Savvy restauranteurs realize the untapped wealth of information held captive in our POS systems. Spreadsheets are one of the most widely used tools to organize all that restaurant data. However, maintaining spreadsheets with inventory tabs, costing tabs, labor tabs, daily sales tabs, etc. can become more of a full-time job in organizing numbers than in using the data to make informed decisions.
That is where Business Intelligence (BI) steps in.
What is BI and why do I need it?
Through our point of sale (POS) devices, we have access to an overwhelming amount of data, but data is meaningless if we don’t understand what it is telling us. What are those endless spreadsheets actually saying? BI turns raw data into practical insights we can understand, track, and use for improvement.
Most BI software providers offer real-time reports, charts, and graphs that are cloud-based, making them available on almost any device. In such a low margin industry, these reports are a game changer. If you were to compare two restaurants that operated exactly the same in sales, labor, food purchases, etc., and had one run on the owner’s instinct and the other run with the power of BI, the latter restaurant would almost immediately see an increase in productivity and a decrease in costs. The power to pinpoint problem areas removes all the guess work when it comes to making decisions that affect your bottom line.
Surprisingly, these are not as expensive as you might first think. As these systems become more affordable and easier to adapt, smaller operators are now able to take advantage of the same systems that used to only be available to large enterprises. Many owners/operators would argue that they pay for themselves within a few months.
When should I implement BI?
Here are a few indicators that it may be time to implement BI in your restaurant:
- You are finding inconsistencies in data collected by managers, caused by human error.
- You are experiencing logistical issues due to your data being stored in multiple locations.
- Cost of Goods Sold (COGS) are consistently too high (reducing your margins), and you can’t determine why.
- Labor for managerial duties, such as entering data and manually running reports is costing more than the software fees would cost.
How do I get started?
According to the National Restaurant Association’s Restaurant Technology Survey, 32 percent of restaurant operators consider their operations to be lagging when it comes to technology use; mostly due to concern about costs and difficult implementations. But with today's customizable and scalable technology solutions, it doesn’t have to be that way. Even though the journey of choosing a solution might seem overwhelming, there is a step-by-step process that can get you to the right choice.
Start by finding the right partner to help you. Understanding the value of data integration between multiple systems is essential to making the right choice. The amount of time restaurateurs waste logging in and out of multiple applications and manually reentering data (plus the added risk of human error) is costly to your operations.
Look for a provider who offers you choices and modular options that can be customized to include as many or as few features as you feel are necessary. A good partner serves as a consultant, helping you identify “the low hanging fruit.” For example, if you are manually creating schedules, automating this process could allow you to create a schedule 75% faster and reduce labor costs by 3%. Those cost savings can be used to fund the next step – perhaps inventory. The right partner should have solutions not only for today’s needs, but for the next 3 to 5 years.
Just keep moving through the process, and soon you will be in a much better place than you are today. Your only regret will be that you didn’t jump on the data bandwagon sooner; intelligently using data to make your restaurant business more successful.
Posted on Wed, Jun 27, 2018 @ 08:06 AM.
Updated on August 12, 2019 @ 4:34 PM PST.
Posted by Jennifer Day
Jennifer Day is the Customer Insights Manager with Ctuit/Compeat, a fully integrated restaurant accounting, back office and workforce management software, based out of Austin, Texas. Their end-to-end solution, extends the capabilities of a SpeedLine POS system, offering SpeedLine users powerful business intelligence. Learn more about Ctuit and Compeat on their website.| Author's website