Technology: Making it add value
It's a waste to have all-singing, all-dancing technology if you are not applying it properly. By Phil Mellows.
The advent of broadband - or ADSL - has made it possible for businesses to have more information quicker and cheaper. Retailers are now using it to capture EPoS till data up to four times an hour. But what happens to it all? Is it being used effectively? Or is the business bogged down in information overload?
Analysed and interpreted properly, sales data can be used to reduce wastage, monitor the success of promotions and more. But Doug Hargrove is one who believes that many businesses are wasting the opportunity.
Business intelligence for licensees
Doug is managing director of Anker, which has made its name by supplying EPoS systems to around 400 large retailers across Europe. The company is now launching Anker F&B for small and medium-sized hospitality firms with between one and 50 EPoS terminals, giving individual licensees the chance to compete with the big boys on business intelligence.
A back-office system as well as a till, F&B can manage everything from payment for food and drink at the point of sale to mobile table management, stock and pricing control and profitability management, incorporating the tools that Doug feels are lacking.
"ADSL may have enabled the hospitality industry to attain EPoS data far more frequently but that investment will deliver little value unless the information is combined with financial data and analysed to provide real business insight," says Doug.
"Attitudes to business intelligence need to change. Figures irregularly drawn from spreadsheets are neither accurate enough nor up-to-date enough to support initiatives, whether it is day-to-day menu planning and staffing or a strategic expansion.
"Basic understanding of key performance indicators from gross margin to wastage will provide licensees with the ability to drive down costs, improve customer service and understand the viability of promotional programmes. The information is already being collected, so why waste it?"
In too many cases, argues Doug, information is simply tying up the system and delivering little value.
"It is certainly not being used to deliver real business insight," he says. "Raw EPoS data alone cannot transform management understanding of business performance.
"Yes, it provides an overview of cash position, sales and stock holdings. It can even provide an overview of percentage of credit card sales versus cash.
"But EPoS data holds a mine of additional business information which, if analysed, can transform your understanding of the business, from trends in time of sale to the prevalence of linked purchases.
"Combine this data with information from financial software, for example, and restaurants have an immediate indication of the cost of sale of each individual dish, based on staff costs, production time, raw product costs, wastage and promotion."
Complete overview
Like its bigger brother, called OSCAR, Anker F&B gives licensees a complete overview of stock and related information at any time, meaning that stocks and promotions can be handled more effectively, and it identifies the purchasing patterns of customers to help increase repeat business.
"This can not only underpin day-to-day business decisions that will reduce wastage, ensure appropriate staffing levels and dynamically monitor product availability but it also provides a platform for ongoing enhancements such as promotions and loyalty campaigns," explains Doug.
"An accurate gross margin calculation, for example, will enable licensees to ascertain the implications of promotional offers, from a half-price third course to new wines."
The system also has broad personnel management capabilities. All employee records are stored electronically, hours of work can be recorded and there is the option to generate employee efficiency reports that track the productivity of staff.
Selling at gunpoint...
The development of EPoS (electronic point-of-sale) systems has taken a steady course, from the first electronic tills through to touchscreen menus and, most recently, broadband technology to speed gathering sales data.
But there is a an EpoS system out there based on a different kind of technology that is currently running smoothly in about 400 British pubs, bars and clubs.
Q-Bar uses an infra-red scanner gun on barcodes to ring up transactions, similar to a supermarket system. The "till" is no more than a cash drawer with a receiver/transmitter - in effect, staff carry their own till around in a gun no bigger than a cigarette packet.
Staff swipe the appropriate code with each order (see picture) and the total cost appears on the gun. At the end of the orders he or she swipes a barcode on the cash drawer denoting a cash or card payment and fires the gun into the receiver/transmitter. Two seconds later it carries full details of each sale to a back-office computer from which a manager can do all the analysis.
The concept has been around for 20 years and was first developed for bars in the UK five years ago by Q-Systems - a company with a long history in hospitality technologies.
Managing director Mats Lagergren has found it hard work convincing the trade about the system's advantages. The main benefit is speed. "If the bar is quiet a cash register copes just as well," explains Mats. "But if the bar is busy, operators find that Q-Bar enables them to take more money."
Because staff carry most of the till's functions around with them, there is less queuing at the till. Even a big busy bar only needs a single back-bar cash drawer. Staff are trained faster than on cash register-based EPoS and there are less mistakes.
This makes service quicker - and customers buy more. One large Birmingham club using the system saw sales shoot up by 18 per cent. A study of a barman at a Woking club found his average nightly take of £900 went up to between £1,300 and £1,500. A giant Blackpool club which paid £27,000 for a Q-Bar installation was pleased to find the system had paid for itself in one week - although that did contain a bank holiday.
Cost and confidence
Cost is one factor that deters independent licensees from installing EPoS. Another is a lack of confidence in whether they can manage the system properly and get the best out of it.
Now EPoS company Zonal has launched a new service that employs its own specialist staff in managing EPoS data for individual publicans and pub companies alike.
Zonal's data bureau service is aimed at customers using its EPoS terminals who do not have the expert knowledge, specialist staff or time to manage it effectively. The bureau can manage the data from Zonal's head office in Abingdon, Oxfordshire, in the pub itself or at the pub company's headquarters.
In consultation with the licensee, Zonal can take on a number of tasks such as adding new products to the system, changing prices, setting up menus and setting promotional pricing.
It will also analyse data to spot trends, for example which products are and aren't selling, as well as identify the busiest times of the day, all information operators can use to their advantage.
The service is tailored to individual requirements so licensees only pay for the time needed, whether it is 10 or 100 hours a month.
"Our staff can apply their expert knowledge without impacting on the day-to-day running of the pub," explains Zona
