Any network downtime can be devastating to a restaurant's business. Many operators are turning to service providers for managed networking solutions -- taking the monitoring, troubleshooting, and restoration out of their own hands.
Advantages include faster credit card processing, real time data access, security, redundancy, online hiring and training, and instant menu downloads. Nothing, however, is perfect.
HT digs deeper to find the pros and cons of managed networks.
Time is money
IT managers find time savings to be the biggest cost benefit of managed networks, at least initially. Connection speeds and bandwidth are increasing all the time, and future applications may depend on them. Faster credit card transactions speed table turns and enhance customer service, both of which drive up profits. Costs per transaction can also be lower with better connectivity. Denny's owner/franchisee and Board of Directors member Joe Terrell explains: "Credit card transactions are almost instantaneous now, compared to one to five minutes before.
It used to take eight to 12 hours before to update the menu, and it now takes 30 seconds and one button via Denny's system. Spyware and security are automatically updated, and Denny's 24-hour call center is our IT department now." Terrell was the first franchisee to update to Denny's Ã.‚¬ËœTechnology Refreshment Package,' adopted by Denny's 500 corporate owned restaurants two years ago. The package includes broadband managed IP service from Hughes Network Systems (www.hughesnet.com), IBM POS (www.ibm.com) and backoffice terminals from Agilysys (www.agilysys.com), XPIENT POS software (www.xpient.com), and Menu Link's (www.menulink.com) labor scheduling software.
Terrell says it cost around $28,000, "but it's paid for itself in the year since we installed it. The system gives us knowledge to plan with, accounting-wise, including variance reports." His only regret is that he hadn't bought a heater for his satellite dish for its first Chicago winter.
"We had a problem one morning, so I went up onto the roof to check the dish. It was covered in snow, but worked the instant I cleared it off." He has no fears regarding early adoption, saying, "I don't mind being a Beta site -- just not an Alpha.
You want to be in front of the parade, not in back behind the elephants." Dave Tallbut, network administrator for The Holland Group, which operates 40 Burgerville restaurants in Washington and Oregon, praises the speed advantage of the company's managed network, also installed a year ago.
"The time savings come down to dollars versus downtime. Compared to dial-up, we have fewer phone lines now and DSL is saving us 46 percent on connectivity per location." New Edge Networks (www.newedgenet works.com) provides Direct Connect with two frame relay connections to the credit card processor, cutting out the link to Burgerville's host location/corporate office.
"Before, our host location was down once for six hours, and we lost $20,000 in lost credit card sales. Now we have redundancy, and a trouble ticket is opened automatically." Tallbut still sees room for improvement, however.
"Our Service Level Agreement allows up to four hours' recovery time per restaurant, and I've been offered credit for hours down after four, but that's pennies in the big picture. I want four hours' restoration."
Billing is another area of time saving for restaurants using managed networks. "It's great having one point of contact for billing issues, new services, outages, etc.," says Mike Repetti, director of network services for 60 Islands Restaurants and five regional offices based in the Southwest.
"I'd never want to go back and do this all myself. The cost benefit is in what my time is worth, for resolving issues, configuring or even buying a firewall. Leaner IT is now possible for us." Islands Restaurants uses AuBeta Networks' (www.aubetanetworks.com) WAN-based solutions, including its managed firewall service, platinum service with dial-up backup when needed, and a high speed DSL connection.
"We now have a secure network behind their firewall and WAN, and employees have access to business- related sites only, saving even more time," Repetti explains.
Multi-unit restaurant operators can connect their restaurants via the same managed network, enabling real-time access to sales data and inventory control between locations. "We have connectivity and access throughout Islands' corporate offices and restaurants. I can now push information out to individual computers and wireless devices -- anything with an IP address," says Repetti. He advises other restaurateurs to "definitely make the jump to managed networks. Otherwise you're juggling too many companies/balls in the air.
But it's got to make sense for your size." Bruegger's Enterprises, with 260 bakery- cafes in 19 states, turned to MegaPath (www.megapath.com) to manage its POS and polling applications and deliver WiFi access to its customers. MegaPath's broadband access speed enables Bruegger's to poll nightly every restaurant's inventory and sales data, improving the accuracy of its forecasting and the responsiveness of its supply chain -- reducing the gap between orders and deliveries.
Bruegger's is also deploying a new POS system for real-time credit card processing, authenticating cards in real time and delivering even faster transaction speeds.
Expanding businesses are turning to managed networks to find and solve connectivity issues long before new stores are opened. "They find the prequalifications and providers locally for all restaurants," says Island Restaurants' Repetti. However, Chris North, director of IT for Bruegger's Enterprises, sees this as a potential drawback of managed networks.
"There's an extra layer the managed service provider adds to lead-time for services, especially for new locations," says North. "The other drawback is service availability. Managed service providers tend to have contracts with specific providers. Sometimes you run into locations that are serviced by phone and cable companies that they don't have relationships with, so you can't get service through them for that location," he explains.
Burgerville is running ten applications across its managed network every day, using MPLS (Multi-Protocol Label Switching) to tag data and automatically prioritize critical applications -- for example, letting credit card transactions and VoIP go through before file downloads, video surveillance, etc. The company is now converting ten restaurants and its training center to MPLS in order to switch to VoIP. "MPLS is the only possibility for getting decent VoIP," Tallbut explains. "In the long term, we'll be using 25 percent of locations as training restaurants, using VoIP to convert them to a help desk after hours." He praises the fact that New Edge Networks maintains the hardware, so he doesn't have to worry about upgrade costs or compatibility issues. "We're also using Unicru's electronic employment application to filter out talent and do real-time assessments of applicants before they leave the building," he says. "It's increased our application to hire ratio, and reduced staff turnover."
So, what does the future hold? MPLS will play an increasing role in managed network applications, converging voice, video, and data on a single network while increasing the speed and efficiency of communications and data transfer. Bruegger's Chris North predicts that the expansion of technologies like wireless broadband (EVDO, Wi- Max, etc.) will enable restaurants to get new locations online quickly and in places where network access is difficult.
"Just don't assume that managed networks require no management. You still have to manage your service provider," he advises.