THE USE OF THE INFORMATION TECHNOLOGY IN THE CHAIN AND INDEPENDENT RESTAURANTS
PANKAJ KHAJURIA
UNIVERSITY OF GLOUCESTERSHIRE
Cheltenham, United Kingdom
2010
Table of Contents
CHAPTER 1: INTRODUCTION1
1.1: Background of the study1
1.2: Statement of the problem2
1.3: Aim of the Study:4
1.4: Objectives of the Study5
1.5: Traditional model5
CHAPTER 2: LITERATURE REVIEW8
2.1: Technological related trends in the restaurant industry8
1) Reduction of cost8
2)Administration of Employees8
3)Administration of Revenue8
2.2: Customer feed-back mechanism:8
3.3: Administration of repeat business:9
2.4: Service and marketing Administration:9
2.5: Administration of Information and Restaurant operations10
2.6: Management of HR:11
2.7: Back of the house administration11
2.8: Basic assumptions about the future12
2.9: Custom retailers' of time12
2.10: Retailers of experience13
2.11: IT and the delight of the customer14
2.12: The restaurant brand as value creator15
Key brand components:16
Knowledge-based leader18
The restaurant manager's lament19
Right versus wrong IT investment:22
The role of IT in restaurant business22
The function of IT in the restaurant experience22
Online reservations23
Building on “the human moment”23
IT in the restaurant industry24
Link between IT investment and hotel productivity and performance25
Current Developments in IT and Restaurants26
The Role of Technology in the Dining Experience26
Prearrival phase27
Preordering27
Reservations28
Other reservations systems29
Summary:30
CHAPTER 3: METHODOLOGY32
3.1: Rationale of the of Case study Method Usage32
Step 1. Determine and Define the Research Questions:33
Step 2. Select the Cases and Determine Data collection and Analysis Techniques34
Step 3. Prepare to Collect the Data35
Step 4. Collect Data in the Field35
Step 5. Evaluate and examine the Data35
Step 6. Prepare the report36
3.2: Sampling Method and Data Collection Tool36
Data Collection Tool36
Sampling37
Details of the Samples38
Firm 1:38
Firm 2:39
Firm 3:40
CHAPTER 04: FINDINGS43
4.1: Evaluation of the Case Studies43
Proposition43
Utilization of IT44
CHAPTER 5: CONCLUSION47
5.1: implication and recommendation48
References50
APPENDICES65
CHAPTER 1: INTRODUCTION
1.1: Background of the study
The research is entitled “Use of Information Technology in Chain and Independent Restaurants.” The main purpose of the research is to investigate and evaluate the existing use of IT in restaurants. The managers of the restaurants need to evaluate the pros and cons of implementation of IT. They also have to recognize the effects of technology on their firms. This case study involves three London Area restaurants. A case study was carried out to examine the strategy of implementation of new technology by the restaurants.
This proposed study contains all together six chapters.
The first chapter deals with the introduction part that consists of general background, and introduction of the traditional model.
Chapter two presents the Literature review, which helps to understand more about the Technology - related trends in the restaurant industry. Chapter three introduces the methodology adopted for the study. It encompasses source of data, sampling procedure, tools and limitation of the study.
Chapter four is the finding section, which describes all about the research areas, the people and their characteristic.
The chapter five presents the summary of findings and recommendations in the form of conclusion.
Chapter six contains the reference section; all the references from where data is derived will be shown in this section.
To make any prediction about the future is quite difficult. For example in the year 1989, it was predicted that Olive Garden, a regional Italian company would lead the establishment of a number of international “casual theme” ethnic restaurants. It was also predicted that these units will generate multi millions dollars yearly in 2007? Who would have thought that Taco Bell, a second level service oriented organization, would have completely changed the arrangement of the industry completely with the introduction of its “Value pricing” strategy. Taco Bell went on to become the fourth biggest restaurant group in the world. The restaurant business is nothing but an uncertain endeavor; therefore, this dissertation is not going to make any prediction about the future foodservice administration. It will, conversely, highlight the trend that proposes a probable future for the restaurant and food administration industry during the coming decade with the help of IT. Use of technology is vital for the restaurant business. The managers of the restaurants have to evaluate the pros and cons of implementation of IT. They also have to recognize the effects of technology on their firms.
1.2: Statement of the problem
IT plays an indispensible role in enhancing customer's dining experience. IT has a hi-tech impact on converting inputs into outputs. Over the years, IT has played a tremendous role in changing the dining experience. The manner in which food is prepared and the manners in which an order is processed and the pace at which the order is send to the customers has also undergone a rapid transformation. With the arrival of latest technologies and their effect on the operations of a restaurant, one would deduce that many of the businesses in the hotel industry would become technology based in both the production and delivery of services and goods. Almost thirty years after computers first automated the back office systems of restaurants, and twenty years after point-of-sale (POS) systems were first used in restaurant settings, IT has now finally become refined enough that it could be used as an integrated tool for decision-making systems for administration and organization of various operations of a restaurant. It is not a coincidence that restaurant chains themselves have grown large enough to afford the substantial investment that an IT infrastructure could require. Instead of upgrading systems one component at a time, restaurant managers and operators would do well to evaluate IT investments against a framework that takes all phases of the operations of the restaurant into account. This includes the major functions of guest satisfaction and revenue-administration. A system outlined in this study will provide consideration about the following facets of managing a restaurant: production systems inclusive of demand forecasting, scheduling of both dining room and kitchen, control of processes (this include managing kitchen production and meal duration), and enterprise-resource planning focusing on an extended set of back-office functions. IT clearly presents opportunities for restaurants firms. It is also considered to be of great help in evaluating the differences and distinctions between independent chain restaurants. This evaluation is built on the effects of the adoption of technology. The main rationale of this work is to observe how owners and managers come to the decision of implementing IT in their establishments and how IT will affect these firms. Researchers have studied three restaurants firms using the method of a case study. This work also attempts to lay down the basis on which hypotheses testing could be carried out. The research encompasses 3 restaurant firms (see table 1) using a case study method. This should be kept in view that IT implementation and adoption will be studied from the viewpoint of the 3 restaurants. The work endeavors to state the basis upon which potential investigation could be launched. (Mariani 2000)
Table 1: Characteristic of firms in the case study
Location
North London Area
London-Bay Area
London-Bay Area
Ownership
Independent restaurant/single owner
Independent restaurant/single owner
Chain restaurant/corporation
No. of units
N/A
N/A
20
segment
Full service
Full service
Full service
No. of seats
90
145
250
Market position
Upscale
Upscale
Mid-Scale
Cuisine
Indian
Italian
Californian
Annual sale (approx.)
N/A
N/A
N/A
Lunch
30%
25%
50%
Dinner
70%
75%
50%
No. of employees/manager
10/1
21/2
78/5
Employees, education qualification
Minimum—high school diploma
Minimum—high school diploma
Minimum—high school diploma, 40% college degree
1.3: Aim of the Study:
The main point of the research is to examine and contrast the present use of the Technology in the independent and chain restaurants. According to the (Dictionary.com) IT is defined as “the expansion, installation and use of computers and applications”.
The aim of this dissertation is to find:
How do restaurant operators consider the end results of the implementation of IT?
