Consolidating financial data can be a daunting task when hotels and restaurants lack standardized back office applications and systems. This creates a number of challenges as well, including difficulty analyzing and generating customized reports. More and more hospitality companies are moving their back office systems online to save costs and improve productivity.
Moving real-time information
Al Copeland Investments, a privately owned management company in Louisiana, comprises 30 different restaurants, 30 franchises, and 19 different corporations. Several years ago, the company relied on Platinum for Windows as its off-the-shelf accounting software.
Shari Albrecht, controller for Al Copeland's restaurant division, says this software didn't cater to the needs of those in the restaurant industry. Managers couldn't get information they needed on a daily basis and the system didn't track food costs. Also, owners had to wait until the end of the month for the controller to generate a profit and loss statement.
In 2001 the management company started its conversion to Compeat Back Office Software (www.compeat.com) in different stages with a few locations a week. "Each conversion, for instance daily sales reporting, accounts payable, and inventory, was simple and smooth," apprises Albrecht.
In April 2006, Al Copeland Investments added a payroll module. Training occurred in mid February from a trailer since many people were still displaced from Hurricane Katrina. Microsoft Live Meeting enabled these employees to dial in and see exactly what to do.
"The conversion to Compeat was so simple our COO asked if the conversion had even taken place," Albrecht relates. "No one in operations had been complaining, so he didn't think it had happened!"
Al Copeland Investments has realized a number of benefits from moving its back office system online. Users can get information at a quicker pace, including next-day reporting. The transition enables the management company to eliminate several systems and go down to one.
Driving data for dashboards
Different point-of-sale (POS) systems served as a driving need for The Palm Restaurant Group, an 80-year-old family-owned company with 30 restaurants around the country, to examine moving its back office systems online.
Kelly McCardle, IT director at The Palm Restaurant Group, says corporate was asking store managers to complete significant amounts of data entry because they couldn't get the information everyone needed out of the POS system -- information such as product mix, employee performance metrics, trends and average checks. Corporate then had to consolidate these 30 Excel spreadsheets (one from each restaurant) and transform all the information into its own Excel spreadsheet.
"We had a real need to stop the manual input of data because it's time consuming and you run the risk of lots of user error," informs McCardle.
The Palm Restaurant Group selected Mirus (www.mirus.com) because it did enterprise-wide reporting and was POS neutral. This transition went hand-in-hand with the company's rollout of digital subscriber line technology in 2003. In first quarter, it polled the data to Mirus' data warehouse for validation. After training the project was fully operational by third quarter of 2003. Employees now log in at the Mirus Web site to access information and reports. One of the greatest benefits of this system is automated daily reporting, which means reports are ready online by 9 a.m. each day. Previously, restaurants printed nightly sales, entered the data into Excel, and then reports would go out to owners by 3 p.m.
The Palm Restaurant Group also established an executive dashboard for managers in 2005 using this sales information to help them run their restaurants more efficiently. It provides tools to help operators know how they're running their restaurants. The dashboard monitors performance metrics and shows a snapshot of the restaurant's performance in the last four months in color-coded key performance indicators.
"It's a wonderful tool since it points to a danger area early enough to start fixing the problem rather than letting it get out of hand," highlights McCardle. "General managers love it and show it to their staff. The results are also tied into their yearly bonus."
ZMC Hotels, Inc., a Minnesota-based company with 30-plus hotel properties and 50 legal entities, added Profitvue Enterprise back office from Aptech Computer Systems (www.aptech-inc.com) in 2003 to consolidate operating information at ZMC's home office. Before installing this system the properties were feeding information into corporate, but managers at the properties couldn't review the financial information before it was sent out.
Raija Macheledt, CFO and treasurer at ZMC Hotels, says the organization has experienced a number of benefits by enabling hotels to run their own accounting systems from the corporate back office application over the Internet. These include generating financial statements within 24 hours rather than two weeks and providing managers access to detailed information at any time in the Webvue Internet-based property accounting application.
"It's certainly much cheaper than a major computer system, and people are already familiar with the Internet so half of the training is already done," informs Macheledt.
ZMC Hotels added Aptech's Execuvue Business Intelligence system in 2005 using data from the properties and centralizing it in a business intelligence database to spot trends before they impact the bottom line. Macheledt says this enables them to create comparison reports with updates on a daily basis. "The key is we're getting information from the properties and turning it around into something they can view anytime," concludes Macheledt.