Islands of Information: The Need for integrated Restaurant Technology.
Think about it: Restaurant technology is typically selected and implemented 'in isolation'. The thought "how well will our systems exchange data" is at best - an "after-thought". Different potential vendors compete for the business, like POS, Inventory, Accounting and the winner is most often selected, not with the best possible integration in mind. Price, design of terminal hardware... those are features reviewed. Not data exchange. CPAs often times are brought into the picture when the system selection is already done. Bottom line:
IT is often provided in isolation: POS companies provide POS systems. Inventory management companies provide inventory management, payroll folks provide payroll etc. Whether an exchange of data is even possible? Most patrons don't have that question on the radar. Or they assume its there. But even with all technology advances: systems do not communicate "automatically". Without considering compatibility from the onset - it would be sheer luck, if systems could exchange data without much tweaking. (*to work -provided the needed technology is there- coordinated setup and programming as well as data organization is the essential prerequisite).
While theoretically the back office can be automated to a high degree, in "the real world" there is still a large amount of manual back office labor. Most restaurants have that work done by managers, which makes this the most expensive work in the house. “Managers are there [and paid] anyhow.” What is the cost of their data entry? Why let your managers do clerk work? Analyzing this reality leads to the conclusion that there must be a more economical way.
Before we look at the most important data streams in restaurants, here’s a look at time:
As stated: Restaurant systems mostly do not provide an integrated picture of information. Data is generated and residing in isolated programs for payroll, POS, accounting and inventory - it is typically too time-consuming to get actionable information that way. The information is manually integrated by way of spreadsheets. Made available with a time lag of often 5 to 6 weeks, counted from the beginning of the accounting period. The key operative word here is actionable. With such a time lag it is evident that management cannot manage by key performance indicators created with a time lag of many weeks: once they obtain their KPI - they are already ‘ancient’ past.
Types of data needed to generate Key Performance Indicators (KPI):
Payroll Data – jobs worked, hours and tips, imported from POS Bank Data –imported from your Bank Revenue Data and Inventory Depletion – imported from POS and or PMS. Cash Data (audit-conform?) manually counted Invoice Data – automatically imported by Andado Inventory Information, from manually entered invoices and sales depletion information from POS as well as item counts
In his 1988 classic “Talking Straight” Lee Iacocca, the man who saved Chrysler from bankruptcy, describes his perspective on business success: “it’s just better to make decisions based on 80% of the facts instead of spending endless amounts of time to get to 100.” (from a dialogue with Henry Ford)
Here’s what that means for restaurant management:
The (least amount of) time to generate KPI is more critical than getting it 100% right. More pronounced: the value of performance data is greatly reduced if it is presented too far behind. Most modern accounting departments therefore focus on time. The new paradigm is agility.
Our company is specialized in providing and advising on design of integrated technology solutions with an emphasize on providing a weekly operating P&L and providing critical KPI on a timely basis for better restaurant management. Please talk to us if you wish to explore this deeper. Call Bernie Schwentick take at 480-222-0050.