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Which systems and features really earn their place in the high-pressure, low-margin world of restaurant operations?

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April 01, 2002
Restaurant | Technology
Jon Inge

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© 2002 Hospitality Upgrade. No reproduction without written permission.

If you think a hotel front desk is a busy environment, that doesn’t hold a candle to a successful restaurant at the height of the evening rush. Guests arriving and departing, meals being ordered and served, tables being bussed, checks being delivered and settled – it’s a whirlwind of tightly-choreographed activity with dozens of interacting players and no margin for error.

In that environment, every piece of technology you use has to earn its keep. It must help produce faster service, more personalized service and lower operating costs, or it doesn’t justify its cost. Oh, and it must not cost too much – restaurants run on notoriously slim financial margins – and it must be dead reliable even amongst the steam and heat of a kitchen, since the slightest interruption quickly ripples through the operation.

So given that there’s little room for interesting-but-not-necessarily-essential technology in a restaurant, what kind of systems ARE being installed these days? Which ones really earn their keep, and how?

Better Systems Integration
Restaurant systems have historically revolved around one core, the point-of-sale (POS) system, in much the same way that hotel operations have been oriented around the property management system (PMS). While links to other systems have certainly been used – inventory/purchasing, recipe analysis, accounting and so on – POS systems have been the center of it all. Generally though, they’ve been even more of a data island unto themselves than have PMSs.

In restaurant operations as in hotels, though, two technology shifts have helped reduce this isolation. The Internet, via dial-up or dedicated links, has brought a cheaper and more universal communication network to virtually every location. And alongside that, the rapidly growing adoption of more standard interface formats such as XML has made it simpler for different systems to exchange data.

The impact at the local level has been to release the benefits of linking POS, table management, timekeeping, recipe analysis, inventory/purchasing, accounting and, in a hotel environment, property management systems. At the corporate level, instead of being restricted to dedicated communications lines to each site and to consolidating data from a single vendor’s systems, central systems can now pull in data from several different products from multiple sites, gathering POS operational statistics, purchasing needs, timekeeping data for a centralized payroll, and more.

Further, the analysis of that consolidated data has also become more sophisticated and productive through the adoption of more powerful yet easier-to-use tools. With this more refined operations knowledge and the improved systems communicability, the remote management of recipes, inventory and staff scheduling at the local sites becomes more achievable and more effective.

Traveling managers have remote access to that data, too, over the Internet from wherever they happen to be. They can also set up data trigger points so that they’re automatically alerted when certain thresholds are crossed – a high-value purchase order being placed, a restaurant’s daily operating statistics being outside certain limits, whatever’s most important to each individual manager. And the flexibility of modern communications means that they can receive those alerts wherever they happen to be, via pager, cell phone or even wireless e-mail to a PDA.

Centralized operations have been around for a while, of course, especially for corporate purchasing, and while the function may not have changed, the technology certainly has. Clearly there are economies of scale in buying in bulk for all of your operations, but while it’s tempting to try to force everything through one central office, the more effective operations combine central purchasing of staples and signature items with the local purchase of regional products.

Long-established inventory/purchasing systems from vendors such as Eatec and Adaco have become even more effective as they’ve adopted the ease-of-use and integration benefits of the Windows environment. Preparing and placing orders, receiving full and partial shipments, applying various forms of discounts, monitoring payment terms – all have become simpler to perform even as the complexity of the tasks has increased.

The much-touted B2B marketplaces proved much harder to implement than expected, though, and several folded after a brief run as vendors proved reluctant to expose their pricing so visibly in the competition for orders. Those that have done well combined a good business model with success in building a large enough database of clients.

PurchasePro, for example, has extended its hospitality-based offerings into several other vertical markets; it also bought high-end hospitality purchasing specialist Stratton Warren, which continues to maintain its excellent reputation. Another success story is Avendra, originally established by Marriott and Hyatt and continuing to attract clients such as ClubCorp, Six Continents and Fairmont.

Many individual supply chain vendors have nonetheless taken advantage of the Internet in a B2B sense to enhance their existing business, automating the online delivery of specific sections of their catalogs to clients’ purchasing systems. Others, such as POS hardware vendors POSwarehouse and Web4POS, have added Internet access to their existing operations, giving clients the ability to order hardware and supply items 24 hours a day with minimum effort.

