POS Terminal

From point-of-sales systems and table-management software to wireless headsets and silent pagers, technology has become fundamental to the restaurant and hospitality industry.

Walk in the door at Kinkead’s, an award-winning restaurant on Pennsylvania Avenue in northwest Washington DC, and you will quickly understand the importance of technology to the food service bottom line. The restaurant, spread out over three floors, is a technology-enhanced operation.

"When guests first walk in the restaurant, they are greeted by the host, who calls upstairs on one of the 18 extensions we have in place," says Mimi Schneider, general manager of the operation. Guests are then greeted by a manager on the second floor, who seats them at their table.

When the waiter opens the table on the computer system, it has already been flagged on the point-of-sale (POS) terminal as a group of first timers or regulars. That information is displayed on the kitchen’s POS terminal, as well. If it’s a birthday or an anniversary, personalized menus will be waiting for the diners.

"All the ordering and commands are issued by the waitstaff, through the computer," says Schneider. "The system automatically routes orders to the raw-bar printer, the bar printer and the kitchen printer. The only place the entire order is printed is at the expediter or chef’s printer in the open kitchen. He is the one who is responsible for coordinating the timing of the entire meal."

Like many restaurants today, Kinkead’s open kitchen sits visibly in the center of the dining room. To ensure communication in the kitchen, the entire line is connected by wireless headsets. The expediter is the only member of the kitchen staff who sees the order. Everyone else saute one, saute two, broiler, cold station and grill needs to listen.

"The wireless headsets are crucial. Without them, service wouldn’t happen. It’s that simple. In fact, this restaurant couldn’t do half the volume we do without the systems we have in place," says Schneider. "Our aim is to keep a personal involvement with each and every customer, so we try to keep technology as far away from the guest as possible. At the same time, we use a lot of technology. We could not function without the systems. We’re too large, too high volume. Without the computers and the communications systems, we wouldn’t be able to process the people."

Undeniable efficiencies

For years, many restaurateurs attempted to ignore the onslaught of technology and its impact on the restaurant industry. Many thought the cold, impersonal nature of technology was at odds with the purpose of the industry itself — hospitality. Others were simply too busy with the day-to-day operations of their restaurants to invest the time to research new technology or to lay out the capital to purchase the catering equipment.

As recently as 1990, well into the "information age," only 60 percent of table service operators used computers, according to National Restaurant Association research. By 1996, the most recent year for which numbers are available, 80 percent of table service operations were using computers.

"The move to sophisticated POS systems has been logical and beneficial to restaurant operators," says Peter J. Rogers Jr., vice president of business development and investor relations for Beltsville, Maryland–based MICROS Systems, Inc., a leading supplier of POS technology. "Fast-food restaurants automated very early. Table service operations started moving to more sophisticated systems in the mid-’80s. And today, technology has become fundamental to the restaurant and hospitality industry. No matter what your size — whether you’re a small independent or a large chain — you really can’t compete without investing in some sort of technology."

The importance of technology to the restaurant industry cannot be understated. In an industry that has boasted steady but unspectacular growth of 1 to 3 percent annually since 1991, technology offers one of the few opportunities for cutting costs, improving efficiency and affecting the bottom line.

"Technology has become very important for a number of reasons," says Alan Hayman, vice president of sales and marketing for Hayman Systems, headquartered in Laurel, Maryland, one of the leading POS solutions providers in the mid-Atlantic region.

"The biggest controllable in the restaurant industry are labor and food cost, and the right computer system can help operators lower costs in both those areas," says Hayman. "Just as important, computer systems automate a lot of the paperwork that managers have been expected to do. By reducing that paperwork, you allow your managers to focus on the most important aspect of their job — managing people."

"I can’t count the number of ways technology has revolutionized my business," says Mike Pappas, owner of the Pappas Sweet Shop Restaurant in Raton, New Mexico, and the author of Eat Food, Not Profits! How Computers Can Save Your Restaurant.

"We started using a POS system about 15 years ago, and it had an immediate impact," says Pappas. "Before, we had a waitstaff of five, and two to three cocktail waitresses. With the computer system, we were able to eliminate one waitperson, and we eliminated the cocktail people completely. That’s a 30 percent savings in waitstaff payroll."

