Clamp Down on POS Soft Costs: Top Implementation Strategies

By Joel Bragen, Founder, Joel D. Bragen Consulting, Inc. | November 20, 2008

Point of sale (POS) systems are a fertile ground for new development. With the stabilization of core functionalities in place, vendors are now turning their attention to the potential benefits that marketing, management and control applications will bring to operations, thanks to the vast amount of data that POS systems can capture. While the benefits of these new applications are promising, they place great demands on staff to learn, operate and effectively implement these applications; a process which translates into additional soft costs. If these costs are not anticipated and planned for during the system evaluation/budgeting process, the added functionality purchased may not be utilized, or worse yet, may end up costing more in employee turnover and unhappy guests.

Every time a transaction is performed on a POS terminal, useful data is entered into or generated by the system (details relating to guest, table, items ordered, transaction amounts, etc.). The system compiles and manipulates this data, but it is employees who must accurately enter it and interpret the output results in order for the system to be effective. These soft costs include learning, programming, maintaining, reporting and using reported information to modify policy, process or behavior. Though largely incremental, they add up to substantial time.

POS add-on modules fall into four general categories and the time demands for each are as follows:

Timekeeping and Labor Management
As a POS application, timekeeping is probably a net time saver, but the burden of maintenance and troubleshooting is likely to shift from what is normally an accounting or security role to food and beverage (F&B) outlet management. Labor management pertains to scheduling based on historical demand and peak hour analysis. This is a relatively new type of application to the F&B world and as such will require substantial time to learn and maintain. The burden falls on the shoulders of F&B managers.

Reservations and Table Management
Potentially a net time saver if replacing a manual or stand-alone system, this application requires restaurant hosts to understand interactions and limitations when used together with third party tools such as OpenTable. It can provide benefits to guests that should be considered along with the incremental overhead demands.

CRM/Guest History and Loyalty Programs
These applications, while prevalent in rooms divisions, are just beginning to make inroads into F&B. While the bulk processing of point accumulations and redemptions occurs behind the scenes, reporting and decision support processes can be complex since the results of the program must be analyzed and interpreted to determine its effectiveness and return. Traditionally coordinated by marketing staff and deployed through direct mail or front desk agents, POS loyalty programs can be deployed through F&B outlet staff where the one-on-one interaction with guests can be very effective. The caveat here is that every minute a server spends explaining a points program to a diner, is a minute taken away from another guest.

Purchasing and Inventory Management
This is potentially the most time and labor intensive of all the POS add-on applications. Depending on the size of an operation, it could require a full time role to corroborate and reconcile a perpetual inventory and coordinate results with the purchasing process. This application is usually best suited for properties with a substantial F&B operation where the application's benefits outweigh the additional labor cost.

Strategies for POS success
Given the time and costs associated with successfully installing and utilizing a POS system, it is beneficial to keep the following guides in mind during the selection process.

  • Identify the roles required to operate, maintain and act on the information produced by the add-on applications. Consult with department managers whose staff will be affected by changes in responsibilities during the planning stages. These can include marketing, accounting, purchasing and inventory, F&B control and of course F&B outlet staff.
  • Be aware of the incremental time and skill demands placed on line employees when deploying new systems. As the industry continues to leverage technology in the name of productivity gains and streamlining, they are the ones who assimilate the new equipment and new procedures while maintaining a cheerful face to the guest.
  • Negotiate with the vendor for refresher training courses. If possible, stagger classes so that new material can be absorbed over a period of time and not just in the week prior to going live. This is especially important in a new property when staff is in turmoil to meet deadlines and prepare for opening day. Training classes are frequently the first thing to get bumped from the priority list. It's better to focus on core functionality at the beginning. Then, as operations and personnel stabilize, bring trainers back to institute POS marketing and control modules. These negotiations should occur during the RFP/bidding process.

Joel Bragen is a veteran hospitality systems consultant with over seventeen years experience in systems management and operations. He has served as an advisor, implementer, strategist and project manager to a wide range of clientele including Millennium Partners, Doral Hotels and Resorts, Dolce International and Benchmark Hospitality.Joel is a graduate of the Cornell University School of Hotel Administration, Joel has held Microsoft Certified Professional and Microsoft Certified Product Specialist certifications and has worked as a Certified Technical Trainer with Executrain. For questions or comments, Joel can be reached at joel@joelbragen.com.

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