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Cloud POS: 4 key advantages for QSRs

July 13, 2018 by Christopher Sebes — president, Heartland Commerce

With Cloud POS reclaiming the top spot in this year's POS Software Trends Report from Hospitality Technology, it's clear that cloud-based point of sale initiatitives are scoring high on restaurateurs' technology wishlists. In fact, the report found that fully 61 percent of merchants want this element to be central to their next POS system.

But, it's important  to note that the architecture, as well as the cost and acquisition models of cloud are fundamentally different than client-server POS. And while it is possible that —as with most technology trends — many QSR operators may simply be chasing the trends with their cloud POS longings, I believe it's a lot deeper than that. The truth is that cloud POS can offer real, tangible advantages in four interrelated categories of cost, simplicity, flexibility and function.

Cost: Cloud can offer a better acquisition and cost model

This cost savings is significant in some cases. I know of client-server systems for an average size table service restaurant that ranged between $20,000 and $50,000 in capital expenditures alone. This doesn't include the ongoing per-terminal fee or support and maintenance contract fees and other elements. With cloud, the old way of buying expensive hardware upfront is gone. Cloud offers a predictable, affordable monthly op-ex. 

The "as-a-service" model means everything is typically included for the monthly fee. Some providers have done away with terminal fees and add-ons for connecting third-party services or solutions. You pay one monthly price that is based on your revenues. 

If you rent (rather than purchase) your hardware as part of your rental "as-a-service" agreement, often the provider will replace your hardware regularly. If a customer spills something on one of your peripherals, your provider likely has a spare in stock to ship out to you overnight, and this is all handled simply by contacting support. By contrast, when you own and support your own equipment, you might be waiting weeks for a replacement to ship from the manufacturer or supplier half-a-world away.

"Look for cloud POS that works even when your internet doesn't. Some providers put the point of sale ordering and payment functions into an app that runs on local devices. These devices then share information among themselves using a mesh network, regardless of whether the internet is accessible."

Depending on the vendor you select, you may be able to use a wider range of devices than you could with Windows terminal-based POS systems. Cloud POS vendors are making their POS systems compatible with devices that are familiar to many of us in our personal lives like tablets and smartphones. Some cloud POS solutions also operate on kiosks. Some even run on a range of devices and operating systems including the traditional Windows-based terminal for QSR operators who want to use these terminals, as well as tablets or kiosks.

Simplicity of a streamlined operation

Cloud POS solutions remove the complexity of in-store servers, computer networks, and complicated, time-consuming setup and hands-on maintenance. In some cases, it's as simple as downloading the app to your device. It talks to the "brains" of your system up in the cloud, and you can start taking orders. App updates are also pushed to devices from the cloud.

Flexibility to fit a QSR's needs

Some Cloud POS can be adopted in stages, as your budget and other resources allow, which many operators find critical to their cash-flow needs. Likewise, cloud POS hasn't been out very long. As a result, it will take time for this type of system to be fully on par feature-wise with client-server POS systems that have had decades to develop their deep functionality.

An existing solution that offers a seamless upgrade path to cloud POS may be an option worth considering. Look for providers with a rich set of legacy solutions that can offer a simple, cost-effective upgrade path to a modern cloud POS solution. You may want to upgrade in stages, connecting existing POS devices to the provider's cloud "brains," for example. 

Or perhaps you want to get a few more useful years out of that hardware you just invested in. Fortunately, with some vendors, the transition to cloud POS does not necessarily have to be a "rip-and-replace" proposition. Look for a cloud POS company that will work with you to transition, according to your operational and budgetary requirements.

Function: The cloud POS QSR advantages in a digital world

The advantage starts with the setup. Traditional client-server solutions sometimes take weeks to roll out across multiple locations. Modern cloud POS solutions typically can be downloaded to the device from the cloud in a matter of minutes.

Today's cloud POS solutions tend to run on familiar devices and are designed to be as easy to use as an app on your smartphone. Download the app to your smartphone or tablet, and start taking orders. These solutions reduce training time for line workers and managers alike because they are designed for simplicity.

As you look at cloud POS solutions, consider which in-store functions are dependent on an internet connection to function fully because these will be impacted if the internet goes down. For example, if orders must be sent up to the cloud on their way to the kitchen, an internet outage will interrupt this flow because the order won't be sent to kitchen displays. As a result, your team will find themselves printing paper order tickets for the kitchen. 

So, look for cloud POS that works even when your internet doesn't. Some providers put the point of sale ordering and payment functions into an app that runs on local devices. These devices then share information among themselves using a mesh network, regardless of whether the internet is accessible. Once connectivity is restored, they will once again talk with the cloud and sync everything for you without additional hassle.

Though cloud POS is relatively new, its advantages clarify why so many more brands are choosing this option. But for those operators who are still asking if cloud POS can really be counted on for the kind of reliability and overall system maturity needed to run their businesses, stay tuned, my next blog will "fill in those blanks," on that subject.  

Photo: iStock

About Christopher Sebes

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Christopher Sebes has spent his entire career in hospitality management and technology. He received a degree in Hotel and Restaurant Management in England and managed hotels and restaurants on three continents including multi-unit restaurant operations in Europe and the US. He created the first Microsoft Windows point-of-sale company, Twenty20 Visual Systems, which he sold to Radiant Systems. He went on to become the CEO of Progressive Software before founding XPIENT in 2004. XPIENT was sold to Heartland Payments Systems in 2015, and he was tapped to become the President of Heartland Commerce, a major player in restaurant and retail management technology. Today Christopher is the President of Xenial Inc., formerly known as Heartland Commerce.

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