The amount of data generated every day online is immense and constantly growing. Regardless of the industry, we have access to millions of metrics about our customers and businesses. The question for restaurants is how do you even begin to capture all this data? And when you do, how do you use it to help grow your business?
With the rapid increase in the adoption of restaurant technology, it is crucial for restaurants to not just collect this data, but have a way to analyze, and visualize it as well. It’s equally important to ensure that everyone within the operation, particularly store managers, to not only have access to this data but also understand its context.
Addressing this requires a solution that incorporates the best practices in data management while considering the unique needs of the restaurant industry. One key aspect is the ability for companies to effectively communicate critical information that can significantly impact their financial performance to individuals who may lack technical expertise in working with extensive spreadsheets or specialized data tools.
How Restaurants Use Business Intelligence
In R365’s business intelligence survey, 48% of respondents found their current tools difficult to use without in-house expertise, while 64% felt that building decision-making dashboards was time-consuming. A good BI tool enables operators to create dynamic dashboards, compare variables, and uncover hidden correlations for optimized decision-making. They can then use this data to enhance profitability in areas like sales, labor, inventory management, scheduling, and menu optimization.
Sales & Forecasting
While annual and daily reporting analyses were once the standard, the responses show that the industry is moving toward real-time reporting. Doing so is increasingly important in an economy where prices are increasingly volatile, and changes can significantly impact your CoGS.
One area BI can drive a huge impacts in restaurant forecasting through sales data. Forecasting involves analyzing historical sales data to identify patterns and trends, which can then be leveraged to predict future sales. Integrating point of sale (POS) data with your restaurant management software becomes particularly crucial for accurate sales revenue forecasting. This integration enables you to make necessary cost adjustments and develop strategies aligned with your long-term business objectives. By analyzing past sales data, you gain valuable insights to plan inventory effectively and make informed decisions regarding labor hour allocation.
An equally important part of the conversation for restaurants in keeping labor costs low, which have shot up in the past year and become the most expensive component of costs.
Like sales, labor data can be used to forecast for the future and also find areas that are consuming budget or affecting sales that can be improved on like overtime or short-staffed shifts. They can be easily compared with other metrics or time ranges to identify any trends. Are certain shifts operating better than others? Are they more profitable? And is there an underlying reason?
Leveraging the power of data has become indispensable for restaurants in today’s digital landscape. The adoption of restaurant technology is crucial for collecting, analyzing, and visualizing data effectively. BI tools empower operators to make informed decisions through dynamic dashboards and comparative analysis. This is the true power of restaurant data. By harnessing the insights provided by BI, restaurants can optimize various aspects of their operations, particularly forecasting sales and effectively managing labor costs. This adds an extra layer of strategic advantage to restaurants who leverage it. Embracing data-driven practices paves the way for increased profitability and success in the highly competitive restaurant industry.