Why restaurants need mobile and cloud technology

April 17, 2014

By Larry Abramson,
CEO of Red Book Connect

A restaurant manager is also the Chief Everything Officer. Still, most managers have been stuck with technology that does nothing to make their 80-to-90-hour week more profitable and less stressful.

Instead, they are forced to manage restaurants from prehistoric desktops that sit in a back office and run costly, proprietary software that never pays for itself.

When busy tech, finance and accounting execs are running multinational companies from an iPhone 6,000 miles from headquarters, why are restaurant managers who take at least 22,778 steps per day running their restaurant using technology that can't move? When sales execs can look at the real-time performance of their salespeople across 30 countries, and marketing VPs can use billions of data points to target the right consumers with the right promotions, why do restaurants appear to be stuck in a relative Stone Age?

The reason is restaurant technology hasn't kept pace with the mobile and cloud computing revolutions that have transformed other industries — until now. Today, the technology is available and the restaurants that thrive in an industry of razor-thin margins will be those that weave mobile and cloud technology into a single operational 'command center' that can power a global franchise or a local restaurant equally well. Indeed, the sum of mobile and cloud technology will be even greater than the individual parts, and companies that learn to use both will gain a competitive edge.

Here's why:

Mobile means better management and higher morale

Desktop software is designed for workers who can stay in one place for long stretches of time. However, the modern restaurant manager is almost always in motion, walking the restaurant floor, talking with customers and stepping in to improve the service experience. In charge of operations, marketing, finance, technology, procurement, human resources, customer service and more, the manager often must pull out of the action or work excessive hours just to accomplish the tasks that are chained to computers and desktop software.

With mobile restaurant software, managers run the show with the smartphone in their pocket or a tablet, and employees become part of this system. No longer do employees have to constantly bug managers for shift swaps, roll their eyes at old coffee-stained training books or send managers on a calling spree when they get sick and can't work. Instead, employees can request a shift swap on their own phone and the manager approves with one click, whenever it's convenient to do so. Training is delivered over a mobile app, allowing workers to complete required certifications and training and gain knowledge at their pace. When someone no-shows or extra help is needed, the manager can hop on his or her mobile phone and notify the team in one touch.

When the average restaurant in America experiences more than 60 percent employee turnover per year, according to the National Restaurant Association, mobile has the power to boost morale and save managers from an average of 15 or more hours per week of recruiting work. Whereas a desktop takes all the clutter of restaurant management and outdated software and concentrates it all in one back office, mobile inverts restaurant software into a portable, birds-eye view of the entire business that allows managers to literally make decisions in stride.

Cloud equals operational efficiency without enterprise-sized IT costs

A few years ago, only the largest food franchises could afford to pay for expensive custom software, datacenters and the IT infrastructure that link together sales, inventory and human resources. For everyone else, desktops and paperwork could eventually produce the types of data, business intelligence and feedback that drive strategy — but only after it was too late to correct costly errors or replicate profitable trends.

With cloud computing, the IT game has changed — a family-owned restaurant can now leverage the same software and global data infrastructure as a Fortune 500 restaurant conglomerate. Where franchises were once hamstrung by IT costs, the cloud has reduced total hardware costs to wireless Internet, a few tablets and mobile apps. Any chain or restaurant, from local to global, can use enterprise-level technology without enterprise prices.

This means that when 200 franchisees log sales of chicken tenders or track their inventory down to the last ketchup packet, the managers see the data and, just as importantly, operational heads at headquarters see the aggregate data, the differences among franchisees and the real-time impact of marketing campaigns and promotions. You don't need a private datacenter to store this information or an IT army to manage the jungle of hardware and networking that would normally make this all possible. From a manager's smartphone to the cloud to the VP of Operation's tablet or PC, the raw data from a restaurant becomes visible and actionable in real time.

Mobile and cloud weds internal efficiency to opportunity

When you combine spaghetti and meatballs, peanut butter and jelly or gin and tonic (pick your poison), the sum is significantly better than the parts. Likewise with mobile and cloud technology, it's the combination that takes a restaurant operation from being efficient to strategic.

Restaurants operate on razor-thin margins, meaning that even a 1 to 2 percent savings is tremendous, especially when multiplied across several locations. Now, on a basic level, the combination of mobile and cloud technologies allow large and small operators to identify problems and resolve them quickly. Why is this location selling eight times more sushi than the other one? Why did customers redeem 1,500 buy-one-get-one-free drink coupons in San Francisco but only 300 in Tampa?

These observations can be reached immediately, so the analysis and response also are immediate. The customers become the new drivers of marketing strategy, inventory management and ultimately sales.

For instance, location-based apps now allow businesses to detect who is nearby, track what they have purchased and extend relevant offers. So take this to a restaurant setting. Let's say Tom Smith visits Super Sandwich twice a month and over a one year period, he has bought the roast beef sandwich 50 percent of the time.

If Super Sandwich manages inventory from a mobile device and stores the data in the cloud, they know exactly how much roast beef is in stock and its shelf life. Tom, of course, has the Super Sandwich app installed on his iPhone because he loves to get a free drink or half-off sandwich every once in a while. When he enters the restaurant, he opens the app to see what deal he can get.

If Super Sandwich is smart, they have detected Tom's mobile activity and have cross-checked his preferences against the inventory data at this Super Sandwich location. And if the location is overstocked with roast beef that is going to expire soon, why not extend a great roast beef deal to Tom? Super Sandwich could send a 2-for-1 mobile coupon for roast beef sandwiches to many people like Tom, use up the available inventory and make Tom very happy.

The point is that while mobile technology alone can improve management and boost employee morale, and while cloud technology can enhance operational efficiency and cut IT costs, it's the combination of the two that has the potential to connect restaurant operations with targeted marketing and communications and not only leverage operational efficiencies but improve revenue and the customer experience. Instead of hypothesizing that Offer A distributed to Audience B will lead to C percent increase in sales, restaurant chains can suddenly look at historical purchasing patterns and location-based, real-time data to incentivize the most profitable choices. In other words, the shift from Stone Age desktops to mobile and cloud technology is the shift from a guessing game to data-driven strategy that saves money, boost sales and creates happy, loyal customers.

Larry Abramson is CEO of Red Book Connect and also serves on its board of directors.

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