The difference between independent firms and chain restaurant in the mean of acceptance, utilization and implementation of such technology?
Reasons why some firms did not opted for investing in IT, while others did and what inferences could be drawn from the comparison?
First of all this study will explore why technology is important and the technology linked trend in the hotel business. This will be going after an explanation of the methodology and approach described in this work.
1.4: Objectives of the Study
The research is entitled “Use of IT in Chain and Independent Restaurants”. The main idea of the research is to investigate and evaluate the present usage of the IT in restaurants. The managers of these establishments have to choose whether or not put into practice such technologies and how they recognize the effects of technology on their firms. A case study method is used involving three London Area restaurants. This case study was conducted to study the framework of implementation of technologies used by these restaurants. Proposals would be put forward that supports the IT adoption for the restaurants.
1.5: Traditional model
Restaurant Company is well known as a control oriented company using the conventional system. To begin, investigators ask the question,” How the restaurant has managed the qualms they have faced so far”? It is constructed on the principle that you run a restaurant as you would a well oiled machine. The person operating the machine it on in the morning, check that the staff is present and in place, that there is cash in the register and front door is open. The manager (operator) makes minor adjustments to keep the whole thing in order, do the necessary inventory, and sort out the supplies. When the day is over, the machine is switched off, cash goes into the bank or safe and the doors are closed. A very large volume of time and cost is expended to maintain this simple system. The person operating the machine are praised for minimizing beverage, food, other costs of production, and cost of labors and for ensuring that the proceeds go into the safe or bank. (Mariani 2000). IT plays an indispensible role in enhancing customer's dining experience. IT has a hi-tech impact on converting inputs into outputs. Over the years, IT has played a tremendous role in changing the dining experience
This includes the major functions of guest satisfaction and revenue-administration. A system outlined in this study will provide consideration to the following facets of managing a restaurant: production systems inclusive of demand forecasting, scheduling of both dining room and kitchen, control of processes (this include managing kitchen production and meal duration), and enterprise-resource planning focusing on an extended set of back-office functions
Some restaurant firms show a trend that includes feedback from customers regarding the performance of the service and to measure the customers' needs. To some extent “comment cards “have been introduced to the customers to get the feedback, and the process incorporates an analysis of surveys (available online) filled by all the customers. Real-time reports of guest satisfaction and alerts to corporate administration through email are also introduced and in the event that any problems arise these technologies could double
As tools for managing the establishments. It improves the transaction of services and also reduces the response time to problems faced by any customer
Previously there wasn't any software designed to process inventory administration, payroll and accounting function. New technologies have helped in the improvement of a single all inclusive software programs that are capable to work on all tasks and runs as one single platform. Technology providers usually offer outsourced workforce administration solutions that provides assistance for staff training.
One of the major technology based impact that HRM modules have on any firm's performance is that operators could direct employee behavior and the environment of the place more efficiently in order to control earnings and related costs
CHAPTER 2: LITERATURE REVIEW
2.1: Technological related trends in the restaurant industry
IT indeed makes a vital difference (Hayes 2002) and has measurable effects on the performance of any business (Devraj and Kohli 2003). Ansel and Dyer (2007) verified that the use of IT in restaurant usually provides a number of benefits including:
1) Reduction of cost
Administration of Employees
Administration of Revenue
Ability to analyze customer preferences, a decisive competitive advantage and tailor menus towards specific costs.
Use of IT in firms will permit restaurants to employ technology to reduce costs, improve efficient techniques, and allow a close monitoring of profit and loss mechanisms in almost real time.
2.2: Customer feed-back mechanism:
Some restaurant firms follow the trend that includes feedback from customers regarding the performance of the service and to measure the customers' needs. To some extent “comment cards “have been introduced to the customers to get the feedback, and the process incorporates an analysis of surveys (available online) by all the customers. Real-time reports of guest satisfaction and alerts to corporate administration through email are also introduced and in the event that any problems arise these technologies could double as tools for managing the establishments. It improves the transaction of services and also reduces the response time to problems faced by any customer.
3.3: Administration of repeat business:
Another area selected by the restaurants for modernism through IT is the collective effort to bring in more 'repeat business'. Online reservation system is one of the solution (Ruggless, 2003). Some companies like MICROS System Inc. and Open Table.com provides software that offer menus online and provide customers the facility of making reservations online. Nowadays 30 percent of the reservation is done through the Internet. Some restaurants have started to employ Dot com companies that offer web-based services to implement a more flexible program for off-peak hours pricing. This is, in addition to reservations through Internet and reservation during peak hours. Firms keep menus of client's restaurant s on a mini-web site featuring the restaurant. These websites lower the prices automatically during off peak hours or any other times that the restaurant determines.
2.4: Service and marketing Administration:
Regular dinner programs are new innovations introduced in IT. These programs allow establishments to collect and archive detailed information about the clientele. This information usually comes from comment cards and surveys posted online. By having the knowledge of likes and dislikes of the customers and their spending patterns, restaurants are able to offer their products and services more efficiently. “The most effective application of IT is to support services and processes that could decrease time spent on service related functions and bring more consistency and precision than the most thorough and skilled human beings” (Berry, 2001). IT has assisted operations of the restaurant, particularly in actions such as remote placement of orders, and without having to walk over to an ordering terminal, and permitting the staff to let the administration know about an empty table. Technology based facilities in the process related to service still offer the customers with a more friendly service and with a personal touch that makes the customer feel welcomed and assuring satisfaction.
2.5: Administration of Information and Restaurant operations
Technology could be used to develop the performance and could be observed in action in integrated business solution software designed to run restaurants operations. Lately restaurants had no choice but to use different programs that assisted with the day to day running of the business. Previously there wasn't single software designed to process inventory administration, payroll and accounting function. New technologies have helped in the improvement of a single all inclusive software programs that are capable to work on all tasks and runs as one single platform. The solutions such as remote hosting of POS are offered by Application Service Provider (ASP) (Liddle, 2001), which could be implemented by the restaurant firms for managing operations. “Some software development companies offer solution that target inventory, labor and food costs, profit and loss administration and forecasting of sales ”([Nation'Restaurant News, 2003b] & [Nation's Restaurant News, 2003a]). Such software are of great help in analysis and engineering of menus that integrates with great ease with other subsystems, such as payroll and accounting functions (Nation's Restaurant News, 2003b; Menulink.com) as well as Restaurant Revenue Administration (RRM) to increase sales (Kimes and Thompson, 2004; Susskind et al 2004).
2.6: Management of HR:
Nowadays, HRM solution are technology based that fully merge with payroll analysis and reporting system. They have a central web based portal that acts as a gateway to all associated activities. It also permits administration and staff to access important information quickly and easily and could carry out routine actions. Technology providers usually offer outsourced workforce administration solutions that provides assist for staff training. “These providers have come up with job-specific employee selection modules, that concentrate on such feature as personality skills and traits required for front end, managerial and back of house positions to assist managers to employ the right people for the job”. One of the major technology based impact that HRM modules have on any firm's performance is that operators could direct employee behavior and the environment of the place more efficiently in order to control earnings and related costs.
