Mapping Your Technology Journey

Don’t just invest in the latest and greatest technologies; know what you should be getting out of them to select the most appropriate ones for your operation.
Man typing at a computer in a restaurant setting

Today, operators have access to more technology than ever before; tools and solutions that help them better and more affordably manage their day-to-day business. But before spending on a solution, it’s important to not only consider what the technology could do for you, but also what you need to know, as both will paint a clear picture of your technology needs. 

Noting them as needs is not a misnomer. Due to the shifting competitive landscape, mounting labor costs and rising food costs, these technologies are becoming necessities. The right solutions, implemented at the right time, can help you navigate and overcome these challenging conditions to maximize performance and profitability.

It’s about the journey

All too often, operators embrace new technology without properly vetting it against their goals and needs. Frequently, this results in time and money that perhaps could have been better spent. 

No matter where you’re starting from, treating technology more like a journey, versus looking at it as a destination, will help you move toward profitability and strengthen execution. Each step along the way builds on the previous one, laying a solid foundation and increasing your chances of meeting your goals. 

Step 1: Oversee par levels

The first and most basic step to managing your operational costs using technology is to establish and oversee par levels—knowing what and how much of any given item you have on hand. Most distributors have par level tracking woven into their ordering system, making it simple to do. Set par level goals on a quarterly or seasonal basis and tweak them as you make menu changes. This will help you see where you may be able to reduce inventory to improve your bottom line.

Step 2: Manage recipe and inventory costs

The next step is to dig into your recipe and inventory costs, with recipe and inventory management software. These platforms can produce reports on plate costs, inventory costs and/or cost-of-goods sold, allowing you to see growth and profit possibilities by improving labor, accuracy and more. And with the National Restaurant Association saying most full-service operators make a single-digit profit, gains through labor and accuracy improvements can pay off.

As with all technology, the more accurate the data you input, the more accurate, and useful, your reports will be. But the amount of time to initially input and maintain the information should also be considered. A good goal is to start with the recipes and inventory items that generate 70 percent or more of your annual sales, being sure to update it as you make menu changes. This will give you directionally sound cost reports.

If you were manually tracking this information before, using the software will be a time saver and minimize errors. Plus, most versions come with a mobile app, making on-the-go management even easier. 

Step 3: Analyze the data

The first two steps/technologies establish where you’re at, performance-wise. This step and the next are about evaluating your performance to figure out where you should go, specifically where changes can and should be made.

To determine that, you need to look at the reports for your par levels, recipe costs and inventory costs. Scrub this information against your operational and menu goals to see where gaps exist. For example, you may have set a goal to reduce food costs. Your reports tell you that your food costs are currently 36%. You’d like to get them at or below 33%. With a 3% reduction as your goal, you can now make an action plan.

At this step, it’s also important to figure out who on your team is going to handle the action plan that results from your data analysis. As you’re deciding, make sure they have the skills and the time (or that you can provide the training and the room in their schedule) to meet the goal.

Step 4: Implement a data exchange

A data exchange links two or more technologies to provide in-depth reports. For an operator, there’s value in connecting your POS system with recipe and inventory management software. From there, you can get reports on ingredient-level food costs and variances between what you buy and what you sell. 

Like with recipe and inventory management software, you should consider how many items you want to front load and maintain, and how much time doing so will take. Yes it will require some manual hours to map the items to each other across all the platforms and update them as changes are made, but the time spent will pay off with the comprehensive, real-time information you get in return. Just make sure you have team members with the skills/training to support it.

Over time, technology is only going to get better and better. But successful operators are strategically implementing it today. To do the same, outline your goals (focusing on what you need vs. what you want) and follow these four steps. You’ll be well on the path to profitability.

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