotions while minimizing the cost of resources otherwise expended to

build, maintain and increase the value of those relationships. Capturing and

storing individual guest information in a centralized data repository, and

acting upon that information to the benefit of both guests and the business,

should become a core competence for every restaurant operation.

30

Chapter 4: Recommendations

While tech-savvy managers, servers and other employees should be able to get up to speed on a new system relatively quickly, others may need some hand-holding.


Know thyself. While every prospective buyer needs to ensure that any

restaurant management and POS system under consideration covers all the

basics around food ordering, secure payment processing, etc., every restaurant

also has its own requirements and priorities in terms of features and

functionality. A multi-location restaurant operation, for example, will probably

want to purchase a system that features multi-restaurant management

capabilities — with single sign-on, for example, and unified data analysis and

performance reporting. Buyers should try to gain a clear understanding of their

own requirements and priorities early on and weigh them accordingly (see the

Evaluation Checklist in Chapter 2).

Check client references. This recommendation may seem obvious, but it

nonetheless bears mentioning. No input may be more important to the buying

decision than the perspectives that can be gleaned from existing clients,

preferably restaurants that share commonalities in terms of size, typography

and existing technology infrastructure. A solution provider may be willing to

provide one or more client references. And some restaurant operators may be

willing to share their experiences, including both the pros and cons. Written

client testimonials and success stories can also be valuable resources.

Provide adequate training and practice. While tech-savvy managers, servers

and other employees should be able to get up to speed on a new restaurant

management and POS system relatively quickly, others may need some hand-

holding. As discussed, it’s important that the solution provider — or another

resource, if necessary — provides the requisite level of training support and

that sufficient time is allotted for servers to become comfortable with the

idiosyncrasies of the new system before being set loose on paying guests.

31

Inside Voices and Outside Voices

Chapter 5


32

Figure out exactly what your operation needs before you start exploring POS

technology options. Some new features are awesome and can have a real impact. But

some solutions offer a lot of capabilities that may not help you achieve your goals. The

bells and whistles may actually be a distraction to your servers and other staff.

Manager, full-service restaurant

Senior executive, fast casual restaurant

Owner, full-service restaurant IT manager, full-service restaurant

Last year, we made the decision to upgrade. The main drivers were EMV

compliance and POS mobility. What we weren’t expecting was the positive response we got from guests who

appreciate the shorter wait times and better service experience.

The most important thing to consider, aside from payment processing needs, is guest

satisfaction. Will the new solution turn the dial on guest satisfaction? Will it improve the

experience people are having with the restaurant? Will it leave guests feeling

happier? If the answer is “yes,” then upgrading makes a lot of sense. Any technology that improves guest satisfaction and gets them

coming back more often is money well spent.

A lot of different trends and factors are shaping the technology needs in our industry. Rising labor costs is one of them. To reduce overhead, some

restaurants would prefer that guests use their own mobile devices when

ordering as well as when paying. This is something we’re going to see a lot

of in the future – guests sending their own orders directly to the kitchen display. And then maybe robots preparing and serving the food!

Chapter 5: Inside Voices


Restaurant operators, including owners, managers and staff, with first-hand experience with next-

generation restaurant management and POS systems have a lot to say about the topic. Following are a

few perspectives gleaned from individuals who participated in the survey that produced the research

included in this Smart Decision Guide.

33

We hear all the time that choosing a POS system feels like a very overwhelming

process. With all the different options on the market today, there can be a lot of

pressure to select the ‘right one’ that will work for the front-of-house and back-of-house staff. It’s an important decision to

make because much of the way a restaurant runs will likely depend on the functionalities of the chosen POS system.

Justin Guinn, Market Research Associate, Software Advice

Evan Schuman, PC Magazine

Forrester Research, Study: Step Up The In-Person Experience

Chris Caliz, TechCrunch

For restaurant operations, the right POS system can be a make-or-break decision.

During the most critical times for your business… the POS system needs to

perform in just the right way. A slow user interface can mean fewer meals sold and unhappy customers, but a feature-anemic

system can cause back-end accounting problems or even drop essentials such as

credit card processing.

[An] advanced point-of-service (POS) system…that mimics systems of insight and

systems of engagement will improve customer experience, empower employees, and increase the efficiency and performance of operations.

A restaurant’s choice of POS can impact and dictate a majority of other

tech choices for it. The reasons are varied, from rich packages that include multiple features to limited integration

options with other products.

Chapter 5: Outside Voices


Following are a few additional perspectives from industry observers, including trade magazine editors and

leading research analysts, with insights into next-generation restaurant management and POS systems.

34

Research Notes and Underwriters

Appendix


35

In Q1 2016, Starfleet Media conducted an online survey, consisting of both multiple choice and open text

questions, to capture the perspectives of industry practitioners with firsthand experience with restaurant

management and POS systems. Some of the research findings are highlighted in this publication. Following

is some basic information about the 162 qualified survey respondents who participated.

Appendix: Research Notes


39% 41% 17%

Servers and other staff

Managers and other leadership

Owners

Bars and nightclubs Full-service restaurants

7% 42% 51%

Quick service and fast casual restaurants

North America Other

73% 20% 7%

Europe

Job level / role of survey respondents

Size / category of survey respondents’

restaurant employers

Geographic location of survey

respondents

36

Appendix: Underwriter


Oracle Hospitality offers a range of software, hardware and related services, including a leading portfolio of cloud solutions, designed for the hospitality industry. With over 35 years’ experience in developing point-of-sale systems, Oracle Hospitality offers best in class technology to enable customers to streamline business operations, increase customer loyalty, and elevate profitability. www.oracle.com/hospitality Contact: Oracle Hospitality 7031 Columbia Gateway Drive Columbia, MD 21046 (866) 287-4736 [email protected]

http://www.oracle.com/hospitality�

http://www.oracle.com/hospitality-millennials�

http://www.oracle.com/hospitality�

mailto:[email protected]�

37

This Smart Decision GuideTM is the result of primary and secondary research conducted by Starfleet Research, which is the IT market research arm of Starfleet Media. It was independently produced, without editorial involvement from the company underwriters. Our approach to content production provides for unbiased, fact-based information. It represents the best and most comprehensive information, analysis and recommendations available at the time of publication. Starfleet Media assumes no liability for the use or interpretation of any information contained in this Smart Decision Guide. Purchase decisions based on the information contained herein are the sole responsibility of the individual decision maker(s) and/or the companies they represent. Unless otherwise noted, the entire content of this publication is copyrighted by Starfleet Media. It may not be reproduced, distributed, archived, or transmitted in any form or by any means without the prior written consent by Starfleet Media, except by the company underwriters that have secured perpetual licensing rights to the content. For additional information, please contact Starfleet Media at [email protected].

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The 2016 Smart Decision Guide to Restaurant Management … · New restaurant management and POS systems are having a profound impact on business operations, guest satisfaction , revenue