2.7: Back of the house administration
Technological advance the restaurant with their back of the house administration:
Different kind of equipment is used for day to day operations including ovens and fryers, chillers and freezers (Blair, 2003). The cumulative effect will be that the food, labor and various operating cost will be reduced. Some other developments are the solutions that improve the effectiveness of the things (Blair, 2003), as well as monitoring the wear and tear of equipment while recognizing, preventing and maintaining all the timetables timely (Nation's Restaurant News, 2003a).
2.8: Basic assumptions about the future
There are three basic assumptions that will comes in future trends are:
First of all establishments will rebrand themselves as consumer-oriented retailers and not as factories churning out meals. Restaurants are retailers of two products that consumers want or seek. These are 'Time' and an 'Experience' that cannot be found anywhere else... Secondly, restaurants will soon morph into consumer-focused brands. At last restaurants will soon be forced to install systems to support knowledge-based managers.
2.9: Custom retailers' of time
Time is one of the aspects that form the core of the model used by restaurants. We shall employ the term restaurant to denote any establishment where beverages and food are traded for payment. As an example, a restaurant could be in any shape, from a vendor on the street to a stable cafe, or from a Kiosk offering quick service to the business class run by an airline in an aircraft. A restaurant offers the customer means of making the most of their utility while reducing the provision of a meal. Whether the experience of the meal is designed to be an extravagance with on price bound or a requirement on a tight traveler's budget, all over history, restaurant s have placed great value on connivance and the replacement of time for money. Reid (1983) suggests the customer of a restaurant do not browse. When they but the pay in advance for the meal upon entering the establishment. The consumer who informs before hand and makes a reservation at a restaurant is actually not buying food at the moment but is making a purchase of a service of the restaurant.
2.10: Retailers of experience
Authors Gilmore and Pine (2007) suggest that any business is based on the administration of the experience of the customer and not merely on the provision of a service. Their proposition is based on “you are what you charge for” (page 194):
You will be in the business commodity, if u charges for stuff.
You are in the goods business, if you use physical stuff.
You are in the service sector if charge for the services you provide.
If you charge for the time consumers spend with you, then you are in the experience business.
Sony, the international consumer products giant, made an announcement on March 9, 2007 declaring that the business shall be shutting down fifteen of its consumer electronics manufacturing plants. Sony had laid out strategy of shifting from the electronics and in into electronic software, which will provide the network based and digital services to the entertainment, computer and internet segments. The restaurant business must understand from the Sony, the future is not about the selling tangibles like Chablis , hamburgers and foie gras. The future is all about asking payment for the software side of the production. Restaurant business are highly interactive business, where customers are less concerned about where the meal is cooked than with the manner of its delivery and what they experience when the meal is finished. While McDonald's is always apprehensive about offering a hamburger lightening quick, it built awareness and the loyalty of the consumer by selling something less tangible. “You deserve a break today” is not about the hamburger, it is a declaration of well being, of service to the customer.
According to the Pine and Gilmore point of view, the hardware will always sell on the level price as newer technologies are introduced but software is sold on the acuity of the user and previous experience. Software is usually made to be ageless. The user to their own particular requirements customizes software. Anyone could sell a poultry item, converted into a meal, the time with the family is what initiates the last long value.
2.11: IT and the delight of the customer
Current literature dealing with customer satisfaction is of the opinion that customer expectations is more about managing the customer wants and needs that creates more contentment (Schneider and Bowen). This could be attained if the administration focuses on the enhancement of the experience of the customer through generating joy and surprise (Kumar and Iyer, 2001). The delight of Customer will happen when the establishment either regularly surprise their customers or offer them the benefit of a joyful experience during the process of customer-firm exchange. Researchers have recommended that joy is the result of meeting the wants and demands of the customers on a regular basis. Kumar( 2001)state that 'it is more advantageous to cause delight by having customers totally occupied in your performances and products instead of trying to surprise. The researchers furthermore recommend that increasing the standard ,the managers of the competitive firms could work to delight the customers while being able to organize the interdepartmental roles efficiently. From the perspective of IT operating, as well as strategic goals could be accomplished if established are able to include recent developments into the businesses. Today, the loyal customers are running away at a rising rate, as noted by Schneider and Bowen (2007) who states that satisfying consumers is not enough to keep them because even content customers defect at a high rate in many sectors (p. 35).
If restaurants focus on consumers' needs by “looking more deeply into their inside states” (Schneider and Bowen, 2007, p. 37),the state of art technologies could help track the customers from one transaction to the other in a competent way. As per the findings, restaurants would be able to sell the tangibles more by employing systems based on IT to forecast the patterns of the behavior of customers , service and product utilization. This will fulfill three levels of consumer expectations: first, expectations based on dependability of services and products; second openness and assurance related expectations, and third, understanding related expectations (Schneider and Bowen, 2007). The first two types of expectations if business would sustain allegiance whereas the third level of expectation if met, according to Schneider and Bowen (2007), will enhance the loyalty of customers. As getting the all three level of expectation IT-based systems work better than non IT based systems.
2.12: The restaurant brand as value creator
Now days, restaurant models are moving away from being the factories manufacturing goods for consumption. Figure below shows the view which specifically concentrates on the e multi unit restaurant company, Firm A and Firm B shows the economic competition which still could be experienced in the industry. At the level of a restaurant , efforts to make the most of the satisfaction of the customer are still targeted on the top quality services and goods to ensure the continuation of market share. ]
Fig. 1: The restaurant brand model
Key brand components:
The brand represented by a restaurant is composed of three basic components(Muller, 2007), this entire component could be seen as the basis for a structure of a brand.
The first component is the provision of excellent services and products, which is the minimum requirement. Not a single firm could contend without first offering the best quality for the given price.
The second part is an assurance of flawless execution,. This is a basic condition for entry into the market. Large number of alternate products and concepts are obtainable in the market. Restaurant firms need to be ensured that service experiences will not go awful and will be completely satisfactory. Service experience could whether a slow delivery of the food, the drive-thru bag does not have the correct order or that the waiter is dressed in a dirty shirt. If not, the client will not move up the ladder of acceptance and loyalty.
The third main part of the administration of the brand of any restaurant is the reason of success, which could be achieved through the formation of representative imaginary. The strategy of a brand should be based on values (Aaker, 2006).
The brand represent something which in turn represents itself to the loyalists as something more than a creation. A product is anything made in a plant. The thing has characteristics and attributes and it could be either consumable or durable. The product is planned to be bought and used. On the other hand, the brand is formed to be present in the minds of the customers and has meaning and positioning . The brand is proposed to have its image fixed and engrossed by users rather than being consumed. On the highest level of the awareness of a brand, costumers will define themselves by the brands they use. For restaurant administration reaching the point in the hierarchy of brand will be a challenge. Restaurant managers should bore it in mind that the setting up of any brand of a restaurant is one of the best way to handle doubt. The future of restaurant is in the hands of the creators of the brands of the restaurant because they will become the beneficiaries of lopsided loyalty of the customers. The restaurant brand signifies faith and is an assurance which kept to the customers. Consumers experienced a confidence from all the other brands they buy and are seek the same incentive from the restaurants they frequent. Loyalty in turn will permit the creators of brand to obtain a competitive edge through a better perceptive of their customers. This customer perceptive will increase benefit through the efficient capture of more precise information about their niche in the market. It will provide the shortened reaction time to shift in the industry. The competitive position of the manager of the brand will be improved as suppliers and customers move from thinking like enemies and towards establishment of brand based partnerships.