Point of Sale
So what changes have been going on in the POS systems themselves, the data hub of restaurant operations? Well, obviously they still cover the same basics of opening individual or multi-person individual checks, ordering items with various modifiers (or even completely off-menu items), splitting the cost of items between guests and settling checks any way the guest requires. But there’s been considerable refinement in the way these functions are carried out, making them both more powerful and easier to use.
Take the old split-check issue. Modern POS systems use clear graphics to display all items and the individual guests; servers just touch the items to move them from one guest to another. Now they can also touch pre-defined function buttons to split part of the check (usually wine) or all of it between two or more guests, either equally or in various proportions. Good design makes it simple and intuitive.

Course firing has also been enhanced lately, though there’s much discussion over whether it’s really essential. The more comprehensive systems allow servers, as they enter the items on the check, either to hold various courses to be fired to the kitchen printers manually when they judge that the timing is right for the guests, or to have the system fire them automatically after a pre-determined interval.

This can be really convenient for a busy operation, but a lot depends on how your kitchen staff operates; printing the complete order all at the same time at least gives the chef advance warning of which entrées will be required. One compromise approach is offered by Silverware, in the form of POS item modifier keys that are time-dependent; adding a “wait 30 minutes” modifier to an item generates a kitchen order slip showing the actual time it will be required.

One place where automatic firing can be a real asset is in a hotel environment, where room service breakfasts are usually ordered by the ubiquitous doorknob cards. After the cards have been collected in the early morning, entering the orders into the POS system and specifying the time each is required can be a true time-saver, with the order slips printing in the kitchen automatically at the appropriate time. It’s also useful for the kitchen staff, who can review all the pre-entered orders when they arrive and quickly gain a sense of the morning’s workload.

At the technical level, workstation design has progressed significantly. Touchscreens are clearly the de facto standard for data entry; given the sensible use of colors and thoughtful screen layouts, they’re fast and intuitive, though that’s a big given. It used to be that buyers were limited in choice between the POS vendors’ own custom-designed all-in-one workstations, which were compact but expensive, and standard PC units, which took up a considerable amount of space.

Modern PC hardware has provided more options, though, and today’s very compact PCs combined with commercially available touch-sensitive, flat-panel displays take up very little space. The current all-in-one units offered by IBM, NCR, MICROS and SQUiRREL, among others still provide the benefits of a compact, integrated device from a single vendor.

Software usability has also been addressed well by several vendors. SQUiRREL in particular has made a point of incorporating human-factors considerations into its software design. An example is automatically reversed screen displays for left- and right-handed users, a feature now also offered by a few other vendors. Color is also being applied in more subtle ways, too, leading to more effective but less glaring screens.

Order and check printers haven’t changed much; the standards are still quiet thermal printers for check printing in the restaurant, and more robust dot-matrix units for printing order slips in the noisier kitchen environment. There has been some debate on the merits of replacing order printers with video displays, which are certainly valuable in quick-service operations. Even in a more complex environment they have advantages in being able to display more information about each order, such as how long ago it was entered.

However, this is often offset by their limited display space and fixed location. Servers need some means of identifying their own orders when they’re ready for pick-up, too, which means having either a very structured counter layout or an expeditor controlling the delivery process.

Handheld Terminals
Speaking of hotly debated items and usability, we turn to wireless handheld units. These are indeed cost-effective in spread-out areas such as sports stadiums and swimming pool lounges, where it would be very time-consuming for the server to keep returning to a fixed workstation to enter an order, but they’re definitely not appropriate for every environment. Cost was one factor originally; being custom-made units they were quite pricey in themselves, and sometimes needed several wireless base stations for complete coverage of a widespread serving area. They also suffered from hard-to-read screens, and the limited information they could display required time-consuming navigation through many similar screen pages to enter any reasonably complex order.

Viability has taken a giant step forward, however, with the adoption of the current crop of PDAs, both Palm-based and the Windows CE-based Pocket PC units, combined with the more versatile wireless networks now being introduced. The PDAs’ bright, readable screens are much more visible in typical restaurant lighting, and the use of color in well-designed graphical displays makes navigation faster and more obvious, especially if the handheld screens work the same way as the main workstations - not all do.
Other uses for them include storing photos of menu items, as well as recipe ingredient and preparation information for guests who need to check for possible allergens. It’s even possible to store training videos on the units. Despite the improvements in usability, though, there’s still debate as to whether it’s worth the time savings if the server is focused on the equipment instead of maintaining more eye contact with the guest.

A Manager’s Assistant
The recent availability of standard wireless protocols such as 802.11b also means that these units could be part of a wider, more multi-application environment, with possible links to a hotel’s property management system or to e-mail alerts. This has considerable potential, but more as an aid for managers than servers, who probably don’t need any additional distractions.
A manager, on the other hand, can benefit greatly from knowing that a frequent-diner VIP was just seated at table 12, that two servers are late checking in for their shift, that it’s been 20 minutes since the check was printed for table 8 and it hasn’t been settled yet (are they still in the restaurant?), that the group at the bar has been ordering drinks at an unusually fast rate and might need to be cut off, and so on. Larger operations might well keep a pool of standard PDAs for use by servers and managers, as well as for taking inventory in the storeroom using their built-in infrared scanners.

