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QSR brands suffer mightily from old, unintegrated tech

As the business world catapults ahead — courtesy of all kinds of new technology — the restaurant industry is still suffering significantly from old systems that fail to integrate with new digital tools that could help pave the way for a more successful future for many QSR brands.

November 14, 2018 by Robert Whitehead — Director Retail & Hospitality Technology, Softtek Integrations

Uber and Lyft have redefined the way we get from one place to another. Amazon Go lets us shop and pay for stuff without encountering a cashier. We book airline tickets and hotel rooms with a search and a click, bypassing travel agents and phone calls.

Leading-edge sensor technology, conversational AI and facial recognition tools, and cloud-based delivery models are all allowing businesses to fundamentally reimagine customer engagement and operational management. Likewise, these capabilities enable ongoing data collection and analyses, resulting in meaningful customer and operational insights. 

"The restaurant industry has seriously fallen behind when it comes to the effective application of transformational digital tools."

Innovative companies that act on these insights can't help but drive constant refinement and improvement in products. The result is that these businesses ultimately leap ahead of their less technically active competitors. 

So what's the problem with restaurants?

Overall, the restaurant industry has seriously fallen behind when it comes to the effective application of transformational digital tools. One major obstacle is the result of the constraints of legacy technology.

Most restaurant chains rely on archaic platforms, databases and applications originally developed decades ago. The critical data residing in these antiquated back-office systems is tough to access, so QSR managers are often left in a lurch when it comes to key customer and operational insights. 

Point of Sale (POS) systems further complicate matters. For one thing, most POS solutions suffer from the "single use" problem. In other words, instead of integrating with the overall technological landscape, these systems are typically designed for the sole purpose of processing restaurant transactions.

"Another fundamental barrier to innovation is the franchise model itself."

Moreover, this limitation is exacerbated by the fact that the POS market is controlled by a few vendors, resulting in limited interoperability for many products in use. In the end, transactional data are isolated from historical data, which prevents the kind of dynamic, real-time analyses needed for critical business insight.

Franchising's limits

Another fundamental barrier to innovation is the franchise model itself. Comprehensive modernization of restaurant technology platforms would require significant investment from individual franchisees who often lack those kinds of resources. Likewise, franchisors also need to possess a measure of centralized oversight, but then lack the control needed to really drive transformation. 

Given the double-whammy of entrenched legacy systems and the dynamics of franchise economics, a rip-and-replace strategy of modernization is a non-starter. The objective then becomes to break down the barriers between technology towers, integrate platforms and enable dynamic data access and communication with minimal disruption. 

A solution at hand

A pragmatic strategy of restaurant technology modernization — characterized by cloud-based, mobile solutions — can achieve the aforementioned objective. By deploying middleware applications at the interfaces of restaurant POS and back-office systems, restaurants can essentially bypass what would be the Herculean task of updating spaghetti-code applications and migrating servers. 

Instead, "above the store" technology penetrates POS systems and connects them to the rest of the enterprise. The resulting framework can also easily integrate with third-party payment applications to further enhance interoperability. 
By making those connections, this approach breaks the logjam that now prevents many brands from accessing and analyzing the heaps of customer and operational data needed for truly competitive insight. 

In the realm of customer engagement, real-time data integration can permit the server to offer customers special discount or rewards based on past visits. That's the kind of technological difference that can truly create personalized customer experiences that build brand loyalty. 

Operationally, better data analysis gives brand leadership more accurate insight into supply and demand needs, ultimately improving management of perishables. Likewise, better insight into cause-and-effect links allows managers to more accurately assess the effectiveness of marketing initiatives.

So, the restaurant industry faces formidable obstacles when it comes to technology, but creative approaches that propel positive change within existing enterprise environments and legacy systems can deliver more competitive operations and a better user experience. 

Photo: iStock

About Robert Whitehead

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Robert Whitehead is a Restaurant and Store systems expert with Softtek, a global IT services provider, specializing in Systems architecture, Software design, Implementation and Product delivery. 

His areas of expertise include communications, healthcare and hospitality.

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