Back Office Intelligence

By Tammy Mastroberte, Contributing Editor | October 09, 2009

In today's economy, every penny counts, both coming in and going out, so when deciding to invest in technology, restaurant operators look for a quick return. Thanks to innovation in the back office arena, they are getting just that.

"New features usually cost money, but for me, the ROI is definitely there," says Don Stegman, director of IT at Granite City Food & Brewery, who is using Radiant Systems' (www.radiantsystems.com) Aloha Command Center for maintenance of hardware at the company's 26 locations. He is also using the system to send menu updates to all sites. "Before, we had to dial into each location to send menu updates, and I had two or three people sending updates. Now I only need one."

While many operators are leveraging back office technology to save time and gain efficiencies, others still are immediately adding up dollars and cents saved. This is the case at Tropical Smoothie Cafe, based in Destin, Fla. with 275 franchise locations. The company began testing Myinventory from MICROS (www.micros.com) at one site last November to track ingredients based on recipe files created in the system. After the reports showed the location was short six cases of strawberries each week, Jim Valentino, COO of the company, started looking into it.

"We realized employees were using a half scoop for the strawberries rather than a quarter scoop, so we went into the system and told all the locations at once to use the quarter scoop," explains Valentino. Six cases a week add up to 300 cases each year, and $8,000 for each location. Now the company is looking into other fruits used in its drinks to see how they can save.

The system also allows franchisees to gain control over their food costs. Managers input purchases for the week and then compare that to inventory at the end of the week, says Valentino. "I've been in the restaurant business since I was 16 years old, and I can finally get a perfect view of expected food costs to compare with actual food costs, and see exactly where the difference is going item by item," he notes.

Owners of another franchised chain, Culver Franchising Systems Inc., based in Prairie du Sac, Wisc., decided to test a snack combo pack at its more than 400 locations and realized they needed to run one report at a time in order to analyze its effectiveness. This instance led them to find a better program, and they ended up with RedPrairie's Performance Management (RPM) solution, (www.redprairie.com) based on Microsoft (www.microsoft.com) Business Intelligence (BI) technologies.

"It literally took me three weeks and 270 individual reports," says Paul Mullin, business analyst at Culver's. After implementing the RedPrairie solution, the same scenario can be accomplished in five minutes, he says.

But the true test of the system was when the company decided to measure its speed-of-service at the drive-thru after realizing customers were not stopping because of the long lines.

"We cook to order, so as you pull up to the drive-thru and place an order, that is when we start cooking," Mullin notes. "People know it takes longer, but we realized we were missing customers who would drive past, see a long line and keep going."

Culver's used the RPM solution to track how many times each location missed the mark of 270 seconds per customer in order to "find the sweet spot," says Mullin, noting it's a fine line between being too fast and inaccurate, versus getting it right but taking too long where customers get annoyed or don't stop.

"Our old system could show the average time it took per customer, but not how many times we failed to meet our goal, and RPM gave me a tool to drill down into the data," he says. As a result of this one report, the company saved $45,000 per year.

Back office meets iPhone
Tapping into a major trend, back office technology is getting integrated into mobile applications. The iPhone from Apple continues to dominate the cell phone market, and many companies across all industries are now offering applications that can be purchased and downloaded from the App store online or directly from the phone. Soon, restaurant operators using Action Systems' Restaurant Manager (www.rmpos.com) can benefit from this option as well.

After searching the Action Systems' Web site for information on another product, Jack Manousos of Killarney's Publick House in Hamilton, N.J., who was already a customer, discovered an iPhone application offering real-time access to back office data on the go.

"I called them and begged to be a beta test on it, and started in May right before I went to Greece on vacation," Manousos says. "I was able to see real-time information about what was going on in my restaurant, including open checks, servers logged in or out and even sales. I can also set up alerts so if we are running low on steak, and I'm not in the restaurant, I can call the manager and let him know."

He even uses it while at the restaurant so he doesn't have to spend all of his time in the back office. After using the program for a couple of months, Manousos is considering upgrading his servers with handhelds. "If they are as useful as this application, I think it will make things a lot faster," he says.

Right now the application is in beta, and Action Systems has not announced the price structure, but Manousos says he is so pleased with it, he doesn't know how he could go back. "I'm getting addicted to it right now, so it will be hard to give it up," he notes.

Another sign that technology is changing is the ability to combine accounting, inventory and point of sale into one solution without the old challenge of interfacing disparate systems. For Sunshine Restaurant Corp., operator of five Buffalo Wild Wings locations based in Longwood, Fla. (and another 12 on the way within five years), the awkward interface of QuickBooks with a product management system wasn't cutting it anymore. Although the initial thought was not to replace its accounting system first, the company discovered Compeat's (www.compeat.com) restaurant management and accounting system as one package, and opted for a complete upgrade.

"Our entire back office from store level up to accounting is accessed through the Compeat GL, and each restaurant can directly access their P&L [product and loss] on a real-time basis," says Andrew Gross, president and CEO of Sunshine.

The system also generates the weekly orders for each location based on sales and inventory deliveries, and the corporate office can get a view of the entire company across the board. The system integrates with the POS, and deducts ingredients based on recipes created using the system.

"I can look at inventory counts and on-hand counts at each location, which allows me to move things around if we are running out of something at one location," says Gross. Restaurant managers benefit from customized P&L reports where data from Compeat is imported into Excel documents in real-time. 

The company rolled out the system in 2008, but just started using the recipe piece in 2009, and is now seeing how deep the analysis can go, says Gross. "We are seeing a reduction in our cost of goods already, and it is much easier to locate and correct any problems, and as problems come up, we understand more and more how we benefit from the system."
 

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