Observation 1: Lack of Enterprise-wide Management
Unique Restaurant Industry Challenges in the Hospitality industry create the need to design better system architecture, improve staff training and implement improved tools, systems, and procedures your company uses daily.
Software tools currently available in the hospitality industry fall far behind the integration and seamlessness properties of tools across other sectors. We need a single device in our industry that integrates all our processes. Instead, we use a separate POS system, accounting software, payroll software, excel spreadsheets, and one or more purchasing and inventory systems with limited integration. In many industries, one ERP system brings all these tasks under one system.
A Restaurant can generate revenue, but if the financial controls are not stringent, are you seeing a maximum return from those sales? Credit card disputes are one of the easiest ways, for companies to lose money.
The lack of enterprise-wide management under one tool creates the following challenges:
- You must have a detailed understanding of how each component plays into the big picture to create the most efficient and effective IT infrastructure.
- Automation between systems or within a cycle is complex. The requirement of using different systems could leave gaps in processes. This makes for a not-so-efficient structure compared to managing one integrated system.
- The limitations of automated controls divert hospitality companies to manual processes. Each manual process/control is limited and prone to errors or fraud due to human interaction.
- Our industry cannot always afford to employ best-in-class administrative staff and spend adequate time training them.
The result is that companies operate in a less-than-ideal situation and end up losing money.
Observation 2: Restaurant Industry Challenges
Compliance risks start on day 1 of opening an entity, and requirements continue to rise to match demands. Every State presents different compliance risks.
A chain is only as strong as the weakest link; any weak areas of operation will cause a chain of events to disrupt the operations for years to come.
Some examples of compliance-related problems having a pervasive effect on the overall well-being of the Company are as follows:
Restaurants are responsible for paying sales, use, and other local taxes. When starting operations in a new state, companies must be aware of all local and state tax laws.
Everything from having a great employee handbook to having well-defined roles and responsibilities to having a good handle on HR in our industry is critical for limiting legal exposure and keeping Pandora’s box closed. Legal disputes are incredibly costly to defend and settle in monetary terms, taxing the executive’s time and overall morale.
Diligent financial reporting is paramount for all stakeholders. Without transparency and reliable financial reporting, operations will fly blind, partners will not have access to actionable information, and there will be an environment of distrust within your business.
Recording tips and service charge collection, distributing tips systematically and reliably per the agreed-upon method, and reporting the amounts allocated to the employees are crucial in building up trust with the employees and limiting legal exposure.
Observation 3: Restaurant is a Costly Business
Operating a restaurant is a costly business. Clear measures must be implemented to ensure every dollar is spent only when necessary and most wisely. Hospitality organizations are, in essence, factories with machinery and equipment and dozens of categories to buy from. It is best to create a robust policy framework and then fill it with best-in-class vendors to enhance competition to derive the best product at the best price.
