Technology is hard for non-technologists. POS is definitely not an exception. It’s why we often cry foul (for shareholders) when non-technologists take a “not invented here” mentality and try their hand at technology to arrive at klugey, overpriced solutions. And there are no worse technologists than brick and mortar merchants.
If you want to do technology right, you have to remove it from the hands of non-technologists. Such is the story of ITWERCS, a cloud POS incubated at a large restaurant chain only to be spun off for a shot at success.
Chris Duncan assumed control of Hooters’ IT in 1996. At that time Hooters had but 40 restaurants on Panasonic registers. Knowing that IT and process automation would be critical to scale, Chris moved Hooters from Panasonic registers to Micros 3700, a growing restaurant POS system at the time.
If memory serves we were the first Micros RES EM (Enterprise Management) customer in the market,” shared Chris. “In total we spent something like seven years on Micros and experienced a lot of issues extracting data out of the Micros databases. We thought the solution would be a change in POS providers so we moved to Radiant’s Table Service Software. This was before Radiant bought Aloha, mind you. After that acquisition, however, Radiant pretty much gave us an ultimatum: upgrade to Aloha POS or buy the source code and run Bluecube yourselves. Such is the reality when a POS system is being end-of-lifed.
Chris Duncan, ITWERCS CEO
Since Hooters had slowly built up their own internal data center Chris decided to move the Bluecube system into their datacenter and support it themselves. “The experience taught us a good lesson and we decided we needed to be more independent. So while we were supporting Bluecube/Radiant Table Service, we started building our own cloud POS as a future solution.”
In 2007 Hooters launched their own cloud POS, in their own data center, with P2P encryption, entirely replacing Radiant. By 2009 Hooters had deployed their POS to Microsoft’s Azure Cloud. The POS started with the barebones functionality: inventory, point of sale, and kitchen display systems (KDS). Over time Chris and his team made enhancements to labor, online ordering, waitlists, reservations, and integrated marketing.
What happened next would be critical for the viability of the POS.
Nobody would argue that Target and McDonald’s have better software engineers than those employed at Google and Facebook. The reality is that the cultures of the two types of organizations are drastically different. No matter what idiotic proclamation a retailer makes about being a “technology company that serves food” it’s impossible to move past the fact that the costs and revenue-generating products of one type of business look nothing like those of the other.
Which is why in 2016 Chris bought the POS software from Hooters. By moving the software effort outside of Hooters it had a real chance for innovation and a software culture. Hooters would still license a copy of the POS but Chris would be free to hire engineers and sales people that better fit a SaaS model.
That new company became ITWERCS, and it offers a POS built for multi-unit restaurants. “We’re not in a rush to take over the world and we use a combination of direct sales and select resellers. We do have single-unit operators though our history obviously makes us competitive upmarket with larger brands,” Chris explains.
We first noticed ITWERCS when they did something that most POS companies did not: partnered to extend their functionality.
As a previous operator I had inconsistent data published across the internet. We had customers in 2010 bringing in menus from 1995 and asking us why our pricing was higher. They had no idea that they had found an old menu but wanted us to meet pricing nonetheless. By building an API connection to YEXT on ITWERCS we could enable our customers to take control of misinformation and syndicate consistent information to over 100 different sources to publish one version of the truth.
Chris Duncan
This build, buy, partner conundrum is at the heart of many conversations we have with POS and payments companies and it’s an ongoing discussion within ITWERCS too.
We will integrate to anybody with an API. In approaching what we decide to build we calculate the amount of money a customer would pay to a third party to use their solution over 24-36 months. If it looks substantial we undertake building it into our solution to save money for our customers.
Chris Duncan
This is a very dangerous game, of course, and one only need examine how it played out at Micros and NCR to see that it’s an impossible task to not only build but sell and support much beyond core POS as a POS company.
ITWERCS has spent time keeping their POS updated however, and is not chasing bolt-on modules at the expense of their core value. Local data is kept at the store-level and the POS could run offline for a month. A site controller consolidates transactions to stream updates to the cloud. Data files are cached on-site so an internet failure means terminals still work, the KDS still works, and checks can be passed between registers on the local network. That’s a big difference from where multi-unit solutions like Aloha find themselves these days.
POS is a core platform for a whole business. Without a good POS a business is in trouble. A POS needs failover and redundancy, EMV, and secure payment methods. If a POS doesn’t solve core business functions then it’s not worth very much.
Chris Duncan
ITWERCS is demonstrating some good lessons on resource prioritization, and it mirrors much of what we’ve written about previously.
- Focus on your core. POS is a very hard business by itself, and you must do that right or everything else you attempt is for naught: if nobody wants your POS, what good is your bolt-on?
- Partner as soon as you question your ability to deliver a bolt-on at the same speed and level of innovation as the market demands. Technology is increasingly a game of iteration and POS companies can’t do this across all facets of a merchant’s needs
- If you can’t find a partner, establish your own. Following what successful companies have been doing for years, catapult a labs division, seed it with capital, and cooperate with competitors to bring a new product to market that all of you can collectively use. Remember, a rising tide lifts all boats
- Recognize that the definition of POS will change, modifying the core value you will provide. But it might change in ways that mean resources spent chasing bolt-ons today are loser strategies tomorrow. For a realistic example, note that physical interfaces between customers and businesses are rapidly changing; those that don’t stay on top of the innovation will miss out like the legacy POS providers that never bothered with cloud investments. So what happens when natural language interpretation hardware are the new norm?
There’s more than enough meat on the bone around core POS to keep honest POS providers busy innovating. Partnerships should become a core strategy for success.
