How restaurants can save money by outsourcing their IT
Published December 13, 2021
By Cary Green, Restaurant Strategy & Digital Transformation Services
The economics of outsourcing restaurant IT
Technology is almost as critical to a modern restaurant’s success as consistently great food and service. Between online reservation systems, staff scheduling software, inventory management and payments, today’s restaurants have to be as sophisticated as tech startup.
Managing all that technology so that it works together seamlessly requires talented IT professionals.
But restaurants aren’t IT companies—and they shouldn’t have to be. An in-house IT team is expensive to staff, and the software and hardware required to do the job properly are expensive to purchase and maintain. Operating without an IT team leaves a restaurant vulnerable to cybersecurity issues, system crashes and outdated technology.
The need for IT services tends to be invisible when everything is working well. When something breaks and orders aren’t getting sent to the kitchen, or servers can’t take payments, that’s when an IT provider’s phone starts ringing.
Restaurant franchisors and their franchisees should outsource their IT operations because dedicated IT service providers can deliver better service for less money than an in-house team. That frees up time and resources for restaurateurs to focus on improving their bottom line and the customer experience.
Outsourcing saves on IT costs
Software management and maintenance is technically challenging, time-consuming and costly for a small staff. This is particularly true when the staff must address multiple disciplines and responsibilities within the IT function.
A recent NCR Hospitality Professional Services case study demonstrated the IT costs and savings for a hypothetical quick-service restaurant chain with 1,500 sites.
A dedicated IT service provider could deliver the same services at the same volume for approximately 15-22 percent less.
The service provider can cut costs and provide equal or better service because its core business is IT operations, and economies of scale are on its side.
An IT service provider can invest in best-in-class tools and processes, then spread that investment across multiple clients.
This means a restaurant owner can offload the effort of keeping hardware and software maintained and upgraded, troubleshooting when things go wrong, developing new applications, and providing other IT operations while saving money.
Specialized IT professionals are expensive to hire (and keep)
For restaurant owners, IT operations are a cost center, not a revenue generator. So they tend to hire lean, jack-of-all-trades IT teams instead of investing in specialists. Even the big corporations may only have IT teams in the dozens, not the hundreds.
Finding IT professionals with expertise in the hospitality industry is difficult, and a local IT provider likely doesn’t have the specialized experience with platforms for point-of-sale, kitchen and back-office operations.
If a restaurant can only afford a small staff, there will likely be gaps in the team’s knowledge. A large IT provider has a network of professionals it can lean on to solve nuanced, technical questions. That means less time wasted on research and testing solutions.
And with a small staff, IT professionals have fewer opportunities for growth and upward mobility at your restaurant than they would at a large IT provider.
A global IT service provider’s reach also enables it to hire local near-shore and off-shore talent. That means IT providers can find the best help at the lowest cost.
Restaurant owners can scale their workforce as necessary based on their contract with an IT provider without the expense and hassle of recruiting and training. They also don’t have to account for the office space and other costs that go into supporting those employees.
IT service providers with a global reach deliver consistent results and evolve fast
For restaurant corporations, contracting one IT service provider with global reach is preferable to managing dozens of contracts with local providers. In that fragmented, localized approach, franchises in different regions try to develop their own approach to IT services like application development, network operations and IT project management.
It’s a suboptimal model. It leads to inconsistent guest experiences because the IT skill set from locality to locality and region to region is not the same.
A single IT provider can deliver better consistency, and because its professionals are located worldwide, they can meet the needs of a diverse client base under the umbrella of a single agreement.
A global team can cross-pollinate, iterate on what they learn from each other and gain knowledge rapidly, applying best practices and standards globally.
Outsourcing frees money and people to focus on business growth
Outsourcing IT services saves money for restaurant owners and lets them reassign staff positions in a way that improves their business.
Related: IT outsourcing frees restaurant owners to redirect precious resources
Maybe it means the restaurant can now bring in data analysts, or you can investigate new kitchen technology. By offloading the mundane, day-to-day tasks like help-desk operations, security operations and menu maintenance, you can focus on your strategic initiatives and grow and shape your future.
IT outsourcing makes financial and operational sense for restaurants
IT in a restaurant should be like flipping a switch and the lights come on. IT outsourcing can provide a "restaurant utility" that just works. The restaurateur doesn't need to know how, but can trust it will always work when needed.
Each client is different, with different operational priorities. However, the IT- managed services industry has thrived for more than 50 years. It may be new to the hospitality industry, but the economics of outsourcing are undeniable. A large, multi-national service provider can always deliver the services at scale for less money than a single IT department can provide.
