Saturday, January 27, 2007

Business intelligence apps serve up actionable data and sweet bottom lines

Ross Mason, owner and sole employee of the Avenue B Grocery in Austin, Texas, leads about the least complicated life a restaurateur can imagine. He has all the actionable data he needs, in real time, although he’d be more likely to describe it as “a pretty good idea of how the day’s going.”

If there’s a run on egg salad, Mason knows about it immediately. If there’s a bread shortage looming, he can handle it. He has a complete grip on his labor costs and never gets caught off guard by a spike in overtime.

Mason, obviously, has little in common with anyone reading this. For those of you whose lives are somewhat less pastoral, getting “a pretty good idea of how the day’s going” requires collecting and analyzing copious amounts of data in real time, and that requires powerful enterprise financial apps that combine data warehousing, data mining and more.

“Keeping easy access to data is the hardest thing when you’re growing,” says Jason Dukes, MIS/POS administrator for Hops Restaurant, Bar & Brewery, which has grown to 74 restaurants (none franchised) in 16 states since the first one opened in Clearwater, Florida, in 1989. Dukes remembers that it wasn’t long ago that each restaurant would e-mail him sales figures after closing, then he would spend much of the next day hand-keying the figures into an Excel spreadsheet, leaving little time for even rough analysis.

Now, Dukes says, the Mirus ( business intelligence application receives data from all of the Hops restaurants overnight and has it processed and ready to report when Dukes arrives at the office each morning, giving him the ability to not just fully analyze the data, but to put his findings to work. “You can’t even quantify the importance of the data and the reports we get now,” he says. “We can drill all the way down to per-check data, but the real immediate benefit for us has been the ability to get a handle on labor costs.”

Keeping its promise

For Applebee’s, understanding customers’ preferences is more than a customer benefit—it’s a key business strategy. To keep its brand promise of being a neighborhood grill appealing to regional tastes, while efficiently managing the nationwide chain of restaurants from its corporate headquarters, Applebee’s needed clear, focused data on its guests.

Using business intelligence tools from Teradata ( and MicroStrategy (, Applebee’s is mining the labor, financial, and inventory management, as well as food cost variance data stored in its Teradata data warehouse. Data mining has given Applebee’s keen insight into its customers nationally and locally.

“One of our business challenges is to understand our core guest,” explains Seth Jensen, senior manager of business analysis at Applebee’s. “We want our guests to have a voice in saying what they prefer on our menu. Customer input serves as a valuable complement to the creativity of our culinary team, enhancing the team’s ability to develop menus that satisfy our guests’ preferences.”

Appetite for data

As intelligence apps grow ever more powerful and integrate with the entire foodservice technological array from POS to back office, there’s virtually nothing in or around a restaurant that can’t be tracked. And that’s where trouble lies for many new users—their taste for data overwhelms their ability to digest and use it.

It’s an easy enough trap to fall into. A new business intelligence application is installed, that allows the restaurant operator to track performance metrics (frequency, retention, new trial as compared to sales, party size, guest check, distance from unit, etc.), as well as demographics, geographics and lifestyle.

Some restaurants have grown accustomed to the data. Ruby’s Diner, for example, has developed a system that integrates data analysis from Gazelle ( with data mined from its POSitouch ( point-of-sale to “to give people all the information they need to make decisions,” explains CEO Fred LeFranc. “If you give them the right value set in terms of the company’s philosophy and its goals, then the intuition of what to do next is made easier.”

Other restaurants, not prepared for the data need to be careful, however. You can go crazy and start tracking things like how many customers paying with debit cards order ranch dressing with their lunch salads on Tuesdays following full moons, allowing yourself to be crushed by a tidal wave of trivia. That’s why Dukes advises anyone looking to better the bottom line by implementing a data intelligence app to start small and focus on a single improvable aspect of the operation. Otherwise, he warns, “You can easily get overwhelmed.”

Of course, it’s easier to avoid the overwhelming aspect by working wisely and using the enterprise-wide availability that virtually all these apps cover, whether by intranet or the Web. The three owners of Woody’s Bar-B-Q, a single-unit franchise in Atlanta, live far from one another—two in New York and one in Georgia—but they say that by using Aloha’s Enterprise (, a Web-based solution, they are able to conduct business as easily as if they shared a cubicle.

Faster ROI

“Any of us can look at any level of detail of our operation from our home or office computers,” says co-owner William Candee. “All of us have the ability to see our labor expenditures and allocations during the course of the day right down to the level of who’s on the clock and what time they punched in and out.”

Almost everyone agrees, though, that while labor savings are usually the quickest and most obvious benefits of using powerful enterprise financials, there is potential for much greater use and, therefore, faster positive ROI as the users’ expertise and understanding of the power grows. The ability to track product mix, menu additions, takeout and more, give owners, operators and managers the power to tweak even a well-running restaurant for more performance and a greater leg up on the competition.

Ross Mason doesn’t see any use for such apps in his future, but that’s okay—he also has no real competition and no plans for growth except for “maybe adding another picnic table outside.” For the rest of the world, these powerful apps are quickly making the transition from “might want” to “must have” technology