Digital TransformationWhat it is, and how it can help your business achieve more.

Introduction

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Something momentous is happening across the hospitality industry. The conversation is shifting. More and more operators are having new conversations with their technology vendors. Instead of going to them with a shopping list of software, POS, servers and terminal requirements, they are asking a different question: how can technology help us deliver our business strategy?

And all the while, technology vendors are bringing lots of solutions and devices to market, all claiming to be able to make you faster, slicker, more profitable or deliver a better guest experience. The problem is what to choose. Make the right decisions and you can see huge benefits; get it wrong and you are stuck with an expensive system that doesn’t do what you need. In this white paper, we look at how hospitality operators and vendors can work together to deliver game-changing benefits through digital transformation.

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What Is Digital Transformation?

In short, it’s about creating a totally integrated technology framework that underpins your operations. It’s building an enterprise architecture that brings together data sources such as POS, payroll, purchasing, mystery diner, menu management, bookings, reviews and training into one central reporting hub - and then using it to deliver meaningful, accessible insight for people at every level of the business.

This kind of infrastructure not only allows you to automate where possible — and desirable — it also lets you see and analyze data from across the business, turning the mass of data previously in silos into reliable insight that helps you make better strategic decisions.

At HQ, this feeds faster, better decision-making. At site-level, it frees managers and teams to focus on the customer. Overall, it streamlines processes and reduces costs.

For example, in a digitally empowered business you can easily see how an investment in customer service training (administered by training software) has impacted upsell performance (recorded by POS and accounting software), by individual, site, area and overall, by showing both sets of data in context with each other. Without a robust hospitality operations platform, this would be a laborious, unreliable manual process.

Why Do You Need It?

Think of how Uber, Airbnb and Amazon have changed the way we live. They have harnessed technology to sell cab rides, room nights and goods of all kinds in a completely new way. Meanwhile, traditional hospitality operators have largely, chosen to let this wave break over them, believing that theirs is “a people business” and therefore somehow immune to technological disruption. That’s probably what taxi drivers thought.

Of course many operators have invested in specific solutions, often as a kneejerk reaction, still less often with consideration for compatibility with other technology. Inventory solutions, menu software, POS and accounts packages have all appeared, along with third-party plug-ins, such as TripAdvisor, mystery diner services and health and safety. Some even work on a mobile platform, so unit managers and staff can access them on their own devices.

And new applications for the hospitality sector are appearing on the technology landscape quicker than ever, especially in customer facing applications designed to drive greater engagement with customers. In a crowded market, these offer real potential to stand out from the competition so can’t be ignored. But implementing more and more new technologies only adds to the complexity.

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The result is a surge in data, much of which is presented in silos making it almost impossible to see and understand in a wider context. The answer is to change the way we look at, and invest in, technology.

Christian Berthelsen, CTO of Fourth, explains: “The fact is, IT is often seen by the hospitality industry as a cost, not an investment. It can seem out of touch with the reality of the business, which means it is underfunded. We need to raise our eyes from day-to-day issues, such as keeping the cash registers working, and design an IT architecture into the business plan so technology actively supports the operators’ strategic ambitions.”

This approach reflects the undeniable truth that the world is becoming more complex – and so is our industry. Big data is no longer news, people run their lives through phone apps, and system integrations and APIs mean that businesses expect their technology to communicate freely with others’.

We can no longer expect staff to be beholden to centralized, head office systems that they have to log in to from a desktop PC, while remembering which of their dozen different passwords to type. Unit managers prefer phone or tablet apps that they carry with them, and are keen to try new technologies that could deliver a competitive edge. Employees expect their roles to be enhanced by technology. They see continuous innovation all around them and see no reason why it shouldn’t also play a major part in helping them do their job even better.

Where Do You Start?

Define the business strategy, and map out the operations and finance roles within this. Work out what technology is in use already, and map out what technology links to what. Differentiate between ‘bedrock’ technology that underpins stable, core business processes (e.g. systems that control cost and manage people and provide data security) and more experimental technology, the latest ‘shiny new’ apps that sit on top of it.

This big picture approach will provide the perfect starting point. It will show where the gaps are, and what technology is required to bring it all together in order not just to provide better data, but crucially, interpret it in context to draw meaningful conclusions.

“My main piece of advice is to keep it simple,” says Christian Berthelsen. “Get the foundations right first. Once you have a solid technical platform, you can try new things.”

However, a single-vendor approach doesn’t work. No one supplier can deliver everything: POS, back-office, finance, booking systems and more. Instead, operators should use best-of-breed vendors to form a stable backbone. Only then can they effectively address issues such as single sign on (SSO) user identification and authentication, and BYOD (bring your own device).

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“Talk to your core vendors and put them to work (ideally for free) — and collaborate with each other,” says Christian Berthelsen. “However, remember to establish clear ownership — so everyone knows who is responsible for what data and which integrations.”

