Background Image

Image showing the typical applications used in restaurants

Aug 29

The State of Information Technology in the Hospitality Industry

The restaurant industry is undergoing a technical transformation that's similar, in some respects, to what the lodging sector experienced 8-10 years ago.  At that time, there was no synergy or industry best practices to guide development.  In most cases personal preferences of developers and supplier finances resulted in patch after patch to legacy software.  The result was a very slow transition and a high cost to operators.

Thankfully, the restaurant sector didn't have to face as many hurdles when its transition began 3-4 years ago.  Vendors have embraced cloud technology and with it, the norms and standards for platform development.  This movement also drove the move to generic "off-the-shelf" hardware.  This resulted in reduced hardware costs for operators, along with reduced maintenance costs for vendors.

So where do we stand now? Hospitality operators are drowning in “Information Technology”.  Most of it from different vendors. How do they make sense of it all and what really matters? The stakes are high and in a lot of cases it’s their future. What road map should operators follow and what should they avoid?

1 - Cloud Technology
At this stage almost every vendor's software or app is online.  This includes POS, reservations, waitlist, loyalty, CRM, staff attendance, online ordering, loyalty and, much, much more.   Use what you need now, but plan for the future.  Find the right mix for your operation but ensure the various software platforms communicate with each other now or have a realistic plan to do so in a time frame that's acceptable to you.

2 - Point of Sale
Believe it or not, there are still vendors selling legacy systems that require onsite installation of software on dedicated hardware.  In most cases, these are excellent products with huge install bases, but clearly there are challenges to providing seamless integration with the newer cloud based systems on the market.

3 - Digital Platform Integration
Making sure that your systems and software can communicate with each other either requires deep research or a leap of faith.  Determine or ask what key metrics result as a product of the integration between two products and understand what that does for your specific operation.  Clearly some interfaces are better than others.  Your selected vendor(s) should be able to clearly list the key features of their interface and how you will benefit.

There are 3rd party companies out there that only develop interfaces.  It works like this.  The 3rd party has developed an interface to a specific POS system and they also have an interface to a loyalty software vendor.  This enables the 3rd party to handle all the communications between the 2 vendors, and the configuration within their platform produces the expected results on each end.  In a pinch, this can be a stop gap measure for operators until your selected vendors can create their own direct interface. 

4 - "AI" Artificial Intelligence (or as I like to call it "Adaptive Intelligence")
There has been a lot of talk about machine learning and how it's going to turn the hospitality industry on its head.  I've seen some vendors try to apply this to telephony and reservations environments with failing grades.  How many restaurateurs do you know that expressed a desire to have a machine answer their phones.

Here are 3 realistic uses of AI.

a) Having said this, there are certainly a number of hospitality applications where AI can be very useful for restaurant owners.  Imagine a customer goes to the restaurant's web site and he/she clicks on the wine list.  If that customer is partial to bold cabernet sauvignon wine, the web site could only show that portion of the wine list.  AI can do this very simply because it can either identify the customer on your web site by a “tag”, then flag either previous visits and associated wine item sales or  “cabernet" selected in wine or beverage preferences.  It's all about streamlining customer views to their demonstrated interests.

b) Environmental monitoring is another good use of AI.  There are devices and software that can monitor lighting, temperature, ambient volume, etc. in various rooms in the restaurant or facility.  Just setting the temperature to 73 degrees does not account for body heat and ambient noise as the room fills up.  These adaptive systems can look at the existing temperature, along with the reservation and seating flow to start moderating temperatures and music volume as the night progresses.

c) In the case of restaurant marketing, unknown or new customers could be potentially shown different restaurant promotions.  Then based on "click through tracking" the customer could be sent automated & scheduled email or text messages to spur the customer to select a promotion.  This sets the stage for real-time ROI for any online promotions that the restaurant offers.  The list of possibilities goes on and on, but the good news is a lot of the design and implementation of these automated marketing tools can be handled by DIY operators or their staff.

In closing, the important message is to keep informed about new features and applications that restaurateurs are embracing.  Don’t feel you have to settle for the systems footprint you have.  Gentle prodding of your vendors usually will produce results.

If you would like to see more on “Automation” or other topics, please subscribe below.