The editorial comes from PlateIQ, a modern software company in the restaurant back office/accounting space. It was so good we asked if we could repost it. Why? Because it further expands upon the lessons we advocate with real data.
I recently met an operator eager to share his frustrations with his recent, expensive, “all-in-one” back-office technology deployment. This operator had spent a large portion of his annual CAPEX budget and countless staff hours transitioning to what he believed was a comprehensive, intelligent solution in hopes of overhauling his back-of-house and freeing up staff resources for guest-facing tasks.
After speaking with him for just five minutes the problem became clear: He was attempting to use what was originally designed as a scheduling app for his accounting and other core operational functions. The solution, however, wasn’t working. Even after months of troubleshooting, it still didn’t perform the specialized tasks the operator needed, exacerbating the problem. You can imagine his frustration when I explained that his expensive solution simply could not support every area of his operations.
Unfortunately, this conversation is one to which I’ve grown accustom. Across the country, I hear from operators who are dissatisfied with the performance of their “comprehensive” tech solutions and are tired of complex and lengthy integration processes.
The Importance of Specialization
In other industries, all-in-one solutions are a thing of the past. Take construction, for example. While Swiss Army knives are handy in a pinch to cut something quickly or tighten a loose screw, construction professionals don’t use them to build homes. Instead, they rely on highly specialized tools to make their jobs easier and more efficient, and to deliver a better final product to the homeowner.
Looking at a different industry, the late 2000’s was a pivotal time for consumer technology with the iPhone just having been released, and Google quickly following with the launch of their Android platform. At that time the global tech community was debating a central question: Would there be 1,000s of apps, or one app to rule them all?
Well, we all know how that ended; consumers demanded specificity, and the app economy exploded with apps for nearly every need. What’s more, instead of attempting to exert control over the market by deploying rigid, fixed systems, Apple and Google made their app ecosystems open-ended. This way they are able to foster ongoing innovation and deliver maximum functionality and convenience to consumers. We see this represented in the restaurant industry with software such as QuickBooks or Xero that allow for the implementation of more specialized tools.
Restaurants Are Not All The Same
The restaurant industry is often treated as one big segment – one with a million units and $700 billion in annual revenue. People who work in the industry, however, know better. They understand that the market is infinitely complex, with operators of all types and sizes.
For example, at the most basic level, restaurants can be divided by size:
- Single location mom & pop
- Single location high volume
- Regional, up to 30 units
- Mid-market, 30 to 100 units
- Large, more than 100 units
And also categorized by segment:
- Quick service
- Full service
- Fast casual
- Cafeteria
- Corporate dining
- Stadium and concessions
These are just two of many dimensions by which the restaurant industry can be segmented, and, when you perform such an exercise, you begin to understand the vastly different needs of each segment. Mom-and-pops, for example, typically have only one or two people running their entire FOH and BOH at any given time. On the opposite side of the spectrum, large operators with thousands of units have above-store leadership teams, each deeply focused on one area of their operations. These large organizations need specialized, advanced tools that perform at the same level as software designed for other industries.
All of this begs the question: Why don’t more software developers account for the dramatically different needs of different restaurants? Developers should know better; good software starts by addressing a central problem and developing personas of user segments who need the tool the most.
In addition to the one-size-fits-all problem, most current restaurant software offerings, especially BOH tools, are rooted in outdated technologies. Some of the so-called innovative solutions still use primitive one-way data exchange functions such as FTP, a technology that hasn’t been used in other industries for more than a decade.
Also, some of the largest developers in the space still insist on closed-systems, which suggests that the provider’s profitability takes priority over delivering high-performing and effective solutions to customers. Restaurants deserve better.
The Bottom Line
It’s understandable why operators would seek one solution for all their needs – after all, nobody gets into the restaurant business because they are passionate about software. However, rather than buying into “silver-bullet” solutions that perform marginally (at best), operators should learn from other industries and focus on the best specialized tools to meet their long-term strategic goals.
Running a restaurant is hard enough without having to relying on inferior tools. It’s time to stop building our restaurants with Swiss Army knives.
