Image back
Blog

Big Data for Restaurants: 5 Challenges Operators Face Today

It’s not every day your Facebook post goes viral. But for Dan Ariely, a professor at Duke University, a simple comment about Big Data caught the attention a lot of people. “Big data is like teenage sex,” he wrote. “Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is […]

It’s not every day your Facebook post goes viral. But for Dan Ariely, a professor at Duke University, a simple comment about Big Data caught the attention a lot of people.

“Big data is like teenage sex,” he wrote. “Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.”

In addition to making everyone chuckle, his message was spot on. We’re all surrounded by big data, but few, if any of us has truly cracked the code on how to easily access it in real-time and put it to use in ways that deliver benefits to your business.

n

“Big data is like teenage sex. Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.”

n

– Dan Ariely, Duke University Professor

When you get right down to it, the restaurant industry has been late to uncover and adopt platforms that analyze these vast streams of data because, up until recently, it required a large upfront investment in technology that most operators couldn’t afford.

Because most of the data lives in siloed systems, it’s also been difficult to integrate multiple databases. The good news is that with new cloud platforms, operators can leverage the power of big data with little money and fewer IT resources. The result is that organizations with large masses of data can use it to better understand what drives their business forward in minutes and seconds instead of days, weeks or even months.

From limited service, fast casual and fine dining, restaurant operators deal with a number of challenges that make it difficult to think and act strategically.

Operator Challenge #1:

You’re Slammed

Operators spin their wheels dealing with everything from scheduling shifts, interacting with guests, managing vendors, creating and executing marketing campaigns, fixing broken equipment, and the list goes on. Time spent managing these issues leaves little time for operators to take a step back and figure out how to improve operations, address immediate problems or for that matter, identify the source of common issues.

The reality is, most operators fix problems only when they become so big that they impact everyday activities, like sales. Not only is that a short-sighted approach, it’s a recurring expense that bleeds money until the problem gets fixed.

Operator Challenge #2:

You’re Not Sure Where to Focus

A restaurant is like a complicated machine. There are lots of bells, whistles and levers that have to be pulled in unison to make it run. Over time, the machine gets more complicated, consumers want more bells and whistles, and the cost of materials and labor goes up.

The restaurant industry is facing the same challenges, which makes it difficult for operators to understand which lever to pull at what time to maximize the machine’s power. Should you put more money into marketing? Do you need to optimize inventory management? Or something else?

Operators tend to rely on their experience or gut instinct to decide what’s most important, identify strategies that will have the biggest business impact on profit or solve problems that need the most attention in the heat of the moment. While this strategy is effective in the short term, it’s not a sustainable strategy to achieve long-term growth.

Operator Challenge #3:

Your Data is Fragmented

Data isn’t a foreign concept for most operators. Single unit restaurants all the way up to billion dollar franchises use data on a daily basis. Every second of everyday, operators are collecting data-and lots of it-but it’s siloed in multiple software systems without a simple or affordable way to integrate the information, much less make it accessible to hundreds or thousands of stores.

Left without much choice, decisions are made using incomplete data or with multiple spreadsheets and overly complex algorithms. While this might be a fun job for the spreadsheet enthusiast, these manual methods are time consuming and prone to errors.

Operator Challenge #4:

Data is Delayed

Restaurants are used to waiting around for data to be delivered in an easy-to-digest format. Payroll is a perfect example of how data can get bogged down between the store and finance department. But it’s not just a restaurant problem. In fact, the IT community actually coined a term for it: latency of data.

Operators feel the pain from a latency of data on a bigger scale because time passes much faster in a restaurant. A lot can happen in an hour at the cash register or in the kitchen.

Receiving data even a week late is seven days worth of money and time. While the data may still be useful to make longer-term decisions, the delay prevents operators from making intelligent decisions that impact the day-to-day store activities-which is where a $0.50 savings can be turned into $5,000 in profit over the course of a year.

n

Operators feel the pain from a latency of data on a bigger scale because time passes much faster in a restaurant. A lot can happen in an hour at the cash register or in the kitchen.

n

Operator Challenge #5:

You Collect Data From Multiple Locations

Now imagine all of these challenges are multiplied across every store. Suddenly, operators are looking at a big, complex network of data that is difficult to collect, connect and deliver to managers on the front lines.

Things get even more complicated if different stores use different systems to capture data-which is common among large franchise operations. They rely on spreadsheets, or disconnected in-house software and data is often lost, corrupted or simply mismatched.

Even if operators could get their hands on individualized reports, they would spend hours trying to identify trends or outliers.

Crack the Big Data code with our latest eBook

WHY BIG DATA

IS LIKE TEENAGE SEX

Download the eBook

Don't just dream of being awesome. Get a Demo