With the tight margins of the restaurant world, investing in new technology requires an airtight business case. Will an off-the-shelf online ordering platform meet all the needs of your restaurants, or is that something better tackled in-house to create a more custom solution? And if you do choose to work with a technology partner, how do you choose the right one?
In a recent webinar, two restaurant IT executives — Jay Spears of CEC Entertainment/Chuck E. Cheese and Kerry Leo of Shipley Do-Nuts shared their key considerations for technology investments and what they look for in a technology partner.
Considerations when investing in technology
Restaurants often need to weigh building their own solution against buying from a technology partner. Kerry and Jay agreed many brands will need to do both for different parts of their technology stack and shared how they decide whether to build or buy.
When Kerry joined Shipley Do-Nuts, he needed to modernize certain operations — like online ordering — quickly. There simply wasn’t time to build an in-house system. Instead, he explored technology partners for his immediate need that could also provide opportunities like catering that Shipley hoped to add in the future.
Jay agreed that if time is of the essence, it makes sense to buy the best product on the market. “Products like Olo that you can configure make your brand look fantastic and deliver value to your guests with very little effort,” he said. “Building a product like that for yourself is just silly. It's a waste of capital.”
The hidden costs of building tech in-house
Kerry also knew that his team didn’t have the resources to innovate like a technology partner would. “If we did everything in-house, we would be obsolete in six months,” he said. With pre-built technology, Shipley could benefit from features that other clients ask for, and gain access to best practices derived from the vendor’s experience across the industry. These insights enable the restaurant to improve efficiency, enhance customer experience, and stay competitive.
Kerry also pointed out that technology partners often provide best-in-class cybersecurity. While one restaurant group may have thousands of transactions a day, an ecommerce partner may be responsible for millions transactions a day across many brands — so they will be knowledgeable of and invest in cybersecurity best practices to keep clients protected.
When it comes to evaluating a pre-built solution, the upfront cost is not the only number to consider. There’s also the time and manpower needed to innovate new features, to respond to outside technology updates, and to keep ordering secure. A technology partner will take care of these concerns, so the brand can focus on providing hospitality.
However, that doesn’t mean everything should be outsourced. Kerry and Jay have a robust data lake from multiple technology sources, and they translate that into business insights using their own dashboards.
Jay said his rule of thumb is that if the technology will differentiate his company, then it’s worth building in-house. Otherwise, buy the best product on the marketplace and use it.
Choosing the right technology partner
Two things are critical when choosing a technology partner to work with: willingness to work together in a partnership and ability to scale, especially when it comes to implementation support.
Technology investments often become true partnerships, as both provider and client work together to build a better product. “You’re looking for vendors who want to partner and run that long race with you to deliver value over time,” Jay explained.
Jay and Kerry also advised examining the underlying technology of the product. The technology needs to be able to work with other systems the company uses and have modern infrastructure, otherwise there could be serious problems down the line. “Even though things look great in demo mode, somebody's got to integrate it,” said Kerry.
Then there’s scale. Jay oversees technology at over 500 Chuck-E-Cheese stores worldwide, so any solution that requires him to manually configure each store is out. Startups may not have the capacity and the capability to provide the enterprise configuration support that he needs.
Rolling out new technology for hundreds of stores is no easy feat. Jay recommends asking about the partner’s infrastructure to deliver training to get stores comfortable with new technology and getting value out of it.
Time to value
Finding the right technology and the right partner can deliver big results.
Kerry shared that he expects any new technology to show ROI within a year. When Chuck-E-Cheese rolled out Olo online ordering, order fulfillment increased from 80% to 97% in just a few weeks, providing critical income during the middle of 2020.
“Our first responsibility is to ensure the stores are ready to succeed every day,” said Jay. “And that means every bit of technology we're putting in there has to be right for the store and ready to go.”
For more insights from Jay and Kerry — including myths about the build vs buy decision — watch the full webinar.
For a deep dive into the build vs buy debate, check out Olo’s ebook.
Ready to scale your restaurant business? Request a demo of Olo’s restaurant platform.