Knowledge-based leader
One of the other significant features in the uncertainty administration is the attainment of timely information. In the restaurant business, volumes of data are gathered from each shift. If the data then is not put in a simple format, it will be just the data and does not convert into information till it could be used by organization to assist them in solving issues and in predicting the coming stage of their business(Martin, 2007).
Stalk and Hout, (p.38) conclude that, “The fundamental issue is that once information becomes old, it becomes valueless”. It defines that the information is required to be new and meaningful if it is to be of any use in competition. In the traditional model of a machine detailed above, application of knowledge is not of usefulness as much as intuition of the administration. Based on command and control system, a small volume of information use is predictable at unit level. Compilation of raw data, processing it into information is a must for any business. The administration of a restaurant is achievement oriented and is rarely pensive. It is based on tactics and rarely has results which have implications beyond a month or two. These are the behaviors on which managers are rewarded
Peter Drucker, (1955), said “The managers have a specific advantage which is information. They need not handle people but guide, organize and motivate people to do the work”(p. 412). This meant to be the solution to creating new associations among time, brand creation and altering the experience of a restaurant.
The restaurant manager's lament
Report filling to administration is the collection of data and is a one-way event. This indicates uncertainty and complexity. Knowledge based administration is basically planned on the distribution of pertinent, well-timed and significant information to those who require it to make decisions. This is built on knowledge application and not data collection. This starts at the top levels of the business.
Callahan and Van, 2007 said quite often that managers are pressed into making an IT focused decision based on conservative wisdom that is largely based in the “improving current operations” rationale. Restaurant firms have extraordinary necessities when it comes to construction of knowledge-based administration systems. There is also the customer-driven face that is fluid, which is almost organization and boundary-less and also alleged as highly irrepressible. Restaurant firm's internal organization has lend itself to the distinctive data administration formats which includes standard accounting principles, point-of-sale data collection, inventory cycles, , time and motion studies to achieve productivity and also the statistical numerical control. Data are gathered and condensed into the reports that show what has occurred over past operating periods. This is one of the traditional and predictable ways to inward looking and manages uncertainty.
Other structure which is outward looking has been the field of the data collection system of the marketing and accounting department. They use tools such as focus groups, market research, site collection models and periodic budgetary cycles. These data are collected and forecasts to be used as a scale of potential operating period performance. These both formats are fundamentally based on accounting, statistical, and efficient for most organization requirements. They are not knowledge and learning based for both employees and customers and is not designed to answer to the growing needs of the marketplace. At the end of 20th century most of the restaurant administration were remains paper based but now market trend is electronic based. Administration still views the underlying industry structure as built on a low labor cost and high tech technology cost model must realize the reverse is the case.
Let's take these two statistics from United States : 1. in 2007, 90 percent of the million US college students are using the internet(Golson, 2007), 2. 56 percent of all American school-age children have access to home computer(Russakoff, 2007). The implication of these two facts for the future of restaurant administration is quite remarkable. The college students using the internet ,and also the high school students using home PCs are today's customers and tomorrow's employees. Technologies they are using and growing up with are as intertwined in their reality as the telephone and television are to their parents. Every restaurant in the world has access to telephone in order to conduct their business. It is also obvious that the majority of restaurant around the world have some sort of computer microchip technology in their business, it could be a piece of automated cooking equipment, it could be a programmable microwave oven, a back office PC, a cellular telephone or it could even a digital watch to time the eggs as they cook. In my views firms who don't have these things are effectively marginalized and are not competitive in the world market. The questions could comes in front like: What would happen to a restaurant company's ability to hire unit managers, chefs or counter servers if the telephone and the POS system were removed? Who would work for such companies? What would happen to customer traffic, loyalty and enjoyment if the telephone and all digitally based technology were removed? This is going a return to a time of hand-written ordering slips and there would be no quick service restaurant, there will be no receipt printing cash registers, no way to make reservation or check on credit cards authorization. To not accept the idea that using technology has the potential to transform managers into knowledge workers is to condemn a company to oblivion. Martin 2007, Postrel 2008 and Callahan 2007 points out the challenge for higher administration to spend on the correct technology and employment the appropriate measure of return when mesuring the cost of those decisions.
Customers are the secondary producers in the creation system in full service businesses. The position of a secondary is to offer important information at the time of production (Olsen, 2008). To meet the high output levels from higher information processing levels for producers to meet the customer's wants and needs . Such shortcoming would result in faults and inefficiencies in the service, which from a service point of view is a result of the function of the customer as a secondary producer.
Technology advancements in database administration systems have assisted restaurants to store important information about the needs and wants of customers. As a result customers do not have to tell the hotel again to process information that was offered in last stays.
In reality, the function of the customer as a secondary producer is diminished assuming that no fresh information is process each time the consumer request for services (e.g., Landmark London Hotel, see Hotel-online, 2005f). The customers stay increase as time passes, assuming that the guest inclination remains within the range of services and products offered by the hotel. The postulation is applicable as even if the guest's inclination were to change slightly every time customers used the services and products . IT would assist in storing the information that would be used during succeeding requests. Firms those employ state-of-art technology as the number of times a guest's demand for the services, the combination and permutation of these requirements will attain a the higher level, thereby retreating their role as a co-producer.
Right versus wrong IT investment:
Many restaurants are employing knowledge-based systems. Taco Bell in the 2002 created significance by integrating the K-minus system of inventory administration and production . Papa john's pizza and Star-bucks have spent heavily in off-site regional production and ware housing facilities. Where IT is used effectively and organizational capacities expand and also productivity is improved through the investment in rational capital.
The role of IT in restaurant business
IT could also assist in reducing the cost. When off-site and online reservation is in place approaches are used to help with ordering and paying labor cost for reservation.
The function of IT in the restaurant experience
Various technologies are used to assist manage the client experience. Depending upon the phase of the food diverse types of expertise could be used to help handle the client's experience. For instance, in the pre-arrival stage, online reservations and food ordering could be employed to augment access ease and reduce the time clientele must use at the restaurant.
Online reservations
Most fine-dining eateries and about one-third of casual restaurants take reservations (Kimes and Wirtz 2007), usually handled by a member of staff at the restaurant. That recognizable approach maintains the personal touch, but it is from time to time inopportune for clientele because an employee might not be always available, it could be hard getting through at times, and the employee answering the phone is not always taught properly. Technology could be employed to ease online reservations and to offer electronic administration of reservations. Online reservations permit clientele to rapidly make a reservation at untried restaurants (Layton 2006) and also to make a reservation at any time they feel convenient. (Opentable.com offers that 26 pc of reservations are made between 10:00 p.m. and 10:00 a.m., hours that restaurants are not usually open). Additionally, online reservations give restaurants an extra distribution control (for example, Open Table estimates that 60 pc of its reservations are usual reservations [Randall Reeves, personal communication, 2007]) and offers the restaurant with no-show data and marketing opportunities.