Reduction in labor costs wasn’t the only improvement that Pappas enjoyed. There were other quantifiable improvements. "First off, service speed picked up 20 to 30 percent," he says. "With POS systems, the orders are easier to read, they’re transmitted faster, and the waitstaff doesn’t need to leave the floor. You eliminate mistakes and miscommunication. In short, it improves both speed and service, two crucial commodities in the restaurant industry."

The fully automated operation

Today, computers and technology can track a guest from the reservation through the entire meal, and back home again. Consider the following scenario, which is possible with technologies that already exist.

A guest calls the restaurant for a reservation, and even before the host answers the phone, Caller ID has identified that the guest is Mr. Smith, and the database tells the host the last time Mr. Smith dined at the restaurant, what he ate, where he likes to sit, even his favorite server or his wife’s birthday.

When Mr. Smith and his party arrive, their favorite table is reserved. The host seats the party and enters the new table into the computer. The cable-management system a piece of software integrated into the POS system notifies the server on an alphanumeric wristwatch pager that she has a new party, the Smith party.

The waitress greets the party by name and begins to enter their orders on a hand-held POS keypad. As the server enters the orders, the system returns real-time information about Mr. Smith’s favorite dishes, the best wines to accompany the dishes being ordered, even nutritional information about the dishes. All of this information allows for suggestive selling and a wide range of information that enhances the guest experience.

After the order has been transmitted to the kitchen printer, a timing system monitors the progress of the meal. If the appetizers are not served to the Smith table within seven minutes (or any other predetermined length of time), the system alerts the floor manager.

During the meal, the Smith party realizes they need ketchup, or they want another glass of water. By using a pager placed in the middle of the table, they can summon their server. If the waitress doesn’t respond promptly, the table-management software alerts the host or the floor manager that table 38 needs to be serviced.

After dinner, Mr. Smith asks for his check. As the server prints out the check, the system recognizes that this is the 10th visit to the restaurant for the Smiths. The computer recommends discounting the current meal or printing a coupon for the next visit. Credit-card authorization is handled by the POS system as well. And a few days later, the system prints out a thank-you note, addressed to the Smith household.

While these systems enhance the guest experience and the floor staff’s ability to work more efficiently, the restaurant is also warehousing and analyzing tremendously valuable information. At any time during the course of a shift, floor managers can log into any POS terminal and get a real-time graphical display of the activity on the floor for that shift. They can retrieve information about each waiter’s average check, dessert checks, even how fast tables are turning. Instead of analyzing the information after the shift is over, managers have the ability to affect events while they are happening.

The price of power

The range of technological solutions for the restaurant industry is broad and ever growing. Today, computers and technology can schedule production, expedite product, process transactions, track information, automate online ordering and cut down on the mountains of paperwork that have been known to bury restaurateurs. But not every solution is right for every type of operation.

"My restaurant is only 84 seats, and I can stand behind the line and see all the tables in the restaurant," says Marc Cohen, chef/owner of 230 Forest Avenue in Laguna Beach, California. "I can see how quickly we’re turning an eight, or if someone has been sitting too long without service, so I don’t need table-management software. It’s a great tool if you have three floors and 200 seats and you can’t see everything. But for me, those fancy systems are too expensive, and they just don’t make sense for my operation."

Alan Hayman agrees that it is important to match the system to the situation. "The full range of technological solutions isn’t going to be right for every operation," says Hayman. "Giving pagers to guests in an enclosed mall setting makes sense. But pagers are only good for a certain distance, and if your guests are going to wander the city for an hour, it simply doesn’t make sense to employ the technology."

Cost is, of course, a factor in implementing solutions. And while prices vary, there are some general guidelines. "It’s not unusual to spend 3 to 6 percent of your expected gross on technology," says Hayman.

"If it costs you $750,000 to open a restaurant, computer technology could run anywhere from $25,000 to $50,000, depending on the depth of software," says Mike Pappas. "And while it may be hard to quantify the return on investment, you can’t compete without these systems. Restaurant operators use tools. Computer hardware and software are now tools of necessity, just as much as a grill, a broiler, bain marie, or tables and chairs. It’s not cheap, but you can’t afford to invest. It’s part of the business."

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