Summary

Hospitality is a highly competitive business and the winners will be those operators who can manage costs well, while attracting the best staff and enough profitable customers. Underpinning this is a digital transformation strategy that takes a holistic view.

By automating where it makes sense and using the power of diverse data streams to generate valuable insights, they can improve the customer and employee experience, increase efficiency and maximize profits.

“It’s time for IT specialists to take their rightful place in the business,” says Christian Berthelsen. “They should start by agreeing to a three to five year vision that encompasses both commercial and technological objectives. They should challenge their suppliers to work together and find the right solutions. They should prioritize their investment, set aside time and resources, and lay solid foundations. This will give them the opportunity to innovate, experiment and, of course, sometimes fail. But doing the same old stuff isn’t an option. Tomorrow’s pioneers will be those who use technology to seize the opportunities that lie ahead.”

• Process and financial efficiency.

• Staff effectiveness.

• No duplication of effort.

• Automation of routine tasks, so staff can focus on customers.

• Data only entered once.

• Employees working with an intuitive system.

• Less paper, which saves money and is good for the environment.

• AI or machine learning to accurately forecast sales, schedule staff and manage procurement.

Technology as an Enabler:

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Questions to Ask Yourself

• How does our technology support our business goals?

• Will a single data hub make us more profitable?

• What’s our ROI on technology investment?

• What else can we automate?

• Can we link all our data to make one meaningful, reliable picture?

• Will having a single hub reduce the number of logins?

• How can we streamline our business?

• Do our departments get the data they need?

• How does our existing technology help us provide the best customer service?

• Does it get people out of the back office and in front of customers?

• Is it mobile, practical and easy to use?

Frank Bandura, Group CFO Gaucho(formerly of Carluccio’s)

“20 years ago, the single-vendor model worked. Today it’s neither possible nor desirable.

“We are generating huge volumes of data that can provide valuable insights into customer behaviour, but we need a way to process and deliver it clearly to decision-makers.

“Therefore, as IT specialists, we need to deliver accessible solutions based on a centralised database, not different streams of data. Our role is crucial but difficult, so we need to be patient and tenacious. We have to get under the skin of what the business needs and break down the resistance to change that exists.

“Take time to talk to people in the organisation and find out about their issues. Get out there and see problems first hand. Learn from your suppliers and peers. Find out what products are around, how they work and what they do. Above all, have a clear strategic vision but learn and be flexible. Things change.

“It’s all about communication, but this isn’t easy. Don’t underestimate the scale of the task. However, the prize is huge. You will have an organisation where different departments are aligned. It will make decisions on the basis of information, not speculation or hearsay. Those specialist departments will all look at the same information, but bring their own particular skill and knowledge to it.

"The results are competitive advantage and higher productivity.”

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Digital Business Transformation Stages

Brian Solis, Altimeter

1. Business as usual: Organizations operate with a familiar legacy perspective of customers, processes, metrics, business models and technology, believing that it remains the solution to digital relevance.

2. Present and active: Pockets of experimentation are driving digital literacy and creativity, albeit disparately, throughout the organization while aiming to improve and amplify specific touchpoints and processes.

3. Formalized: Experimentation becomes intentional while executing at more promising and capable levels. Initiatives become bolder, and, as a result, change agents seek executive support for new resources and technology.

4. Strategic: Individual groups recognize the strength in collaboration as their research, work and shared insights contribute to new strategic roadmaps that plan for digital transformation ownership, efforts and investments.

5. Converged: A dedicated digital transformation team forms to guide strategy and operations based on business and customer-centric goals. The new infrastructure of the organization takes shape as roles, expertise, models, processes, and systems to support transformation are solidified.

6. Innovative and adaptive: Digital transformation becomes a way of business as executives and strategists recognize that change is constant. A new ecosystem is established to identify and act upon technology and market trends in pilot and, eventually, at scale.

Oliver Boardman, Head of Digital & IT OperationsFuller’s Inns

“We often talk about the digital iceberg, where technology reshapes the underlying internal relationships between marketing, HR, finance, IT and so on. This is the really important bit, which drives the changes that are visible to the customer.

“We need technology providers who want to be part of collaborative partnerships. That means having open interfaces that make it easy for others to work with them. We must focus on the customer and employee experience, making processes more efficient and increasing value.

“You can’t outsource the problem, but you’ll find the solution more easily if you get your technology suppliers in the same room.”

Questions? Call us at +1.877.539.5156 www.fourth.com

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About Fourth

Fourth provides end-to-end, best-in-class technology and services for the restaurant and hospitality industries. Their supply chain and workforce management solutions, coupled with the industry's most complete data and analytics suite, give operators the actionable insights they need to control costs, scale profitability, improve employee engagement, and maintain compliance. Since its merger with US-based HotSchedules, Fourth serves more than 7,000 customers across 120,000 locations globally. For more information, please visit www.fourth.com.