Building on “the human moment”
The internet is no alternate for what Hallowell (2007,p.59) calls “the Human Moment a genuine psychological meet that could occur only when two person share the same material space “. The internet will be the most helpful restaurant endorsing product or services that at their core could easily be commoditized. Through the internet technology, behavior which does not add to the knowledge base, such as ordering take out or delivery, making advance reservation or any direct advertisement and image enchanted communication could effectively be offered by the hotel. One of the valuable components provided by the Internet is an inexpensive web based technology, which could be highly interactive and adapted for the use of the individual.
IT in the restaurant industry
IT is becoming a serious foundation of continued competitive advantage in the restaurant industry mainly in the area of explanation, endorsement, and allocation.
Use of IT is a major precondition in forming tactical grouping, developing original distribution methods and communing with consumer and partners while fulfilling customer demand (Chaffney, 2000). There is a need and also more awareness should be paid to IT subjects because of continuously altering condition, especially in the present situation restaurants are forced to deal more efficiently with the pace and antagonism and also increasing client prospect(Aksu and Tarcan, 2002). The vital role of IT is distilling service, improving operations , enhancing revenues and reducing costs (Huo, 2008).Many researchers have recognized a affirmative and very noteworthy relationship between the use of IT and also the development of a competitive advantage(Cho and Olson, 2008; Clemons, 2006; McFarlan, 2006; Porter, 2005). These researchers have suggested that IT is widely adopted within the restaurant industry. They also noted the noticeable evidence of the suitability and extensive use of IT in many facets of the service industry in general
As we have discussed above the use of IT on technologies resulted in prominent competition, cost drop, effectiveness, and sharing of information. These IT vary within restaurant sector, some of the instances of IT application that have been generally put into practice all over the industry are Internet, intranet, e-mail connections, central reservation systems, electronic trade, and also the web application etc.
Link between IT investment and hotel productivity and performance
IT has been found to added to augmented company output and performance (Alpar and Kim, 2002; Mahmood and Mann, 2003; Rai et al., 2007). The restaurants those adopt the IT they perform considerably superior than other outlets in conditions of cost administration and productivity. The conclusion of studies found the constructive relationship between company productivity and IT investment. Researchers in the field have not uniformly accepted performance. This is identified by the Roach(2003) that the opposing findings noted above as a so-called “productivity contradiction”. This contradiction that hotel industry was spending more on IT but output levels tended to be lower than those in other sectors. One of the other studies, where David et al(2006) evaluated the soundness of the productivity contradiction of restaurant companies. The installation of computer applications in front office would pick up output in the area of operation. The respondents in most of the cases predicted small productivity improvement from back-office organization. In the opinion of most respondents, guest-operated technology did not recover output and some respondents reported guest-operated systems such as vending and entertainment, in-room information, as well as automated check-out and check-in devices, seemed in fact to diminish efficiency. The finding indicated that technology spending do not always present direct or measurable benefit to the restaurants. The finding did not show a lucid connection between the use of IT and output of the hotel operations. IT applications of the hotel operation are separated into four categories: back-office, front-office, guest-related interface applications and restaurant administration systems.
Current Developments in IT and Restaurants
Today, in the United Kingdom, there are more than 878,000 eating establishments. They range from coffee shops where an early bird special costs as little as £5, through the kind of restaurant where the truffles are brought in from the airport by special messenger, the soup water is flown in from China and the set menu, without tips or wine, costs £300. There are almost 120 hotels in The US where dinner for two could cost £400, and about 300 more where the same meal could accompany outlandishly priced rare wines.
All restaurants are in a similar business, restricted by the similar dynamics: supply and demand, rent, fashion, competition, the weather and the state of the economy. Some restaurant chains incorporate hot dog stands and luxury seating arrangements, taking the profit from each without hesitation.
The Role of Technology in the Dining Experience
Depending upon the phase of the mealtime, various technologies could be engaged to help direct the client's experience (see Exhibit 2). For instance, in the pre-arrival phase, online reservations and online food ordering could be employed to augment admittance ease and diminish the amount of time clientele must spend waiting for the meal.
Prearrival phase
During this phase, managers should focus on making it easier for clientele to make a reservation or order their food. While this is understood, it must be pointed out that any technology used at this stage should be included with present computer systems so that any essential information could be conveyed to the proper persons and system. 3
Preordering
Preordering of food (whether done over the phone or online) offers clientele more command by permitting them to choose their food before coming to the hotel. Online ordering assist hotels by offering an extra distribution channel, provides more chances for reliable upselling, and provides hotels the chance to restructure production since they have time to set up the food before clientele arrive at the hotel-regardless of whether they dine in or take their food out. Clearly, to work well, these systems need to be tightly incorporated with the point-of-service (POS) system so that the order is ready at the particular time (Webb 2006).
Online ordering systems have been rising in popularity. In a review of fine and casual dining establishments, Lang (2006) establishes that 40 pc of the hotels surveyed take food orders through internet. Websites that recommend online ordering include Webfood.com, waiter.com, delivery.com, and foodjr.com.
Certain casual places, Outback and Applebees, for instance, have implemented curbside service, which permits clientele to call and place their order for curbside pickup at a particular time. Roughly 15 pc of casual restaurant sale come from curbside service (Krummert 2003; Hellmich 2005; Warner 2006). Curbside service permits hotels to set up orders before time but, if not correctly organized, could cause unwarranted load on the kitchen. An assortment of curbside applications are obtainable including those provided by Long Range Systems, Techknow, and QTime Solutions.
Reservations
Most fine-dining places and about half of casual places accept reservations (Kimes and Wirtz 2007), usually handled by a member of staff. This recognizable approach maintains the human touch, but it is sometimes inopportune for customers because an employee is not always there, it could be difficult contacting at times, and the employee answering the phone is not always trained properly. Technology could be utilized to ease reservations online and to offer electronic administration of reservations. Sites as opentable.com, dinnerbroker.com, guestbridge.com, and restaurantrow.com present free online reservations for clients.
Online reservations permit clientele to speedily make a reservation at untried restaurants (Layton 2006) and also to make a reservation whenever it's convenient. (Opentable.com estimates that 30 pc of reservations are made between 10:00 p.m. and 10:00 a.m., hours that restaurants are not generally open). Additionally, online reservations provide restaurants an extra distribution channel (for example, Open Table estimates that 60 pc of its reservations are internal reservations [Randall Reeves, personal communication, 2007]) and offers the restaurant with no-show data, marketing opportunities.
Other reservations systems
A different approach of automating the reservation process permits managers to create an electronic reservation book. Companies that support this approach, including JTech (HostAlert) and NTN (ProHost), offer software either for reservations or for call-ahead seating. When clientele call the restaurant or a call centre to place their reservation, the hotels could track reservations and accessibility and gather extra guest history information.
