hospitality technology made simple by kevin sturm Consulting

has your POS become a commodity?

Over the past few years I've heard lots of talk that individual technology systems like point-of-sale (POS) have become a commodity purchase. All the solutions do basically the same thing so it doesn't so much matter which system you go with. Now, I can't argue with the point that most POS systems have the same basic functions. After all, a cash register and an enterprise POS terminal do the same thing from the guest's perspective. But, I highly disagree that POS systems have become a commodity. That does not mean however that your POS has not become a commodity.

[For clarification I use the term "enterprise POS" versus "cash register" for
lack of better way to differentiate the two very different solutions.]


The differentiating factor is in the setup and use of your POS. Time after time I work with clients that purchased an enterprise POS solution that was $1500 or more per unit, but then configure the system to work like a basic cash register that costs $200 per unit. Here is my top 10 do not list in preventing your POS from becoming a commodity.

top 10 "do not" for your POS
  1. Do not use generic items for ordering daily specials (i.e. fish special, meat special, pasta special). Setup the actual item in your system.
  2. Do not believe seeing 115 "Soda" in your product mix report is tracking beverage sales. I'll point out why this is important below (moot point if you have a self-serve fountain).
  3. Do not have "Open Item" available to all staff because you are too lazy to ensure all items are in the system. Have "Open Item" only for true emergency scenarios and controlled by management.
  4. Do not let employees share ID's. This creates a theft risk, audit problems, and data integrity issues.
  5. Do not let servers get away with voiding checks without entering an accurate void reason. This can have drastic affects on your product mix if you are a high volume venue.
  6. Do not treat refunds, voids, and comps the same. They are different both operationally and financially.
  7. Do not assume your POS cannot do something just because the tech support rep you spoke to at your vendor says so. Escalate up the chain until you get the same answer from two people that have worked there for a least 3 years.
  8. Do not assume someone is auditing the accuracy of your item database. Make a point to schedule a review and update it at least twice per year. Duplicate items, bad naming, and inaccurate assignment happen even under the most scrutinizing eyes.
  9. Do not leave the "cost" field blank if you know the cost. Having this information is extremely valuable for understanding food costs and profit margin.
  10. Do not rename an existing item you no longer sell to create a new item unless you are 100% confident your POS tracks the name of the item at transaction time (most only track the ID). If it does not record it your historical reports will show whatever the name of the new item is, never showing the old name.
So now your thinking, "Hmm....I do half of these and paid way more than $200 per unit." The good news is none of these things are hard to fix. A little time and knowledge can tune your POS right up.

There is a long answer to the "why is it important" of these points, but I'm going to focus on the short. In short - Business Intelligence. Business Intelligence (BI) or analytics is becoming more vital for venues in order to compete. And if you do any of the above 10 things you will find your BI purchase makes these problems glaringly obvious, and you will need to fix them anyway. There are three main reasons the above 10 rules apply to getting good information from your BI solution.

top 3 BI reasons to follow the top 10 "do not" for your POS
  1. POS solutions are hugely valuable because your customers are paying you to give you their preferences. (Read that sentence again.) If you are not tracking what they are actually buying then tracking customer preferences becomes much harder. With customers expecting a more personalized experience at every turn, knowing what they like when and where is important. If I order the fish special only when it is not salmon, your data on my preferences is available but inaccurate.
  2. Tracking historical inventory control and food costs is vital to measuring profit. If you are not tracking historical costs to historical revenues then your profit analysis is really just theoretical, and your analytics data in this area will be useless.
  3. A huge benefit of POS data in BI (though less pointed out) is tracking and controlling employee performance. Versus just looking at a daily, weekly, or monthly views of employee performance you can see comparative detail and create benchmarks for performance.
If you need help in moving your POS purchase from a commodity to offering a value added benefit to your business post a comment or email me.

For more information about kevin sturm Consulting please visit my website or email me.

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