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Rob Jones
Written by Rob Jones
October 17, 2017

Cloud-Based Back of House Reporting for Restaurants: How Data Solves Problems

It's a data-rich world in the restaurant industry these days. The profusion of available data is exponential in scope even when compared to what it was even a few years ago. This is thanks to IoT, social media, and an increasingly savvy consumer base who interact with the world primarily through their phones.

But, so what?

Data collection is just a means to an end. If a restaurant can't easily use the data to solve real problems like increasing cost savings and profitability, reducing operational hick-ups, and a creating better guest experience, it's all just disconnected information that brands don't even need to collect. 

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So, how can operators make sense of that data, and use what it's telling them to solve real problems, and create better solutions? 
 

Let’s take a look at some of the broader operational categories that represent critical activities in the restaurant industry. 

Specifically, let's look at how cloud-based back office reporting that connects with POS and other front-of-house tools help industry leaders more easily see the patterns in incoming data and how it gives them the confidence to plan a practical strategy around those patterns.

Food costs

The optimization and reduction of food costs is one of the biggest dragons to slay across the industry. Managing this area of the business is central to how profitable it will continue to be, which makes it all the more amazing that so many multi-location restaurants have historically relied on multiple, disconnected, and static spreadsheets to manage it. 

Food costs are determined by a number of factors, some of which make it very difficult to make apples to apples comparisons between locations, each with their own siloed data. Further, factors affecting incoming data tend to be in constant motion and can change over time. Seasonality, market fluctuations, even weather that affects local agriculture can change the forecasting landscape. Being able to track it accurately requires dynamic tools.

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Cloud-based back of house food cost tools help to put all of the moving pieces in the data together to form a more coherent picture. These applications are designed to establish fixed actual and theoretical food costs, and the standard variance to which each location must adhere. From there, the data reporting can be accessed in single environment for operators and corporate management to make more meaningful comparisons between locations in real time, while also making areas of improvement easier to see. 

What this means is faster and more informed actions to take that have measurable positive impact on the business. This ranges from menu planning, to ingredient buying, to promotional strategies, to choosing new vendors. All of these efforts help organizations optimize resources to keep costs lower and to add to the bottom line. 

Inventory management

Frequent inventory-taking is a necessity in restaurant operations, and like managing the control and reduction of food costs, it involves a lot of moving and often disassociated parts. Managing vendor orders that are all on different cycles is only one important layer of complexity to the inventory big picture. 

Another has to do with system compatibility with many legacy systems requiring double-entry due to common disconnects between incoming POS data and order processing systems. Given that the industry thrives on up-to-date stock data and yet has historically not had the tools to manage it in real time, keeping on top of this vital information as it relates to demand and to sales in particular has been a challenge. 

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In the cloud, users can manage inventory centrally and more easily, gaining current and accurate numbers during weekly inventory-taking. More importantly, inventory details across multiple locations are no longer a series of data islands strung together using spreadsheets or multiple systems that aren’t connected.

By using tablet-based inventory-taking tools at each location that pull from POS data and compatible with vendor ordering systems, the act of taking inventory can be cut in half. From there, the data is more easily updated, more current, and more accurate when it comes time to replenishing inventory in an efficient and timely manner. In the cloud, it's also more accessible and visible to operations management at any given time.

Labor costs and scheduling

The go-to line in many organizations is "our people are our greatest resource". That is true. But so is the fact that in many restaurant industry contexts, there’s been a gap in knowing how labor resources have helped or hindered company growth in any detail. Rising labor costs is a hot button issue in many sectors of the hospitality industry right now. It’s vital for management to gain clarity on how best to use a workforce to produce the best possible guest experience and gain the best possible ROI, too.

The variables of achieving this should rest on incoming data about location traffic, time of day, and individual performance of employees. In short, it’s about placing the right people where they need to be at the right time. That's can be a delicate balancing act. When the data is siloed, it's hard to make a determination on how to strike that balance with any confidence. That's what cloud-based back of house reporting on labor and scheduling helps operators to do.

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For example, labor and scheduling tools help operators know who the best wait staff really are, based on measurable factors like how many combos they've upsold, or the size of their average check compared to their workmates. When planning a schedule, this information makes it much simpler to match employee performance data with other sets like days of the week with higher than average traffic, times of day, times when there's a promotion in place, or on specific launch dates when new menu items are introduced. 

The balance to placing the right person in a location at the right time is much easier to achieve when decisions are rooted in measurable factors like this that are reportable in real time. It also eliminates the danger of being short-staffed, over-staffed, or staffed with too many inexperienced employees on a busy night. And it generally helps to stabilize the weekly schedule, too. That helps employees plan their lives more easily, and to be generally happier in their positions. This has an important effect on how well they serve guests, and on the slowing down staff turnover, too.

Understanding data to make better decisions

Here's the common denominator found in all of the above:

Getting a better handle on business data using cloud-based back office tools across multiple locations means adding a layer of profitability that is separate from the goal of making more sales. That is a powerful possibility.

In a sector that famously operates on razor-thin margins, understanding what that data is telling business leaders is often the deciding factor for success, or decline. Having the right levers to manage that in this age of data-richness lends greater control to make sure that operations are heading in the right direction.

What's your current relationship with your business data? In what way could you get a better handle on using it to create more efficient operational processes and more profitable results?

We'd love to discuss some of these areas with you and learn more about the direction you'd like to go in using your incoming data as the fuel to get you there. 

So ...

LET'S TALK

 

 

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