IT plays an indispensible role in enhancing customer's dining experience. IT has a hi-tech impact on converting inputs into outputs. Over the years, IT has played a tremendous role in changing the dining experience. The manner in which food is prepared and the manners in which an order is processed and the pace at which the order is send to the customers has also undergone a rapid transformation. With the arrival of latest technologies and their effect on the operations of a restaurant, one would deduce that many of the businesses in the hotel industry would become technology based in both the production and delivery of services and goods. Almost thirty years after computers first automated the back office systems of restaurants and twenty years after point-of-sale (POS) systems were first used in restaurant settings, IT (IT) has finally become refined enough that it could be used as an integrated tool for decision-making systems for administration and organization of various operations of a restaurant. It is not a coincidence that restaurant chains themselves have grown large enough to afford the substantial investment that an IT infrastructure could require. Instead of upgrading systems one component at a time, restaurant managers and operators would do well to evaluate IT investments against a framework that takes all phases of the operations of the restaurant into account. This includes the major functions of guest satisfaction and revenue-administration. A system outlined in this study will provide consideration to the following facets of managing a restaurant: production systems inclusive of demand forecasting, scheduling of both dining room and kitchen, control of processes (this include managing kitchen production and meal duration), and enterprise-resource planning focusing on an extended set of back-office functions. IT clearly presents opportunities for restaurants firms. It is also considered to be of great help in evaluating the differences and distinctions between independent chain restaurants. This evaluation is built on the effects of the adoption of technology. The main rationale of this work is to observe how owners and managers come to the decision of implementing IT in their establishments and how IT will have effects on these firms. Researchers have studied three restaurants firms using the method of a case study. This work also attempts to lay down the basis on which hypotheses testing could be carried out. Researchers have studied 3 restaurant firms (see table 1) using a case study method. This should be kept in view that IT implementation and adoption will be studied from the viewpoint of the 3 restaurants. The work endeavors to state the basis upon which potential investigation could be launched. (Mariani 2000)
Summary:
In summation, we could say that, knowledge- based systems will put in touch all managers from the unit level upwards with expert real-time information. Data-mining will offer information on demand for diverse features like: present sales tendency which take in both local and system-wide real time costing and endorsement activities, labor tracking and separate operating period output reports.
Finally and the most importantly, key to problems will be facilitated from the buildup of common experience. Knowledge based application works as a bond that brings two administration trends into a solo system. A time-focused plan without the client in mind will not produce a profit even if productivity rises. Administration of brand without middle values and implementation will never generate business success. This is true that technology could never be employed as a substitute for the high level of the converting services at the heart of any restaurant. Nevertheless, by taking it together and being molded into a united entity the hotel it becomes altered.
CHAPTER 3: METHODOLOGY
In order to research on the use of the IT in restaurants (both the independent and chain ), this study uses the case study Method as it is the most appropriate in researching this sort of topics. Case study method is an excellent manner to carry out research through the investigative technique of study. According to Darke et al. (2008) case study is the most suitable method of research methodology in the study of IT system. (Darke, 2008)
For this purpose three restaurants were selected as a sample from North London and London-Bay Area having different ownerships patterns, single Independent owner and Chain restaurant/corporation. This study will be conducted in 06 steps;
Step 1. decide and describe the Research Questions:
Step 2. Select the Cases and establish Data collection and Analysis Techniques
Step 3. Prepare to Collect the Data
Step 4. Collect Data in the Field
Step 5. Evaluate and Analyze the Data
Step 6. Prepare the report
3.1: Rationale of the of Case study Method Usage
To have a more thorough study of how restaurant businesses put into practice new technologies, it is very much important to collect data from restaurants managers themselves to have knowledge about their aims and also recognize how they analyze the effects of IT in their firm.
Case study method is a better way to carry out such a study through the exploratory method of investigation and is being sustained by the Darke et al. (2008), who refer to case study as the most suitable method of research methodology in the study of IT system. The main point is to study the apparent effects and investment choices related to technology. There are some flaws that are connected with this technique. These are: reply bias, interviewer bias, etc. Case study methodology provides us with a perceptive of a multifaceted issue or object and could enlarge experience or add strength to what is already known through preceding research. This method highlights thorough background analysis of a restricted number of proceedings or conditions and their relations. “Robert K. Yin defines the case study research method as an observed inquiry that examines a current phenomenon within its real-life circumstances; when the boundaries between observable fact and context are not clearly apparent; and in which manifold sources of evidence are used (Yin, 1984, p. 23).”Research will clarify how to use the case study method and then relates the method to an example case study plan intended to observe how one set of users, non-profit organizations, make use of an electronic community set-up. The study examines the issue of whether or not the electronic community network is beneficial in some way to non-profit organizations and what those benefits might be. Case study researchers such as Robert E. Stake, Helen Simons, and Robert K. Yin have written about case study research and optional techniques for organizing and conducting the research successfully.
Six main steps that should be taken:
Step 1. Determine and Define the Research Questions:
Step one in case study method is to start a research focus in which the investigator could refer over the course of study of a compound object. The investigator asks questions about the circumstances or issues to be studied and formative a function for the study. The object of research in a case study is often an agenda, a unit, a person, or a group. Object are likely to be intricately linked to social, political, historical, and personal matter, providing wide-ranging potential for questions and adding up difficulty to the case study. The investigator examine the object of the case study in depth utilizing an assortment of data collection processes to generate facts that leads to appreciative of the issue and answers the research question. Study research usually answers one or more questions that start with "how" or "why." These questions are targeted to a partial number of events or conditions and their relationships.
Step 2. Select the Cases and Determine Data collection and Analysis Techniques
The design stage of case study research resolve what approach to employ in selecting a single or many real-life cases to inspect in detail and which data and instruments approaches to use. Using numerous cases, each case is treated as a distinct case. Each cases conclusion could then be utilized as information adding to the whole study, except that each case remains a single case. Case studies cautiously choose cases and cautiously inspect the choices obtainable from many study tools accessible in order to augment the authority of the study. The investigator must decide whether to revise cases that are exclusive in some way or cases that are considered characteristic and might also select cases to signify a selection of regions, an assortment of parameters, or other limit.
Step 3. Prepare to Collect the Data
As we know that case study research produce a huge sum of data from many foundations, regular organization of the data is significant to avert the investigator from becoming inundated by the quantity of data and to avert the investigator from losing view of the unique research reason and questions. Preparation helps in handling huge amounts of data in a recognized and methodical fashion. Researchers arrange databases to help with categorizing, and retrieving data for analysis.
Step 4. Collect Data in the Field
The data must be composed and store numerous basis of evidence at length and methodically, in formats that could be referenced and arranged so that converging lines of question and outline could be uncovered. Researchers carefully view the object of the case study and identify causal factors associated with the observed phenomenon. Case study research is flexible, but when changes are made, they are documented methodically.
Step 5. Evaluate and examine the Data
The investigator scrutinizes raw data using many explanations in order to find connection between the research object and the result with reference to the original research issue. Throughout the assessment and scrutiny process, the investigator remains receptive to new prospects and insight. The case study method, with its use of many data compilation methods and analysis methods, offers researchers with chance to triangulate data in order to reinforce the research conclusions and findings.
Step 6. Prepare the report
Case studies describe the data in a way that alter a compound issue into one that could be
Understood, allowing the reader to question and inspect the study and reach an conclusion
Free from other investigator. The objective of the written report is to depict a compound predicament in a way that put across an explicit experience to the reader. Case studies present data in very handy ways and might lead the reader to pertain the experience in his or her own real-life situation. Researchers give meticulous attention to displaying enough evidence to add to the readers' assurance that all opportunities have been explored, obviously communicating the boundaries of the case, and giving particular thought to contradictory propositions.
