Restaurant owners and operators are not typically early technology adopters.  Wanting to conserve precious resources, avoid risk, and minimize disruption to a loyal customer base, it’s understandable why this is the case.  However the technology world is moving underneath their feet and serves as a gentle nudge towards change.  The good news is that technology in the restaurant space is getting better and less expensive and more proven.  Customers are now anticipating and even expecting their favorite eateries and watering holes to adopt the new technology landscape.  The objective of this article is to provide restaurant owners a quick summary of the challenges and benefits of one of the biggest shifts in how we use technology – the cloud.

What is the ‘cloud’?

Here is the short and simple answer:  It is when you access a piece of software in real-time over the internet instead of having the software installed locally on your computer.

Why is it better?

It’s cheaper.  Really cheaper in some cases.  And this is the primary reason a restaurant owner should be paying attention.  Studies show that cloud computing can be up to 70% less expensive than on-premise (or software purchased and installed on one of your machines in your office.)  It can be such a dramatic savings that today’s business community is willing to live with minor downsides in exchange for the savings.   (A separate article can address how these savings are calculated.)

What types of applications are available in the cloud for restaurants?

There are numerous offerings available today:

  • Marketing
  • Catering
  • POS
  • Reservations
  • Accounting
  • Above Store
  • Recipe Costing
  • Franchising
  • Loyalty
  • Event Management

Typical Concerns and Downsides

If you have initial concerns about this deployment method, you are not alone.  Historically, there are three concerns associated with the concept of cloud computing.

  1. Up-time – Although no cloud based system can guarantee 100% up time, neither can your on-premise solution.  When you factor in the total time the service is running (24/7/365) it is easy for cloud providers to tout 99.9% up-time.  More of a concern is the Internet in your home/office/or business.  That is more likely to be spotty that the cloud service itself.  Resolving up-time concerns was discussed more about 5 years ago.  It’s still mentioned in sales cycles but it is less of a factor now because time has shown that the cloud is plenty stable and reliable.
  2. Security – Once again, time has proven that cases of security breaches are practically never heard of in the ‘business cloud world’.  For example, early cases of security lapses in Microsoft products caused an internal transformation of not only their development focus but also their marketing efforts.  They, for one, have gone over the top in trying to become the strictest when it comes to security.  Others have followed suit and it is now a prerequisite.  Security conversations have shifted from the provider to internal configuration.  Most cloud software has the ability to easily restrict access to pretty much anything you want any user to see.  It’s now a matter of configuration and setup.  If you compare this to the expense of being PCI compliant on a locally installed POS system, you will appreciate the simplicity of simply having all of your sensitive data collected and stored offsite, from the point of entry.
  3. Performance – It’s like swimming in 68 degree ocean water compared to 70 degree ocean water.  You definitely can feel the difference and when you first jump in it can feel a bit chilly but once you get swimming, it becomes refreshing.  With better internet connectivity more prevalent, computers shipping with more horse-power everyday, and cloud providers constantly simplifying their code, it is just a matter of time before the water is 72 degrees and perfect.  The good part is, everyone swims in the same ocean and has come to expect a certain level of performance from the cloud.  As long as the provider meets that minimum threshold, it becomes a non-factor (and most have.)

The Biggest Challenge

It’s less expensive.  There is no material risk.  The guy down the street is doing it.  Yet you still are having a hard time with it.  I know why.  It’s the same reason you open a banana from the top instead of the bottom when the banana is clearly designed to be opened from the bottom.  You have just been doing it that way for so long.  Change is hard.  This is much more an issue for the older generation of restaurant owners and operators than it is for the upcoming.  There will be an inflection point in the industry when the majority of restaurants adopt cloud solutions.  When that day comes, the makers of on-premise restaurant software will have to make significant investments into ‘cloud’ versions of their software (this has already begun).  For them, the cost of maintaining two code bases will then require them to drop support of their on-premise solutions and when that happens, restaurant owners will be forced to go with them into the cloud.  I’d suggest reviewing your technology strategy today so that you can act – instead of being acted upon.

Morgan Harris CPA  |  Co-founder  |  Restaurant365