We have many challenges in operating
and managing a foodservice business.
Whether a restaurant, catering operation, hotel, casino, so many other
operations, we look to technology to assist in become more efficient and
profitable. Systems create more formalized
process and control to increase the discipline of our operation. Making decisions on any system is not an easy
task and certainly we should spend some quality time conducting the proper
research. Here are some aspects to
consider during the vetting process:
Interfaces
versus Exporting. We participate in
an industry that have available to us many different types of systems. Think about all the technology that we have
available with different purposes (see figure): labor management, catering,
point-of-sale, back office, accounting, loyalty programs, and many others. The issue becomes how the data we receive from
the new system may or may not communicate to our existing systems. There is no one system to manage all aspects
of running the business. An interface is
a direct communication with other computers and databases. There is a relationship that exists between
systems. The ability of exporting data
from one system to another is not a direct interface. It is a manual process to move the data out,
possible reformat the data, so that it can be read by the receiving
system. This could take some time to do
and you may have to do it frequently. Ideally,
true interfaces are what is desired. When
research and vetting any system, time needs to be spent to understand how the
new system may or may not work with your existing systems.
Features
and Field Vetting: It’s one thing to
vet features of a new system, but a whole another thing to vet the fields and
structure of the database. When
reviewing any system, get into the details of each part of the database. As an example, let’s review some of the data
that you may want to have or know about on all purchased items for your
operation:
- · Item description field length.
- · Limitations, if any, on the number of unit-of-measures (UOMs) per item.
- · General ledger coding and tax flags.
- · Flags to annotate retail product, gluten free, non-GMO, kosher, allergens, and catch weight products.
- · Purchase specifications (i.e. size, color, grade, average weights, etc.).
- · Primary and secondary vendors identification.
- · Point-of-sale attachment if a retail item.
As
you can see, if you don’t look at all the details of the fields and capabilities,
you may find out post purchase instead.
Finding out about shortcomings after the purchase is not always the best
experience. The shortcoming may affect a
feature critical to your operation.
There are so many aspects of a system that you may review as well:
recipe cards and costing, physical inventories, banquet event orders, and so
many others. This requires more than
just sitting in on a one hour demo by the sales representative. Your decision
needs to be made on data. The more
research and vetting you do, the more satisfied you will be with the decision
you choose. If the sales account representative wants you to make a decision based on an hour demo, walk away.
Involve The Team.
To make the demo and vetting a success, involve all personnel that will
be affected by the system. Identify any
personnel whose hands are actually going to be touching the system and entering
data. They may have some questions that
come up as a true user that may not otherwise come up during the demo.
Maintenance Contracts and Customer
Service: Understand the terms for all other services
under an ongoing contract. It is not
unusual that these contracts can last several years with a monthly subscription
charge attached. Not only should you
understand the service, but also how it is being delivered or how it is
accessible to you. Support can be email,
chat rooms, or live calls. You need to
understand how effective and accessible the support is as part of the decision
making process.
Training Programs. Training
on the new systems is another critical area to vet. Today there are so many methods and usually
some additional costs involved, especially for live on-site training. With live on-site training, you should
anticipate travel and lodging costs as part of the package. Training in some cases is conducted via
webinar and not live. Make sure to ask
if there is a user’s manual available and if it is hard copy or in an
electronic form. This will allow you to
possibly find an answer to an issue before contacting customer service for
support. In many cases, this alone tells
you something about the company you are vetting. If they have their systems and processes
documented, you should become more comfortable about working with them as a
vendor. There will probably be some
additional costs for their time to train your personnel, so anticipate it. Review if these costs are based on the number
of attendees or are the fees for total time spent.
Sunk Costs versus Subscription
Models. When costs are discussed, we need to know the
total purchase contract which includes subscription model services (standard
monthly fees) versus those items which requires amount paid up front or sunk
costs. In most cases, the sunk costs,
are those dollars going out the door for computer hardware and equipment up
front. The subscription model is usually
related to the computer software use and in many cases hosting. You should confirm how the subscription model
is being assessed. It could be based on
each physical location or the total number of actual users on the software. Identifying this could assist not only in
your budget for the capital expenditure, but also potentially identifying who
will eventually have access to the system.
Ask For and Contact References.
Don’t be afraid to ask for existing customer references. One of the largest areas of opportunities is
that exiting users are not being interviewed to get perspective on how
satisfied they are with the product. It
is your opportunity to interview a true user of the product and you should take
advantage of it. A prospective vendor
should be able to provide you several existing company names and contacts of
existing users that are similar in size and operation. If they don’t or cannot do this for you as a
prospective client, a huge red flag has been raised.
The
vetting of systems is a critical juncture for any company and should be taken
seriously. In most cases, there is a
substantial amount of invested cash at risk.
Due to this, there is a lot of emotion around the decision, before and
after. If the proper research and effort
is not made, the cash that is dedicated to the purchase may not provide you
with the return and efficiency that you expected. At the end of the day, systems that you
purchase should drive the bottom line.
Mark
Kelnhofer is President & CEO of Return On Ingredients LLC, a restaurant and foodservice consulting company which specializes in recipe documentation, recipe costing, menu engineering, and cost controls. He has over 20 years experience in managerial cost controls. He is an international speaker have spoke at more than 110 industry tradeshows, associations, seminars, colleges and universities. He has only published two books: Return On Ingredients and The Culinary Pocket Resource of Yields, Weights, Densities, & Measures. Additionally, he is a lecturer for The Ohio State University instructing food, beverage, and labor cost controls. He can be reached at 614-558-2239 or mark@returnoningredients.com.
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