3.2: Sampling Method and Data Collection Tool
Data Collection Tool
To collect the data about the restaurants included in the study, a was developed using information based on present and future IT-related industry tendency as mentioned in the previous section. This questionnaire was used as a framework to discover the acceptance and execution decisions during the interviews with managers. The questions were designed to judge views on important features linked to the impact of technology in general and in the following areas: customer profiling/guest tracking, staff training advertisement, online reservation marketing, and managing food and labor costs, payroll administration, inventory administration, and, menu analysis, accounts payable and receivable food ordering and guest comments etc.
Sampling
As shown in table 1: three restaurants were selected for the case study, the first and second independent restaurant represent the business with single owners, i.e. client1 and client2. This is to be noted that the names used to refer to the managers of all business are imaginary to preserve the confidelity of the interviewees. Owners have absolute control over the operations of the firms but with inadequate resources as compared to the chain restaurants. Firm 3 represents the business with the monetary patronage of a corporation but employing store managers with restricted decision-making capability. Also should be noted that the director of IT for Firm 3, who has more control over the decision to execute more technology was also interviewed to get a better viewpoint of the acceptance and completion of the technology decisions.
The three business also vary in the intensity of control they have on day to day operations; Firms first and second have the full control over the food and drink menu, supply ordering, supplies and equipment, hiring decisions, etc., while Firm 3 gets all instructions from the corporate office, with hiring decisions as the only exemption. By providing the difference in between the firms, it is very interesting to study how each of these firms value the importance and impact of IT on their firms.
Details of the Samples
Firm 1:
Concerning the employment of technology, client 1 analyzes financial resources as limited. He utilizes a software package called squirrel software for all front of house operations. Software package acts as a POS system and automate the procedure of ordering food; a member of the staff inputs the customer's order by employing a “touch screen” which then sends the food order to the kitchen and the beverage to the bar area. The squirrel software package also offers a program, which track e attendance of, helping with the dispensation of payroll. He also uses a software package for processing credit-card purchase. Client1 uses a software package for back-of-house from Microsoft which assists with inventory and food cost administration and scheduling of labor; he is fully conscious of the actuality that any decrease in costs will help his bottom line.
Client1 usually stay away from technology use in most of the places. He does not use technology for staff training, he prefer to train them one- on- one and with a video. He also does not employ IT to endeavor to add to the revenues; he neither sees the marketing concepts like coupons, recurrent diner programs, nor investing in a corporate website. He neither considers the marketing with the use of print like magazines, newspapers and electronic media such as internet. He also has no interest in market survey of any kind. Since 70% of his business is from repeat customers, he believes “word -of -mouth” is the finest variety of advertisement; “if a customer has a predicament with their experience, I rather deal with it right away, instead of filling them a card. If I don't fix it straight away, they might not return, and my business will be harmed.”
In summary, client1 said he seems some values as he invested in technology, technology such as touch screen food order system, which assists in making the behind the scene fraction of the job easier as well as the job of his food servers easier. This way they could spend more time with the clientele. For the most of his firm he does not realize the need to use much in technology. He specified that he spend about £5000 per year on all type of technology, which includes purchasing and leasing new gear as well as existing equipment.
Client1 sees little value in spending in technology to aid him in market development; he believes that taking care of the customer by himself is the best thing he could do for his business. Client1 said one-on-one contact is extremely important, I want to be able to look someone in the eye and shake their hand and get to know about them. “After all, a smile costs nothing and goes a long way in making the customer feel at ease at my place.”
Firm 2:
With regards to the use of technology, client2 goal is to realize at-least 3% growth per year, and he believes that the employment of technology could help him accomplish gains. 5-10% of his proceeds every year he spent on some form of new technology. Currently he employs technology to provide credit-card processing, point-of-sale software, and payroll administration. Client2 seems to be opened for employing technology in other aspects, such as customer profile development, online reservation, labor preparation and inventory administration. client2 said, “he could do anything that will permit him to use less time in the back doing official work and permitting me to spend more time on the floor with my customers.” client2 also considers that word-of-mouth is the perfect way for him to generating a new clients. Like client1, he does not see the value in marketing like coupons, recurrent diner programs or other similar programs.
In short, client2 is happy to invest in technology, especially technology described above which make the back office part of his jobs easier, as well the job of his waiters easier so that they could spend more time with clientele. On the other hand he also said that “while technology is a great thing from time to time, I steadfastly believe that there is a human element which technology couldn't reinstate, such as welcoming a customer and getting to know them. Making customers content is the name of the game. Technology couldn't help you discover what kind of wine a customer prefers or what their favorite food is; in restaurant business the only way to know more and more about the customers like and to know about their dislike is to ask them and meet them directly.
Firm 3:
Firm 3 is an American firm and having chain restaurants with 20 points in 2 states, with all hotels possessed by the corporation. Client3 have less power and skill to make changes in the firm, everything is dictated by the corporation. This could be from operation hours to menu, to the design and decoration of the place, even the uniform type as well.
Client3 explained that all choices regarding use of IT were made by the corporate office. Client3 seems no worth in employing technology to help with marketing. The Bay Area store neither employs coupons, nor does it have any partnership with local business, etc. client3 told us that “I have found that the best advertisement method is in the course of word of mouth through clientele.” He sees very little worth in the use of technology for any computerized system. Client3 finds actual worth in the use of point-of-sale software. He is very pleased with the present point-of-sale system they employ through a business called HSI software. He also sees significance in the employment of wireless technology for his server. At the moment waiters employ touch screens to place customer's orders to the kitchen sand he believes the pace of the system is first-rate, he supposes if his people place an order to the kitchen from a handheld device, which in return allow order to be served with greater speed. Client3 is a person who recognized as the decision maker for probable employment of IT within the business. He has been with the business for 10 years, for the past 7 years in the IT department. When evaluating technology strategy, client3 pointed out that they consider operation from the business point of view. Specific store executives are evaluated but will not be put into practice unless each store could do well from the result. All the daily sales information goes into a database at the head office in Los Angeles. They also use a software packages known as BI Query, which assist Firm 3 in analysis of menu, examine trend and forecast, which they employ to conclude if particular menu items need to be rejected from the menu due to deficiency of demand from customer.
Client3 indicated, when they decide whether or not to use a new IT product they collapse this process into 2 phases. The first stage is the project setting up stage and the seller choice stage. In the project setting up stage, client3 investigates the heads of all departments, makes a list of needs within his own departments. After that, higher-ranking administration convenes and finalizes the list. In the second phase, client3 told that he looks for three things when deciding whom to choose—retailer should be big enough to switch the firm, eager to convene their necessities, and supple enough to become accustomed to their system. Client3 pointed out that the yearly budget for technology is about £2 million for the financial year. He also mentioned about the system of gathering feedback from guests. They use an Interactive Voice Response (IVR) system. They also have a segment on their website, which permits for comments, and review for better respond to customer requests and complaints.
