POS technology has transformed from a hardware-based system to a software-integrated phenomenon
Some call it the icing on the cake; others say it’s the meat and potatoes that can deliver satisfaction. But, when it comes to POS systems, these days it’s the fanciful applications that get all the attention. Integration with iPads, digital menu boards, tabletop ordering systems, video surveillance and wireless POS terminals are front-and-centre innovations bringing the wow factor to today’s technology conversation.
But talk to the experts, and they’ll tell you such examples are just a taste of what can be done with all the data generated by a POS system. In fact, before it’s time to layer on that icing, most operators don’t even know the value of what they already have.
“I’ve been involved with POS systems since the first machines were installed in Canada,” says Bill Dover, chairman of FsStrategy Inc., in Toronto. “It’s like a PC. People are only using about five per cent of what they can do for you.
As POS has become more complex, [with] more and more features, operators are still using them as cash registers.”
Operators seem to miss that the value proposition lies in getting the most out of the data these machines can collect. “POS systems can be extremely valuable for things such as calculating cost of goods versus sales for a given period, or for the tracking and scheduling of labour,” says Dover. “In talking to operators, I always tell them to learn all the attributes of what they have with their current system, and use as many features as possible before looking at something new.”
John McKee, managing partner and executive chef of Sharkey’s Grill & Bar in Toronto, agrees with Dover, although he admits to falling into the old-school category when working with his POS systems. “We try to develop things in stages when it comes to POS. The biggest thing for me is how much we’re able to integrate our Technic POS systems with applications that can help me run my business.”
When McKee talks integration, he means programs such as Optimum Control, a food and beverage system that manages inventory based on recipes and sales, for example. “It’s great. You create a recipe, build it into the inventory program, and when the POS registers a sale, it exports that information to inventory.”
He has also integrated sales data from his POS systems to the company’s financial software to enable a sales-mix analysis. “That kind of integration is important,” McKee says. “We’re also looking at exporting POS data for more in-depth reporting on labour programs as well as integrating sales data with social networking to run staff contests.”
The great thing about focusing on the application integration side of the POS picture is you don’t need the latest and greatest hardware to do it, he adds. “A meat – and- potatoes sort of system will do. Some of these applications will run on Windows 2000 if you ask them. We don’t have the fanciest systems in the world, but what we have makes my job easier.”
There is no question the advent of Windows-based POS systems has been a major driver behind this feast of features and functionality, FsStrategy’s Dover says. “We saw dramatic improvements once POS moved to an open architecture. Look at sales tax, for example. When it first came in, it was a nightmare because operators had to get their POS provider to come in and reprogram their registers. When they reduced it a couple of years ago, operators could easily do it themselves.”
Joe Cortese, a POS R&D specialist, based in Vancouver, believes the opportunities are endless with Windows-based systems. “The PC infrastructure is already there for operators. With that, the POS system can become the heartbeat of a restaurant operation.”
As an executive chef, with a history of working with major chain operations, Scott Davidson, an associate at the Toronto-based consultancy firm Prism Interim Management Solutions, notes that despite the ease of use and flexibility of today’s systems, most operators can do a lot more than they think.
This stems from the fact that until several years ago, POS “stood on its own” apart from labour and food-cost programs, he explains. “Now you can incorporate it into one package. For example, you can get your POS system to speak directly to your inventory system so every time a burger is sold, it’s drawn out automatically.”
A lot of these applications are compatible with the top vendors, including Squirrel, SilverWare and PixelPoint, Davidson adds. “All of them make it easy to bridge [to other applications]. Getting everything consolidated onto one system can be quite the process, but the benefits are huge.”
The bridges were there right from the get-go at Mahony & Sons Public House pub in Vancouver. The owners recently invested $50,000 in new Squirrel POS systems as part of the recent opening of its second Burrard Landing restaurant at the Vancouver Convention Centre. While the two operations aren’t linked to each other, POS data feeds are centralized at head office, explains co-owner Chris Mahony.
Like McKee, he’s focused on getting the data out of his system to make management tasks easier. Current applications include time and attendance, rewards programs for points redemption, and, his favourite, finance and reporting. “I can even get email reporting on my BlackBerry,” he says. “At 6 a.m., all the reports from all our restaurants come to my phone, so I can see sales for the day, by the hour and by products sold.”
This seems manageable for independent operations with a limited number of locations, but it’s a little different for the operator who’s managing a bigger enterprise. For the bigger guys, heading to the cloud might be a preferable option. If you talk to the IT folks at Sodexo North America, it certainly sounds like it.
The company has been breaking new ground in the industry by moving its back-end POS needs to a cloud system by using the Halo software-as-a-service application from Vivonet in Vancouver. By 2014, Sodexo plans to convert 9,000 terminals in 6,000 locations to this model.
Joe Hoffman, the contract caterer’s director of Information System Technology Enterprise, based in Phoenix, explains the cloud system rather simply. “We describe it as having a single database hosted somewhere other than our local operation. It’s a backup to local POS systems but kept off-site.”
Unlike some cloud applications, where everything is moved off site, basic functionality, such as transaction processing, remains on the local drives at each location. At the same time, enterprise applications such as price lookup, application upgrades, et cetera, are centrally managed through the cloud. “In foodservice, you can’t have everything in the cloud, because if the Internet goes down you wouldn’t be able to run your POS system. You’re only as strong as your weakest link on the Internet.”
This move may be unique in foodservice circles, but it makes good business sense for an operation running multiple locations, says Rick Bollar, Sodexo’s vice-president of Digital Strategy from Dallas. “Configuring POS systems in the field requires quite a bit of work. Instead, we can manage systems through one console and use that to customize offers at individual locations, perform upgrades, push pricing to locations and generate financial, food, labour and sales tax reporting.”
The deal was only signed a year ago, but Bollar reports seeing an increase in revenues through improved controls. And, when it’s all done, he estimates managers at Sodexo sites will save at least half an hour of data transfer paperwork a day. “It also opens the doors to opportunities like mobile applications.”
Although still in its infancy, especially in foodservice, Hoffman believes cloud systems will gain traction. “It simplifies a lot of work. Overall, it’s a very attractive proposition for larger organizations.”
There is no denying the wealth of opportunities to leverage POS systems for applications that go beyond the staples. Below is a list from experts highlighting the specialized POS integration innovations poised to generate traction in the not-too-distant future.
- real-time web reporting to view sales information
- web-cam surveillance systems that track events and employee activities at the POS, down to the individual transaction level
- tablet PC and smartphone ordering/payment systems
- at-the-table and kiosk ordering systems
- mobile integration for loyalty/gift-card programs
- social media sites for marketing program development
- online takeout ordering systems integration to in-house POS
- streaming videos for training or kitchen preparation
- digital menu boards
- fingerprint biometrics
- liquor-control systems