1. Executive Summary
The use of advanced technologies in the restaurant industry is the topic chosen for this paper. The topic is researched in the light of increasing growing competition in the restaurant business sector. The details of the findings are furnished below.
1.1 Parameters of the report
The major purpose of this study is to identify whether or not the long term benefits of using advanced computer technologies in the restaurant industry would outweigh its potential costs. This study will consider the case of Pleasant Hill Kitchen and Bakery, which is an American style restaurant offering spaghetti, steak, risotto, and sandwich. This restaurant focuses particularly on office workers and families. This paper will explore how the adoption of advanced technologies would add to the competitiveness and long term sustainability of the Pleasant Hill restaurant.
1.2 Description of the problem
Today the degree of competitive rivalry is notably high in the restaurant industry, and hence restaurant businesses take vehement efforts to outperform their competitors and to gain a dominant position in the market place. Since a disgruntled consumer has a plenty of potential alternatives in the restaurant sector, restaurant management take every possible effort to meet customer satisfaction. In this context, this research paper will be beneficial to the Pleasant Hill management to identify the significance of adopting advanced technologies in enhancing performance efficiency and consumer experience.
A variety of primary and secondary data collection techniques were employed to gather data/information necessary to complete the project. Mainly, the primary data collection techniques included face-to-face interviews, online interviews, questionnaires, and online surveys whereas secondary data collection techniques like previous research data were used. Since the research budget was limited, inexpensive data collection techniques like online surveys, online interviews, and previous research documents were used mainly.
1.4 Summary of findings and conclusions
It was identified that investing adequately in advanced technologies is particularly important in the restaurant industry to enhance supply chain efficiency and to meet customer satisfaction. In other words, today the use of improved computer technology is a major factor influencing the growth of restaurant business. Evidences suggest that the long term benefits of adopting advanced computer technologies in the restaurant sector are capable of outweighing its potential costs. Despite this, many restaurant owners are still reluctant to follow this practice as they are unwilling to bear the initial costs.
It is advisable for the Pleasant Hill restaurant to invest significantly in improved computer technologies like POS systems and online ordering to deliver a great diner and server experience to clients and to confront with competitors successfully. In addition, the restaurant management must update the technologies timely so as to enhance its operational efficiency constantly. It is also recommendable for the firm to use social media technologies increasingly to interact with more customers directly and to foster mouth-to-mouth advertising.
The process of computerization is of inevitable importance in the current day industries and the restaurant industry is not an exception. The restaurant industry has been growing unimaginably over the last few decades and currently it depends increasingly on computerized supply chain networks to meet consumer satisfaction at its best level possible. However, it is identified that many restaurants are still reluctant to invest significantly in computer technology as they are concerned about huge initial costs. Undoubtedly, those restaurants would find it difficult to confront with competitors successfully and this situation may affect their business growth ultimately. Today computer technology has grown beyond anyone’s imagination and it plays a noticeable role in limiting the manual labor and enhancing the overall operational efficiency of businesses. In the current context of growing popularity of internet and web-based services, computer technology can have a great influence on the business landscape, particularly on a service sector like restaurant industry. Hence, successful restaurant businesses always find it sensible to invest considerably in computer technology despite temporary decline in profitability. Referring to real-life evidences, management experts indicate that the long-term benefits of computer technology can far outweigh its initial costs. In short, today the long-term sustainability of restaurant businesses is greatly depended on the extent to which they adopt and invest in computer technologies.
In the contemporary business scenario, it is vital to discuss the importance of adopting computer technologies in the restaurant industry, and hence this paper will be really helpful for the stakeholders of the restaurant business. Currently the Pleasant Hill restaurant does not make effective use of computer technologies as it still relies on manual supply chain processes and labor. The restaurant management thinks that installation of computer systems and networks would cost the organization high and the situation would negatively affect business profitability and stakeholder satisfaction. However, it is identified that the restaurant’s major competitors have invested significantly in modern computer technologies to take advantages of the infinite scope of the virtual business and reduced operating costs. In this circumstance, it would be really challenging for the Pleasant Hill restaurant to effectively vie with its competitors who are equipped with advanced and potential computer technologies.
In the current stiffly competitive business era, the restaurant industry would not be able to serve the consumer needs efficiently unless it places great emphasis on the process of computerization. Hence, it is inevitable for the Pleasant Hill Kitchen and Bakery to rely on computerized supply chain networks so as to deliver an enhanced service experience to consumers; and the benefits derived from using the computer technology can far outweigh system installation costs and network maintenance costs and meet the interests of the company as well as consumers. This research paper will explore the potential benefits of adopting advanced computer technologies for the Pleasant Hill Kitchen and Bakery in the light of fast changing market environment. Based on the empirical evidences gathered, the paper will draw potential conclusions and also provide some key recommendations to address the issues identified.