CHAPTER 04: FINDINGS
4.1: Evaluation of the Case Studies
This section analyzes the firms based on the findings, technology direction by re-visiting the research questions to provide a perception of how each firm views the issues raised at the outsets. At first firm Mr. Singh answered that he is eager to deploy the technology if it will help him to put together the job easily such as processing payroll, records etc.—so that he could devote more time to his clientele to enhance their know-how. He is also eager to invest in IT that will convert operation easily for his waiters. Mr. Singh indicates that he is not whatsoever interested to spend on technology on such as advertisement and marketing. Mr. Stewart and Mr. Brobeck pointed out that they see the worth of IT and they are willing to consider all technologies that will assist their business in improving experience of customers.
As an example of not using the training via outsourced technology could cost of not employing technology could be costing the firms from developing their business potential.
Proposition
Chains are extra likely to use new IT related development sooner than full service business.
At a great extent both chain restaurants and independents and provide slightest concern to investing in innovative technology related to functional area outside of regular procedures.
Independent firms are short-term leaning in how they analyze the effect of IT.
Utilization of IT
Do these firms at present employ IT, and is there dissimilarity between independent and chains in accepting fresh IT related development?
Firm 1 uses a point-of-sales software to move orders to the kitchen and a package to help with credit card processing, inventory administration, food and beverage cost managing and labor arrangement. Firm 3, utilize the technology much more commonly, which is not given the actuality they have much more capital then Firms 1, 2. Firm 3 also employ technology in the form of software that offers analysis of menu and automates the organization in which clientele could give comments on their experience.
Client1 said that he does not employ any type of system to properly collect comments from guests. He attempts to solve a crisis before a client leaves the place. There might be occasions when a client does not come across as obviously discontented at the time of leaving the place. Since there is no provision to call, write, and/or e-mail the comments, they might simply make a decision never return. The consequence could be loss of business for Firm 1 for a thing that could be easily not permitted. As recapitulated in the segment on technological development in the hotel industry, some of the business is taking up new technologies to some level.
At last problem of the choice to invest is investigated: why do some firms decide to spend while other does not, and what are the inferences?
Client1 and Client2 are small owners, and also be referred to as entrepreneur. Webster's dictionary defines an entrepreneur as “a person who systematizes and directs a business undertaking the risk for the sake of profit” (Webster's New World Dictionary, 2006; p. 467).
Based on the above definition owners of firm one and two emerge and fall short of the role of the entrepreneur. They mentioned that their aim is to offer a great result and excellent customer service, but on the other hand they spend on IT on an inadequate foundation because of lack of capital. Perhaps a venture in technology is a great way to augment the range of the firm's operation. They appear to be short sighted in their views and display a requirement of responsiveness that technology could have reimbursements in many diverse aspects, not just ones he identify. Client1 and client2 would not consider such investment which will return profit more than two years due to their short term perceptive to examining savings.
Third firm conversely established a readiness to spend on the use of knowledge, as explained above. As it is superior than firms 1and 2 and have more capital at their disposals, have recognized the value of IT. As a result they are better able to keep their stores performing at a high level while investing in front of house as well as back of house, as in kitchen equipment. Also in addition, firm 3 is able to collect information on client preference through software used to examine daily client purchase, and could decide which client orders over and over again. It also employs software that permits them to collect information from a website concerning client suggestion and complaint for future development. The manager of firm 3 has seen the positive effects.
As contrasted to business 1 and 2, the chains restaurant mentioned in this study have a great IT completion process in effect as revealed in the seller assortment and IT acceptance procedure. In addition, dissimilar to businesses 1 and 2, business 3 has no bound on what the span of payback stage should be for a specific investment. The orientation to technological investments is reliant on how each executive sees the effect of IT. As there is no prescribed organization in place, the level to which savings in IT will be made would depend on the administration. This leads to proposal
Unlike the independent restaurants, chains restaurants are more expected to be more slanting for the embracing and realization of Technology.
IT adoption on chains will also depend on their fiscal arrangements.
Nothing like independent, chains are more probable to use some level of recognized it technology formulation and execution processes to approve new IT. It will be depend on the manager's insight.
CHAPTER 5: CONCLUSION
As discussed in this paper full service hotels need to put into practice new service IT which is well-organized. Technology based systems are good supply based system for full service firms and should be considered as being matching to system run by staff for production and delivery process. IT based systems added the value as competence and efficiency along with the proceeds impacts. Customers needs are better handled as IT system are able to modify the invention and service to the higher level (Connolly and Olsen, 2000) while escalating the interaction point with customer. This would result in a higher level of customization of products and service. Effective use of Information Technology will improve productivity and service quality while impacting value creation for the firm's customers and for itself in a positive way (Connolly and Olsen, 2000). Guest approval is a result made up of several procedures, which need to be organized from a competence and efficiency point of view to grow the rate of each transaction without concession on quality of service.
As we have earlier discussed in this paper, restaurant firms would profit from the use of innovative knowledge that will assist in lessening the probable cause for service error and recovery costs associated with such errors, which has been the single most important worry of executives who deal with the intangibles of process. Businesses that employ superior IT will be able to meet client prospect from dependability, receptiveness, reassurance and understanding perspectives that will creates customer enchantment. If the function of the client as a secondary producer is supervised more successfully by fitting in technology in the invention and deliverance of services, restaurant would be able to lift service values, more importantly in meeting or even going beyond the client's wants and needs. Information Technology will permit restaurants to augment their operating earnings through minor price increase while being able to cut the marginal costs at the same time. The executives need to think the minor price increase and incremental operating costs of original technology against the extra transaction costs and loss in marginal revenue by not including new knowledge in the production process.
5.1: implication and recommendation
The finding of the study points out the actuality that the consequences of employing technology are discernible much ahead of time. Since our study cannot be widespread, potential studies that contain samples representing a variety of facts of the industry should check the technology connected capitalist direction of restaurants. More than a few inferences ranging from output linked impact to augmented service and product worth and enhanced client affiliation administration that technology presents. Whereas full service chains might be comparatively more technology leaning contrasted to an independent hotel. The effect of information technology for business needs to be studied at two aspects, the corporate and the restaurant level. Executives in service level are more contented in providing feedback to corporate-level managers concerning the requirements for original knowledge and there should be some level of carefulness that store-level executives should be provided in order to make a distinction concerning the employment of new technology in restaurants.
Based on the conclusion of the study regarding the three businesses, the author would offer the subsequent recommendation to practitioners.
Technology direction is a procedure for full-service restaurants, whether independent or a chain would require to time after time investigating new IT products needed for the welfare of the firm.
Technology makes huge impacts on operations such as marketing, administration; human resource etc. restaurants must scrutinize these effects so that identical expertise stress is specified to all operations.
Store-level executives need to know how to: (a) assess information technology using capital budgeting technique, and (b) diminish transactional cost using ground-breaking technology.
Expertise helps in running the firms knowledge resources so focus need to be given. Information on products, customers, and transaction needs to be directed successfully.
This study raised the detailed inquiries at the beginning regarding restaurants in the full-service hotel segment and made an effort to look for response from practitioners on their outlook on the use of present equipment, the supposed effects present and future accomplishment of technology and the probable results of not using technology. This study could provide practitioners in daily operation administration in full service restaurants, it is vital that the results be authenticated through potential investigations.
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APPENDICES
APPENDIX ONE
Questionnaire for Interview from restaurant owners
