Assessing restaurant tech stack saves money, reduces management tasks

From the day a restaurant is launched there is technology in place, whether it's a stand-alone POS system, or platforms for handling HR needs, online orders and in-app activity.

In short order, a restaurant often finds its inaugural tech stack has grown exponentially with related costs increasing as well as management oversight time.

In the past few years, those tech stacks have grown broader and bigger as brands strive to understand customer behavior, get a grip on spend management and streamline to cut costs.

One solution is minimizing and using a one-stop shop. But the first initial step, according to leading restaurant brand leaders, is to assess and determine what's working well, what's providing a strong return-on-investment, and what's not in either scenario.

Is your brand too stacked?

That was the topic of a session at the recent FastCasual Executive Summit event, hosted by Networld Media Group, which draws executives from leading brands to share successful ways to build and manage restaurants. Networld Media Group is the parent company of Fastcasual, Pizza Marketplace and QSRweb. The company's next industry event is the Restaurant Franchising & Innovation Summit taking place March 24-26 in Kansas City, Missouri.

The session, "Is Your Brand Too Stacked?" was sponsored by Consolidated Concepts and moderated by Brian Foster, president of the Buyer's Edge Platform Back Office. Buyer's Edge creates back-of-house software including operation, payroll and accounting.

"Over the last five,10 years, we've seen the proliferation of applications, oftentimes single-use applications, that are available for our industry. A big part of the challenge, of course, is single-use apps which can be very inefficient," Foster said as he introduced the speakers.

The panel featured Steve Brooks, sales director at ArrowStream, a foodservice leader in supply chain software; Prakash Karamchandani, co-founder of Balance Pan-Asian Grille, which launched in Ohio in 2010; Eric Knott, COO at PDQ Restaurants and Andrew Maxwell, owner and operator of Boojum, Ireland's largest chain of Mexican fast-casual restaurants.

Building the tech stack

When a restaurant launches, it's in a learning phase and figuring out what to measure, how to control it, and what technology to implement, said Foster. Then comes the growth phase where the enterprise lays in a structure and starts to scale and mature as a business. He queried the panelists on what they consider essential components of a tech stack and what's needed to operate efficiently and effectively.

Technology that helps control costs and provides real-time insight is key, according to Maxwell.

"We've got to be able to understand and manage our prime cost at any point in our journey. So think about how you look at and manage your inventory, from understanding unit economics to being able to manage your recipes and profitability reports," he said.

Much of what a restaurant needs at the early stage can be found in a POS system, said Chandani.

"But as we grow, you end up with a martech stack, POS back office, and then some level of administrative software that all can be wrapped up with an out-of-the box POS solution. So I think the first way we go is to start to continue to invest in our martech stack, because we do so much of our business off premises," he said.

Knott noted the top tech stack pieces are three that interact with the restaurant team: POS, restaurant financials and HR.

"And the goal with all three has to be to make it easy for your team to spend more time with the consumers and not in the office," he said, adding that a decade ago it was much more of a silo tech stack approach with tech apps helping with payroll, scheduling, hiring and applications.

"So where we ended up was with eight different single-use situations on top of each other. You had to go to eight or nine different places to hire someone, terminate somebody, give a raise, etc.," he recalled. "But today we're with one service all the way through. It keeps our store managers out of the office and dealing with either the guests or the team members."

Brooks pointed out restaurant tech stacks also need a supply chain aspect.

"Nowadays, with what we've gone through for the last three years, supply chain and marketing is essential and essential that they communicate with each other and be simple," he said.

The complexity of the tech stack

Foster then asked panelists about what causes complexity in the restaurant tech stack environment and managing that complexity.

For Maxell the complexity came when restaurants began integrating delivery and more revenue channels.

"Delivery is the biggest opportunity that this industry has ever seen and will continue to be the biggest opportunity," he said, adding, "for me it's not just about adopting an omnichannel strategy and being present everywhere. It's about getting ready to fulfill and accept those orders and thinking about what channels you need to be on, thinking about how you aggregate those orders for your team, thinking about what are back of house inefficiencies that we can tackle."

Knott said the short answer to management is automation and integration.

"We use one provider and send everything through there. We don't have to manage, the separate three pads or if somebody's paying through a mobile app. Everything is aggregated through and integrates to the back end."

Choosing a single tech solution provider

When it comes to selecting a vendor for a single solution restaurant leaders should consider a variety of factors, according to the panelists.

The quality of the technology, as well as the roadmap, the people behind the tech company and the company's funding should all be considered said Karamchandani.

"You have to find somebody who's really zeroed in and focused on what it is that the value that they're trying to provide to the industry and are going to stay steadfast in that and continue to evolve and develop that product," he said.

Knott advised choosing a tech solution should involve more than the tech team or restaurant leadership.

"Anytime we evaluate any technology, we bring in a resource group of individuals from the organization to weigh in and get opinions. That could be a cashier, somebody that works the drive thru, a store manager. So we have a good group of opinions on how it touches each of them," he said.

Integration capabilities, as well as the potential for consolidation, are also factors to consider, according to Maxwell.

"Integration is probably top of mind functionality wise. Think about what your needs are today and what are they going to look like going forward," he said, adding, "You've got to understand what you can allocate and what do you want to spend."

Driving buy in

Another aspect to keeping a tech stack cost-effective and producing a good ROI is getting buy-in from all the stakeholders, said the panelists.

"At the end of the day, the team has to feel like they're a part of the decision-making process," said Knott. He shared an anecdote about a situation two years ago when the restaurant went from a legacy hardware POS to a cloud-based POS.

"One of the first things we did was bring in 10 team members to evaluate the solution. They had some really good feedback that the POS provider put on the roadmap," he recalled.

Involving stakeholders is all about communication, noted Maxwell.

"You know, the technology is there to make the life of your team easier, not harder. And like everything, you just have to continually monitor these things and push when you can and pull back whenever you have to," he said.

The advent of AI, drive-thrus

Two of the newest pieces to a restaurant tech stack are AI and the drive-thru component.

While a drive-through experience is not on Knott's roadmap as yet he views it as a dominant channel.

"The future I believe, is going to be AI and the drive thru and the voice," he said. "AI clearly has the opportunity to be a game changer."

For Maxwell, AI is all about being efficient and profitable.

"AI has now got the ability to shift us from guessing to knowing in terms of predictive analysis, helping us basically forecast the amount of food when we should prep, how much we're going to use. And then on the labor side exactly the same thing. I mean, that's where it's going to be really valuable to us in the future," he said. Providing all that will let restaurant staff spend more time with consumers and drive that customer experience, he added.

The "ultimate" AI scenario for Karamchandani will be the day when restaurant management can "wake up and have multi-location managers or store managers just get a quick summary of how the day went."

Yet it will never supersede what he views as most critical to success.

"At the end of the day, when the consumer comes in, that experience is still the most important thing. The reason I come to a restaurant is not just for the food, because everyone can create great food, but it's also for that whole experience. So, it's just a good balance."