3. Statement of the Problem/Research Project
The restaurant industry has been evolving over the years. In the 1950s and 60s, fast food chains like McDonalds entirely changed the face of the industry by facilitating quick and affordable delivery of food items. It is important to note that the restaurant industry has been a crucial part of people’s life throughout the history and hence timely adoption of new trends and practices is inevitable for restaurant businesses to ensure their long-term sustainability. To be more specific, keeping in focus of the public is extremely important within the restaurant industry. Over the recent years, there has been a shift from the fast food culture towards locally sourced and healthier food; this changing trend necessitates the use of advanced technology in promoting effective means of communication. As Tice (2012) purports, with the introduction of smartphone technology, online reservation, social media, and online payment methods, the influence of technology sector on the restaurant industry has significantly increased. At the same time, the advancements in the technological landscape also pose some level of threats to the restaurant industry. As a result, today the market competitiveness of a restaurant business depends on how it deals with technological advancements regardless of what it offers on the menu.
I was kept interested in this topic when I talked to a senior employee working in a reputed US restaurant. To my surprise, he told me that he had used the thumb print recognition technology to log into the point of sales (POS). According to him, all he had to do was press his thumb on the computer screen and the next moment he was automatically logged into his account where he was able to send order to kitchen, to see his all current and closed orders, and to monitor his sales. He claimed that this technology was extremely convenient because it guaranteed flawless delivery on customer orders and saved a considerable amount of time and effort. However, my firm is still using the manual ordering system, which often leads to delay in service delivery and employee disputes. At this juncture, I think that it is vital for my restaurant (Pleasant Hill Kitchen and Bakery) to review its current technology utilization policy so as to improve its competitiveness in the marketplace. In addition, I strongly believe that the findings of this research paper would lead to some positive changes in the firm’s approach to advanced computer technology adoption and development.
For this research, I collected data/information mainly from three stakeholder groups including restaurant owners, employees, and consumers. As my research budget was limited, I could not cover a broad stakeholder population or arrange face-to-face interviews with many restaurant owners. I made effective use of internet because it was identified to be a convenient and affordable means of collecting data. In order to compile the data needed for performing this research work, a variety of primary and secondary data collection techniques were employed.
The major primary data collection methods used for this research include face-to-face interviews, online interviews, questionnaires, and online surveys. Face-to-face interviews were mainly used to collect data/information from my workplace colleagues, managers, and some restaurant owners including my boss. Although personal interviews guaranteed active participation of respondents, it was an expensive and time-consuming method and was used restrictively. A number of restaurant owners, top managerial personnel, and IT experts were interviewed online using web-based applications such as Skype. Although I tried to arrange online interviews with more number of professionals from the restaurant industry, it was often very difficult to obtain their appointment. In addition, some online interviews were disrupted due to connectivity problems and hence not executed as planned. Hence, I relied increasingly on questionnaires and online surveys for gathering data/information concerning my chosen topic. These methods were primarily used to collect data from consumers, who constitute the largest respondent group of this study. Although the level of participation was low under questionnaire and online survey techniques, these data collection methods were less expensive and easily executable. As part of secondary data collection, I went through a large number of previous quantitative and qualitative research studies and thus gathered valuable data/information for drafting this paper. In addition, I used internet as a potential source of secondary data collection. Some statistical surveys previously conducted and industry reports published also helped me accumulate a range of key data/information relating to the use of computer technology in the restaurant industry.
5.1 Benefits of using new technology
In the restaurant industry, the use of some advanced technologies benefit managers whereas some others contribute to the convenience of consumers. However, the benefits of using some technologies are shared by both managers and consumers. As an industry expert pointed out in the online interview, if there was an efficient product ordering system in operation that facilitated effective tracking of product use and faster delivery, it could assist the management to enhance supply chain efficiency and to reduce the cost of production that in turn might be passed to the customer. He added that if a restaurant installed a tablet-powered system that allowed consumers to order items at the table, it would cut down the labor costs and enhance the consumers’ service experience. Referring to the responses from a number of restaurant staff, advances in the online ordering and touchscreen technology can greatly add to the performance efficiency of the front of the house. In online surveys, a couple of restaurant managers responded that progress in the POS systems and online advertising can notably benefit the back of the house. Undoubtedly, advanced POS systems can increase the speed, efficiency, and ultimately the productivity of waiters (Issacman, 2014) whereas online advertising can assist the management to gain wider market coverage at cheaper costs.
