Restaurant tech has been around longer than mobile phones, which is one reason why 70% of operations teams rate their tech stack as “poor” or “fair.”
When it comes to handling scale, only 13% of operators said their stack is “very good,” which is very bad news given the pace of change within the restaurant industry.
Restaurants took a huge hit in 2021—and although the industry wavered at first, new opportunities emerged in response to the pandemic and digital ordering needs. But in addition to dealing with shaky or legacy tech stacks, many restaurant chains are looking to integrate new operating models, such as ghost and host kitchens, pre-packaged food production, and eCommerce strategies to extend product reach.
In this omni-channel environment, restaurant brands know that a “good” tech stack simply isn’t going to cut it.
It's clear that digital transformation is no longer a nice to have but a necessity for future viability. At Qu, we believe the winning restaurants in the "new post-pandemic economy" will be those that adopt modern technology approaches (think: agile, scalable, and modern platforms) and embrace new ways of thinking and operating.
Here are the top 3 ways we recommend restaurant chains approach their technology refreshes and digital transformation journey to meet the challenges of the 21st century and beyond.
1) Deploy the right software operating model
Although the restaurant POS industry hasn't changed much in recent years, IT management and administration has evolved a lot, particularly with the advent of more flexible, scalable cloud deployment models. Cloud services were a first step towards simplifying infrastructure management for enterprise restaurant chains, in addition to managed services and platform-as-a-service. Maintaining solely on-premises equipment and technology represents both risk and complexity, because it’s impossible to maintain the same level of capacity, speed, resilience and elasticity that's available through cloud providers.
The easiest to maintain software model—SaaS—virtualizes everything, so the IT departments can focus more on configuring for their specific needs and integration with other applications in the stack. For most industries, the SaaS model is ideal, but there are a few caveats when it comes to real-time connectivity in restaurant locations. Restaurants depend greatly on end-user hardware for their POS and production systems, which in turn rely on network connectivity to operate successfully. For that reason, a full SaaS solution falls short.
Infrastructure management can be envisioned on a continuum from fully self-managed to fully managed by service providers:
Often the ideal solution will be towards the right of the continuum, close to SaaS, but with configurability of data, local solutions for connectivity, and allowances for dedicated POS hardware.
Modular architecture is another important element of a more flexible software deployment model. This approach—along with the recent rise of containerization and dockers—has reduced the inherent complexity of IT’s role for enterprise brands, through increased virtualization of services and servers. However, even with the availability of these technologies, many restaurant chains are still stuck with software stacks that limit their flexibility, leading to increased maintenance costs and reducing their ability to quickly integrate new changes.
A modular software architecture can alleviate these pain points, while providing some tangible advantages:
- One, as stated above, is that you can integrate these modules with other software that may already have been deployed within your ecosystem, in addition to applications that you may need to deploy in the future, based on business need or advancements in the industry.
- A second advantage of modular software architecture is the greater choice and flexibility that this model provides -- enterprise brands now often don’t have to purchase unnecessary functionality or applications. You’re able to retain the software that you like, deploy functionality based on specific needs, and upgrade when your business requires it.
- Finally, an important third advantage is this approach helps future-proof your business and technology ecosystem. Implementing a modular architecture helps you meet the needs of a fast-changing technology landscape, and gives you the ability to deploy functionality faster than you’d be typically able to using a legacy software model.
In a space that is changing as quickly as the restaurant industry, this type of future-proofing makes a huge difference in your agility, your operational costs, and your ability to please and meet the demands of your guests.
Operations and guest engagement have also been heavily influenced by another force that the right restaurant software model can accommodate: integrations.
2) Make sure your tech stack plays well with others
Whether you need an inventory management tool, a robust scheduling and labor system, or a more engaging loyalty program, operators are spoiled for choice these days - there have never been so many potential partners or functional integrations from which to choose. However, as exciting as this variety might be, what’s not as exciting is the level of effort, pain, and resources often required to make integrations work with legacy systems and architectures. Legacy systems may be more difficult to integrate with, either because their code is unwieldy and archaic, or because the vendor intentionally wants to lock you into their suite of products.
Whatever the reason may be, it’s crucial for your business to have an API-forward approach that affords the flexibility your business needs to augment functionality, bring on new partners, and of course, rapidly make changes that enhance your guest engagement or operational capabilities. Another area where operations and guest engagement overlap is menu management, which remains one of the most pervasive problems for restaurants.
An integrated database for omni-channel menu management can help you solve one of the most pervasive problems for restaurants - menu variability.
Menus can vary depending on regional preferences, delivery channels (eat in, takeout, third-party delivery, etc.), and inventory. This level of complexity has created a real challenge for operators, who often find themselves distracted from their core objectives of delighting guests and growing their business, due to the need to maintain a multitude of menus.
Single menu management is one of the major issues that need to be addressed today, made obvious by common problems like:
- Difficulty in editing and updating third-party delivery menus in real-time
- An inconsistent guest experience
- Making regional or location-specific changes
- Lack of integration between inventory and menus
- The inability for specific franchise owners to offer local specials
- Challenges identifying the same customer when they order through a different channel
With the rise of new operating models such as ghost and host kitchens, menu variability is only going to present more of a tangible challenge for enterprise restaurant chains. The right omni-channel environment will allow for more convenient centralization and localization, integration with inventory, and unified guest management and insights. Not only does a unified omni-channel experience simplify operations for enterprise restaurant brands, the approach can improve the ability to deliver just what the customer needs; while also providing important analytics and business insights.
3) Capture, store, and normalize your data
One of the most frustrating problems for business managers is the difficulty in deriving actionable business insights due in part to fragmented IT systems. It’s hard to get the full picture of your guests’ habits and glean insights based on behavior when, for example, you can’t connect the dots between someone who orders UberEats on Tuesday, but then picks up in-store on Thursday.
Having a fully integrated, omni-channel menu is just one of the ways in which the right software stack provides better insight. True integration between your different digital ordering, engagement, and production systems can help provide better insight into your guest’s behavior, and into how efficiently your restaurants are operating. However, operators often find themselves at the mercy of outdated architecture, cobbled-together systems, and disparate data sources, resulting in a lack of normalized data from which real insight can be drawn - and that restaurants can use to make nimble business decisions.
However, normalization isn't the only key to robust data capabilities, what a business is able to do with all of that information is arguably more important. The value of a system can often be measured by its treatment of data; that is, good systems may have their own built-in business and analytics tools, while great systems allow for standardized data integration and export of information that is housed in typically disparate restaurant software applications.
An integrated software ecosystem should be a top-line priority for restaurants, as the benefits of a robust technology stack go beyond just technical gains. Brands that are able to harness the power of normalized data can truly realize benefits that have direct impacts on the success and health of their businesses.
Embrace technology to succeed today - and tomorrow
It's obvious that robust, integrated, and flexible IT and POS systems are no longer just operational concerns for restaurants, they're now core differentiators that contribute to a brand's success and ability to effectively engage with guests. For this reason, it's crucial that restaurants invest in their futures by implementing a technology operating model that provides tangible operational and guest engagement benefits, in addition to fostering data-driven insights.