Do You Have a Reservation?
Restaurant reservations is another area that’s often seemed to have more potential than the market has been ready for. I saw a specification for such a system 20 years ago, intended to handle bookings at a two-hotel/25-outlet complex, and it would still be useful today for similar operations, but the concept hasn’t seen universal success. Several vendors came into the market over the last few years, but most failed to get a client base large enough to be viable. Open Table and iSeatz are prominent as the principal survivors.

The application is probably best suited to markets where a critical mass of restaurants is represented, and in a format where availability can be checked for several at once. Widening the concept to include direct Internet booking of other guest-related activities (entertainment tickets, spa appointments, tee-times) would also seem like a natural extension.

Wait-list management at the local level has more universal-applicability, however, especially combined with a graphical table-status screen, and several POS systems allow operators to maintain one. The data gathered from these can be very useful later on for management analysis, to identify just how heavy demand is at peak periods, how long guests have to wait on average, and how many leave or no-show.

Table management information can also be very effective in high-volume locations, especially if the outlet has several rooms that can’t be surveyed quickly by eye. Some POS systems incorporate these into a layout diagram screen for the hostess stand, using color codes to indicate table ready, check printed, etc. Others work in conjunction with a separate system that the bussers use to indicate when a table has been re-set and is ready for the next guests.

Either way, they can be a real boon to improving table turn times and to seating guests at the most appropriate table. Recent studies on revenue management for restaurants, based on revenue per available seat-hour (RevPASH), have shown the value of even small improvements in turn times in your highest-producing time slots. As always, though, you have to know your own environment well to use these tools most effectively. There’s a fine line to be drawn between improving profits through faster turns and upsetting guests who want a relaxing experience. Even with the best tools, keeping guests happy while maximizing revenue is still an art.

Frequent-Diner Programs
Speaking of guest satisfaction, there’s a growing use of frequent diner programs. Several POS systems can set up databases to track their activity, usually identifying the guests via some form of membership number or a mag-stripe ID card. Multi-site operations with a centralized database can more easily extend the recognition rewards across all sites, of course, to the benefit of all.

In a hotel environment, an integrated PMS/POS system (such as those from Springer-Miller, Multi-Systems Inc. “MSI” or Visual One) has the great benefit of a single database, leading to frequent guest recognition in both the hotel and restaurant and to a more accurate view of the guest’s overall value to the organization. Greater integration of more specialist vendors’ different POS and PMS databases could be really useful in a high-profile environment; hopefully this will become more common as PMS interfaces continue to improve.

The ability of POS systems to interface with other applications is definitely improving. On the PMS front, the standard interface to post charges to a guest’s room is a given, but the amount of detail transmitted to the PMS is increasing. Often originally limited to just four subtotals (food, beverage, tax and tip), many interfaces now send up to 16 sub-categories, leading to more accurate charge handling and data analysis in the PMS. A few POS vendors also allow for the complete revenue subtotals to be sent to the PMS at end of day, not just the room charge totals. This can be very handy in the speedy preparation of the nightly operations flash report.

Some POS vendors go for even greater PMS integration in an attempt to provide both a higher level of guest service and a reduction in the number of disputed POS charges at check-out time. These high-level interfaces duplicate the integrated PMS/POS systems’ ability to let the front desk clerk pull up the full line detail of any POS check on the guest’s folio. They can also let the guest check out of the PMS from a POS terminal, say from the coffee shop after breakfast, and let him or her know that a message has been left in the PMS for them. Current examples are available between MICROS’ POS systems and its Fidelio PMS products, Silverware’s POS and Northwind’s Maestro PMS, and Geac’s CTC POS and the Geac-UX PMS now sold by Starwood.

Other POS interfaces help integrate them into the whole array of restaurant-based systems, including recipe analysis/F&B ordering products (such as ChefTec, FoodTrak, Eatec and Adaco), timekeeping/scheduling products and general accounting systems, the latter usually to ensure a common vendor file in accounts payable. One interesting niche interface allows the POS to control other electrical equipment on a timed basis; Silverware, for example, uses this in pool halls to activate the lights over pool tables rented for specific periods.

Self-service Kiosks
As POS system user interfaces have become so much more intuitive, many of them can now be used directly by guests on kiosk hardware. This isn’t just for direct order entry in a quick-service environment, though such units can certainly help handle peak traffic loads in busy outlets. Other uses include the capture of guest feedback, or, with the ability to charge to credit cards, selling guest-oriented retail products at unattended locations.

