Article

Business intelligence solutions shed light on fast casual operations

Potbelly, Panera Bread and zpizza are just a few of the restaurant chains utilizing new solutions offered by business intelligence providers.

March 21, 2011 by Kim Williams — Reporter, NetWorld Alliance

Potbelly Sandwich Shop recently joined the bevy of fast casual restaurants implementing business intelligence (BI) software, a broad term for computer applications and technologies that gather, analyze and sort data to help support better business decision-making.

Potbelly, with more than 200 locations in 12 states, is utilizing the AlteryxGeographic BI technology to manage its sales procedures and business strategy as the company begins to expand into new markets.

“As we grow our presence in existing markets, pick the best sites for expansion and embark on a franchising strategy for the first time, we need to leverage data and technology to make the best decisions. The speed and horsepower of Alteryx is helping us solve problems in minutes that used to take hours or days,” said Barry Walker, senior market planning analyst at Potbelly.

Web-based BI technology is quickly becoming a part of the fast casual formula. Five Guys, Buffalo Wild Wings, Panera Bread, Z Pizza, The Counter, Einstein Bros. Bagels, McAlister’s Deli and many others all use web-based BI platforms.

It also is quickly integrating into corporate America in general. BI software generated $9.4 billion in sales in 2010 and is expected to reach $14.1 billion in sales by 2014.

For restaurant operators, BI software can help track consumer spending patterns, as well as manage staffing and inventory levels to assist in running more effectively and profitably. WhenToManage, CTUIT and Alteryx are just a few of the companies offering BI web-based back office solutions.

“The biggest benefit of restaurants using BI is the analytics. Restaurant operators have a lot of information coming at them between managers, servers, guests, etc.,” said Walker Thompson, vice president of sales and marketing for WhenToManage. “The software really pinpoints three things, which answers questions about what’s selling, how much it costs to sell it and how to leverage what is already on-hand.”

Information about inventory, sales and labor can be organized into charts, graphs and data tables to enable tracking and monitoring. The software products include dashboard features, such as messaging, event calendars, weather information, file storage and employee contact information.

Thompson acknowledges that inventory control is one of the biggest problems for restaurants to manage and is typically the largest expense. One of the aims of BI software is to get those costs under control by identifying waste and theft.

The inventory management application that Buffalo Wild Wings uses encompasses marketing, operational and financial aspects. By using the data, they have the ability to track variants and adjust accordingly, Thompson said.

“I think one of the biggest benefits of the system is the problem solving functions that save time and money because the knowledge is finding you versus you searching for it. It’s there when you want it,” Thompson said.

So, when a manager does the purchase ordering, he or she can get a good picture of what should have been used versus what was actually used, giving restaurant managers the opportunity to be proactive.

“One operator told us that the mistakes they’d caught and fixed have added up to thousands of dollars. Managers are able to pinpoint why problems are arising and how to resolve them. They were able to use the data to dig deeper and do something with it,” said Thompson.

Operational control

Chris Bright, co-founder and president of Z Pizza, said the company implemented CTUIT Radar, its BI platform, about five years ago.

“At the macro level, we’re able to look at various revenue centers and how stores are generating business. Then we can go to the individual stores. We found that some stores generate more delivery business versus lunch and dine-in business,” Bright said. “It made us realize we had to stop painting Z as ‘one size fits all’.”

Bright said at the micro level, the software allows them to see the overall cost associated with each position, leveraging purchases, labor, sales and promotions. “It’s absolutely critical information,” said Bright.

In a survey conducted last year, WhenToManage found that its clients were saving between $100 and $800 a month in labor costs alone after implementing the software.

The ability to customize the data seems to be an especially attractive feature to operators. “It does a phenomenal job of gathering data. I can find out how many items on average a customer is purchasing during a lunch transaction,” Bright said.

Management also can distribute tasks, which then allows them to focus on the bigger picture such as expansion, marketing and strategy.

An employee scheduling and workforce management communication tool, usually a dashboard feature, enables managers to post schedules and correspond with employees via the Internet. Employees can insert their availability and time off requests without having to approach managers. Schedules are generated using the data provided.

It also gives managers the ability to view projected labor costs and adjust where necessary based on projected sales and guest counts. Additionally, daily sales reports can be automatically compiled and e-mailed to owners.

“The idea and concept of business intelligence is its powerful data output and operational functionality that focuses and sorts the two main things that help restaurants the most: labor and inventory,” Thompson said. “The software can save operators hours and hours of time every week.”