5.2 Costs of using new technology
It is evident that the use of advanced technologies would always lead to additional financial costs. In order to install POS systems, order tracking, and touchscreen technologies, restaurants must be able to raise additional capital and tech savvy employees. Undoubtedly, this scenario would impose huge financial burden on small and locally owned restaurants. As Hardy (2014) points out, in addition to the initial costs involved in the purchase and installation of such advanced technologies, the restaurant owners may also need to spend further on their maintenance and updation. Referring to a few restaurant owners, another potential disadvantage of using new technology is that it significantly limits the scope of personal interactions between consumers and the restaurant staff. For instance, when there is a tablet-powered ordering system in operation, the staffers do not obtain an extensive exposure to interact with consumers and this situation negatively affects customer loyalty. Many restaurant staffers argue that the adoption of new technologies like POS systems would result in large number of job cuts.
5.3 Using social medial in the restaurant industry
Today most of the people access one or other form of social networking websites such as Facebook, Twitter, or Instagram to connect with their friends and relatives and to share their ideas, views and opinions. In this context, as Stearns (2014, p.263) points out, many restaurants have begun to capitalize on social media by using this virtual platform to enhance mouth-to-mouth advertising. In the restaurant industry, a potential customer is most likely to visit a restaurant when he/she hears positive opinions about that restaurant from his/her friend or relative. By creating and maintaining an official account/page in social websites like Twitter, Facebook, or YouTube, a restaurant business can keep the existing and prospective consumers informed of its special items on the menu and gather customer feedbacks. Positive customer feedbacks posted on social media will certainly bring new business as people always give more importance to a real consumer’s experience rather than ads or promotional campaigns (Stearns, pp.263-264). In addition, a restaurant can post the images of its food items and service environment on the social media as part of business promotion.
Why the benefits of technology use outweigh the costs?
Although the adoption of advanced technologies may cause restaurants to incur a considerable amount of initial installation costs and maintenance costs, this practice would benefit the restaurant business in the long term. It is obvious that the use of advanced technology in the restaurant industry may increase the consumer satisfaction by making the whole diner and server experience more enjoyable. If a restaurant hesitates to adopt new and advanced technologies, consumers would turn towards other restaurants that offer them improved and regularly updated technologies. It is an undisputed fact that there are plenty of potential alternatives in the restaurant industry for a disgruntled customer. In online surveys, a number of HR managers indicated that adoption of new technologies in a restaurant can reduce the stress and annoyance of waiters because they do not need to wait on a particular table. As technical experts point out, online ordering technology is able to assist the restaurant to track its customers’ preferences so that the business can structure their offerings in a more effective manner.
Referring to the finding of this research paper, it is recommendable for the Pleasant Hill restaurant to invest more in its technological landscape to deliver enhanced diner and server experiences to consumers. If the restaurant is still reluctant to adopt new technologies, it may lose its market share to competitors and eventual the firm would go out of the business. Although the practice of implementing new technologies may cost the restaurant significantly at the initial phases, it would outweigh those costs in the long run. Before shifting towards advanced technologies, the Pleasant Hill management must perform a comprehensive market study to understand what their primary competitors are doing in terms of technology. Such an understanding would better assist the firm to choose more apt technologies that would provide a competitive edge over the rivals in the marketplace. Since the implementation of consumer-interaction technologies may result in a number of job losses, the restaurant staff may oppose the planned change. Hence, it is advisable for the restaurant management to plan and implement appropriate change management programs so as to address employee resistance to change. Finally, it is suggestible for the Pleasant Hill management to make effective use of social media to interact with a broader consumer population and thereby to promote its business.
Hardy, K. (November 2014). The Digital Revolution. QSR. Retrieved from http://www.qsrmagazine.com/ordering/digital-revolution
Issacman, J. (March 2014). More Than Just a Cash Register. FSR Magazine. Retrieved from http://www.fsrmagazine.com/kitchen-sink/more-just-cash-register
Stearns, D. (2014). “Food safety and the law: Understanding the real-life liability risks”. In Food Safety: Researching the Hazard in Hazardous Foods. Almanza, B., Ghiselli, R & Khan, M. A. (Eds.). (2014). CRC Press.
Tice, C. (July 12, 2012). How Restaurants Are Using Technology to Deliver Better Customer Service. Forbes. Retrieved from http://www.forbes.com/sites/caroltice/2012/12/07/how-restaurants-are-using-technology-to-deliver-better-customer-service/