One example is MICROS’ iCARE customer-response screens, where, in return for a kiosk-printed discount coupon applicable to future visits, the guest keys in the check ID number from his receipt and responds to specific service questions tied to that exact transaction in the POS database. The guest can also access the comment site over the Internet, printing the coupon locally. Either way, the outlet receives very precisely targeted feedback.

Another is Geac’s testing of Remanco workstations with units that can write to mag-stripe cards instead of just reading them. This would allow the POS system, either at the cashier’s workstation or at kiosks, to generate stored-value cards on demand for use in other vending systems. Guests could check the remaining card balance themselves at any time and buy additional top-up funds as required.

What about ASPs?
One issue that the Internet has brought to the forefront is that of application service provider (ASP)-based operations, where the system server is at some location remote from the restaurant, all workstations onsite are linked to it over the Internet, and use of the system is charged on a monthly or per-transaction basis. The remote location can be at a restaurant chain’s head office, at the vendor’s site or at a third-party ASP’s operation.

The latter, although the core of the original concept, is quite rare since it adds another layer of cost and complexity to the configuration, but the other two situations are relatively well-accepted. Advantages include the removal of server support tasks from the restaurants, and the far simpler analysis of data across all outlets, since their data is already in a single database. The concept is well-proven for non-time-critical applications such as accounting or purchasing, using either the Internet or other wide area networks for communications, and this option is available from many vendors. More recently, it’s being offered for POS systems as well.

The two principle factors in an ASP decision have been, first and foremost, functionality – does the system do what I want it to, regardless of its configuration? – and secondly, cost. You may be leaving behind server costs and support hassles, but you’re adding in communications costs and a never-ending payment; fees are often set at around the same level as a two- to three-year lease for the complete system, but continue as long as you use the product. Only you can put a value on the tradeoff. And of course, especially for the POS system in the thick of the live action on the restaurant floor, there’s the ever-present worry of what happens if you lose the connection.

Restaurants have long recognized the need to keep operating in the face of the fragility of their systems, and vendors are equally well aware of the need to keep things moving. Workstations, especially the purpose-built all-in-one units, often have built-in abilities to keep functioning if the onsite server or network goes down, opening and settling checks with order slips generated on their locally attached check printers instead of in the kitchen.

In a traditional on-premise system, it’s not uncommon to have a back-up server, carrying a duplicate copy of the data files and capable of being switched quickly into the primary role if the main server fails. Workstations are also very reliable – SQUiRREL, for example, now offers a seven-year warranty with its units – but a wise operator will always keep a spare workstation and printer on property and know how to swap them out quickly, just in case.

For these reasons, the pure ASP configuration, where the workstation is just a simple PC using browser software to display information which is stored and manipulated at an offsite server, isn’t really appropriate for a restaurant, where much of the activity involves short-distance, time-critical communications between POS terminal and kitchen. The more common approach is a hybrid, using a small server onsite (or even the workstations themselves) to cache critical data. A back-up communications line – even a dial-up connection – can substitute for the main Internet link in an emergency.

One useful concept is the 24-hour rule; if you can live without a function or piece of data for 24 hours it can stay on the central server. If not, it must be available locally, either on the workstations or on the server. A number of trial implementations are under way – InfoGenesis is probably the most prominent vendor in this area – and as more real-world operational experience is gained, the deciding factors for other companies will become clearer.

Vendor Reputation Matters
The vendor has become a more critical part of the equation than ever. Since there are so many POS systems with quite similar functionality, the vendor’s (or distributor’s) reputation for service and support becomes even more crucial.

Established vendors can’t afford to rest on their laurels. With the wide availability of suitable hardware and certainly no end of good ideas on system design and screen layout, there will always be plenty of new competitors to challenge them, especially on a regional basis where personal support is easier to provide. Seattle-based Dinerware is a good example of what can be achieved in a short time with the right focus; every region will have similarly ambitious start-ups to keep the established brands on their toes.

There’s clearly a wider range of technology options available to restaurant operators than ever before, and many companies are ahead of their hotel-oriented counterparts in making good and inventive use of them.

But keep in mind that not every innovation is applicable to every situation, and that everything you introduce to the pressure cooker of restaurant operations must match your real world needs to really earn its keep. Like a good chef’s knife, the right tool well-matched to the task can be exceptionally cost-effective.
Jon Inge is an independent consultant specializing in property-level technology. He can be reached by e-mail at jon@joninge.com or by phone at (206) 546-0966.

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