These days, almost every company has an IT budget, regardless of the industry. The restaurant industry is no exception. After all, there’s more to running a restaurant than what customers observe. Like any company, there’s a lot of back office infrastructure that makes all the many moving pieces run smoothly.
The National Restaurant Association (NRA) predicts that in 2015, the table service and fast casual segment will grow at 2.9 and 4.3 percent respectively. So it’s no surprise that restaurants’ technology budgets are also on the rise.
In fact, Hospitality Technology’s 2015 Restaurant Technology Study shows 51 percent will spend more this year than in 2014. But unlike the past few years, this year’s IT spending has a significant shift in focus.
So where is this year’s bigger tech budget going, and why?
The traditional IT budget
Last year, the top driver of technology projects in restaurants was business efficiency. This included better people management, waste reduction and automated information flow, not to mention the optimization of the supply chain.
The second highest category of IT investments was employee productivity. While this includes automating mundane and often manual tasks, it also means replacing out-of-date equipment with time and people-saving alternatives.
These top project drivers are consistent with those of other industries. But in 2015, HT’s study shows this is changing – at least for restaurants.
Breaking with tradition
This year, business efficiency still takes the top spot, but employee efficiency has fallen from 2nd place to 6th. What’s taking its place is customer engagement and guest loyalty, eclipsing security and cost-saving measures.
In other words, when it comes to spending money on technology, improving the guest experience is a top priority for restaurant owners.
One of the biggest reasons for this is a rise in customer expectations. One in four consumers say technology options figure heavily in their selection of a restaurant. This means more than providing free Wi-Fi – customers dine out for the experience. They want to feel taken care of.
Take guest paging, for example. Both full service and fast casual diners now expect high-tech paging and messaging instead of waiting around to hear the hostess call their name. The pagers make for a more relaxing and comfortable wait – and customers know that.
Other customer-centric technology includes touch screen kiosks, mobile ordering apps and a social media presence. These require more than just posting a menu on a webpage. Tech-savvy customers expect such modern capabilities, and they expect them to be interactive and easy to use.
It’s not just millennial diners who have hi-tech expectations, but since they are the fastest growing group of restaurant-goers, restaurant owners are scrambling to fill the tech void.
Serving both traditional and contemporary
Some tech projects seem focused on the traditional “business efficiency” driver, but they also enhance the guest experience. Herein lies the IT budget challenge: identifying and pursuing investments that improve both operations and the guest experience.
Table management is one such technology. A primary goal for solutions like On Cue for Restaurants is the efficient use of all available tables. By integrating wait list management with real-time table status, the restaurant increases guest throughput, reduces time and effort required of the staff and allows guests to relax until their table is ready.
The same can be said for table location technology, like Table Tracker. It increases efficiency by letting food runners find and deliver food to a waiting guest in seconds.
The best use of the tech budget
The primary drivers of restaurant IT initiatives have changed. Maximizing business efficiency is still in the #1 spot, but this year, improving the guest experience is a close second. But both goals are equally important.
Not every project can improve operations and guest engagement at the same time. But when they do, it’s a double win.
After all, operational efficiency means nothing without a happy customer.
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Jason Barge is a marketing manager at LRS and an expert in communications for the hospitality industry.