Orderly is here to help restaurant owners run a smarter business. And we can’t do that if we’re just giving you our perspective. This week our CEO takes a look at technology in restaurants.
Is it useful? How can it be used? Why does it usually suck?
I generally hold the opinion that technology in restaurants sucks, which is a pretty weird thing to admit for the CEO of a restaurant management company. Since I joined Orderly two years ago, this has puzzled me and sort of pissed me off. It’s a huge market, and it’s full of people that REALLY need help becoming more profitable and buying back more hours in their life.
The idea of applying tech to restaurants isn’t new or particularly rocket-science. In fact, there are hundreds if not thousands of companies doing it. Who are the “leaders”? The answer is that there aren’t any real dominant winners, just tons and tons of companies hacking away at the market, peddling their own rendition of software to help restaurants run better.
That’s not normal. Markets usually evolve to have a clear, smallish set of winners…and then everyone else. In other words, a few people “figure it out” and establish leadership. That this has not happened in restaurant tech signals to me that no one has really figured it out yet.
I’ve been building software solutions for customers (consumers all the way up to big enterprise customers) for the better part of 40 years. Solutions I have worked on have been used by millions of people and have sold well over $1 Billion. Now, you might have more insight to why the title of this blog that I’ve writing sort of pissed me off. It’s really frustrating.
Why Technology in Restaurants Sucks:
So, here’s what I’ve learned.
- Restaurants are uniquely chaotic. Most of them can’t really predict their customers’ demand well. How many will show up? What will they order? Every day has very tight margins of delivery. They work with a notoriously erratic workforce. And they deal with suppliers that have the ability to change their prices charged at any time.Or they deal with raw ingredients that are often “use it or lose it” within a few days. Name other types of companies that deal with such dynamic forces acting on critical success factors to their survival and profitability!
- The food service supply chain has a ton of power. I’m not accusing any company of bad business practices here. I’m just pointing out that the dynamics of the food business have conspired to concentrate a lot of power and control in the food suppliers. Farmers produce a crop that has a limited time to reach its market. They have to sell it…now. On the other end of the market are the restaurants that have menus printed featuring a Southwest Chicken Salad, and they are going to have hard-won customers sit down and order one. The restaurant better have all of the ingredients on hand…now. In the middle, the food service suppliers can much more predictably spread their risk across the supply and demand of the chain, and make micro adjustments at will in pricing to be sure they maximize their return on their supplies.
Too Much Data. Not Enough Time
- The sheer volume and complexity of the data is unmanageable. It sounds easy when you think about the 15 ingredients of that Chicken Salad, break down the recipe by ingredient, and look up the prices for each ingredient today. Viola, you understand your cost for that dish. Except, that damn pesky reality creeps in, and you added a new supplier for your chicken that sells in a different case size than your other supplier, and the chef tweaked the recipe to add avocado and some extra cheese, and there has been a recent price spike in avocado due to heavy rains in California. What seemed so straightforward in theory either requires your hyper-vigilance literally every day to maintain OR your system is feeding you erroneous business data.
- Everyone hates taking inventory and is terrible at it anyway. If there is one thing I get almost universal agreement about, it is that everyone hates taking inventory and laughs when I talk about their actual confidence in their counts.
The Approach is Too Logical
The problem is that almost ALL technology in restaurants has been created by people that approach it logically.
Do you know the ingredients today? Yes.
Do you know the prices today? Yes.
Can you know how many you sell today? Yes.
Can you count inventory today? Yes. (well, maybe)
“Ah Ha, then my formula DOES work!” But that is totally different than saying your formula WILL work when reality enters the picture. Software is built by seriously smart people that are great at writing formulas that work in testing. They sometimes even listen to their customers and build what they ask for. Features like:
“Count the cream cheese by 6 pound pack, and then by individual pounds”
“Order my items to count by their position on the shelf”
“Allocate some of these lemons as bar costs and not food costs”
“Have an approval process as we receive product, etc”
The problem is that these features come up from well-meaning customers that have spent years in the echo-chamber of the crappy restaurant tech market, where the software engineers have laid down the ground rules for the game. And of course, you have to count all of your ingredients every period. You have to tell us if this supplier’s chicken is the same as this other supplier’s chicken. AND you have to organize your ingredients for counting. And so on and so forth.
The epiphany we had about 6 months ago was that RESTAURANT REALITIES MATTER. Damn the existing rules from other restaurant technology solutions. Damn the requests coming from these well-meaning customers who are doing their best to adapt the crappy solutions to their reality.
The result is Orderly’s “Data-Driven Food Cost Management Done For You” approach. At the core of it is intensive data analytics where we manage our customers’ ingredients, we apply machine learning technology to help them be more profitable with their food spend, and where we actually make our customers happy. Yes, happy. There is no requirement to take a full inventory in our solution. Customers get better business information to help them save money in purchasing, look for waste and theft, and add practical processes to improve their restaurant operations.
We think the fact that we are routinely getting high satisfaction grades from our customers might mean that we have started to “figure it out” so that technology in restaurants doesn’t have to suck anymore.