Grace Dickinson | January 14, 2023, 11:30 PM CST
Last year was a big year for technology in the industry. More than three-quarters of restaurants reported that they changed their POS system in TouchBistro’s 2023 “State of Restaurants” report, surveying more than 600 restaurant owners, presidents, CEOs, and managers. As many as 97% of restaurants reported using at least one online ordering platform, and 81% reported using an online reservations system to manage their bookings.
These are all key components of today’s modern “tech stack”, an important term for any first-time operator to understand. As the past few years have proven, building a robust tech stack has become increasingly valuable as operators look for ways to tighten operations.
But what exactly does that two-word phrase really mean?
“To me, it’s just a fancy term for all the pieces of technology that are within a restaurant’s operations,” says Ken Tsang, CTO of Science on Call, a tech support platform for restaurants. “In an ideal world, everything functions in harmony, but oftentimes, it’s a little more chaotic than that.”
From the POS system to accounting software to a physical website, all software and digital solutions that a business uses are considered part of the tech stack. As Tsang points out, the goal is to find solutions that integrate with one another, but of course, with the thousands of services out there across dozens of categories, that’s not always the reality. Yet, when you are able to build a tech stack where many parts work congruously, this is where you can really dial in your workflow. Take for example, having a scheduling solution, like 7shifts and Harri, that integrates with your POS system.
“Sometimes operators want to have scheduling tied to the POS because then you can see who was working when, the number of sales they’re making, and then determine which servers are selling the most or doing best with promotions,” says Tsang, noting that the data can help operators adjust staff training accordingly.
Even if your tech components don’t line up perfectly, the primary objective of nearly all restaurant solutions is to help make operations more efficient. The greatest challenge is often figuring out with which solutions to start.
Every tech solution requires some degree of investment. Most have subscription and/or installation fees. There’s also a time investment in terms of the setup, but to fully reap the benefits, you’ll also want to set aside time to analyze the data that comes out of most solutions, too, and to familiarize yourself with all of the features at your disposal.
“None of these solutions are magic bullets,” says Tsang. “A lot sound good on paper, but before you sign up, it’s worth evaluating how you’ll actually use them and the level of commitment on your part.”
Which solutions to prioritize often comes down to your current goals. For example, are you looking to:
There are technology platforms to help with all of these goals, and many more, plus numerous competing companies within each category. As you start weighing your options, make sure to ask for client references. (You can also sign up for our tech consult, and we’ll walk you through some options.)
“It’s important to get feedback from people that are actually using these solutions everyday,” says Tsang.
Come prepared to the conversation to also negotiate pricing. Discounts typically depend on a restaurant’s size and number of locations, but often there’s wiggle room. Be sure to ask about pricing structures, too, both in terms of what’s actually included in the base price and how pricing might change if your restaurant grows. This will help avoid future hidden costs.
Lastly, reach out to multiple companies before signing up with any one solution. With so many options, comparison shopping is important. “Do your research. Talk to people. Choosing [tech solutions] isn’t about a conversation just between you and a sales person,” says Tsang.
No matter your goals, there are a few core tech components that ideally every restaurant would have from the start. All of these are designed to reduce the manual, paper-based workflows now considered outdated – and inefficient.
Here’s a look at what a common starter tech stack looks like.
At the heart of every tech stack is the POS, a tool that has long since replaced old-school cash registers. Today’s computer-based POS systems allow restaurants to take orders, accept payments, track inventory, and often much more. “If you’re not taking advantage of technology to transact, it’s hard to say you have a built-out tech stack,” says Tsan.
You’ve got two options, a legacy based POS or a more modern, cloud-based system, and most industry experts recommend the latter. Legacy systems store data onsite on local servers and run on a closed internal network. As Toast puts it, it’s like having “family photos saved on the desktop of your home computer — not accessible via the internet anywhere else.” Naturally, that poses challenges, including a higher security risk.
With a cloud-based system, you can access POS data wherever you are, as long as there’s Wi-Fi, and all of that data, including your customer’s credit card information, is secured through constant encryption on the cloud. Cloud-based systems also typically integrate with a plethora of other technology solutions, like inventory management platforms, loyalty program solutions, accounting software, online ordering solutions, and beyond. This makes it easy to share sales data across solutions and also keep menu updates cohesive.
There are countless cloud-based POS options to compare. Some even have mobile POS capabilities, like Toast, TouchBistro, SpotOn, and Square, to name a few, which allow you to turn a tablet or even a smartphone into a cash register. This kind of technology lets servers ring up orders from devices they can stash in their apron or back pocket, speeding up checkout times and increasing overall convenience.
Your POS considerations will depend on your restaurant type, size, goals, and budget, but regardless, you’ll want to ask about factors like performance reporting capabilities, customization options, payment integration, data security, and general ease of use.
A KDS is a digital order viewing screen used to replace paper tickets, and most operators consider investing in one a no-brainer. Restaurants often have multiple KDS screens mounted near different kitchen stations (the fry station, sauté station, expo area, etc.). The KDS gets integrated with your POS so that once a server enters an order, it’s automatically routed to the appropriate station and appears on the KDS monitor.
Most modern systems also include additional functionalities, like automatically organizing dishes according to prep and cook times or notifying staff when an order’s in the queue for too long. While the benefits are numerous, first and foremost, KDS systems help reduce errors by ensuring there’s no chance of losing tickets, even during your busiest hours.
To get started, talk to your current POS company. Many offer their own, integrated KDS packages.
We’d be remiss to exclude the basics in this list. Internet, in particular, is a pivotal part of any tech stack, and you’ll want to make sure you’re set up with a firewall to keep your Internet traffic secure, says Tsang.
“Everything starts with your Internet – the computers need to communicate with the credit card processors, the POS needs to talk to the printer or KDS, etcetera,” says Tang. “You’ll want W-iFi, too, if you want to do wireless payment, QR code menus, or offer guest Internet access.”
While these days, phones aren’t technically a critical tech stack component – some restaurants now rely solely on online and in-person communication – most restaurants still provide a phone number as a means of contact. But that doesn’t mean you need to employ staff to oversee it. Instead, many restaurants are tapping into recording software to relay useful information to customers.
“You can set up an automated message about hours or location, or even push guests online to make reservations through solutions like OpenTable or Resy,” says Tsang.
Similarly, having a website – or at the very least, an Instagram account – is an important communication tool for relaying information like hours, location, and your menu. It’s also a foundational space for familiarizing customers with your brand and executing a digital marketing strategy. To get started, consider using a website building platform, which will help you design a website without needing to know how to code. There are plenty of options that cater to small businesses, but some, like BentoBox and Sociavore, for example, specifically cater to restaurants, with add-on features like built-in online ordering and gift card programs.
The pandemic ushered in a new era for online ordering, with digital orders now accounting for one-third of total restaurant and convenience store food orders, according to a recent Paytronix report. Other studies show that, although people are flocking back to dining rooms, consumers expect to opt for delivery up to 40% more than before 2019.
Naturally, restaurants are meeting customers where they are – nearly 97% of restaurants in TouchBistro’s 2023 “State of Restaurants” survey reported using at least one online ordering platform and, on average, most use close to three platforms.
There are a couple of ways to approach online ordering, but many operators prefer to use a mix of third-party online ordering systems, often combined with an in-house system. Third party platforms are those like GrubHub, UberEats, and Doordash. While partnership comes at a fee – often painfully high commission rates – third party delivery services handle much of the logistics, and also bring potential to increase your exposure through their existing customer base. (To get started, you’ll need to sign a partnership agreement, and we’ve got tips for negotiation, here.)
In-house ordering systems, on the other hand, let you cut out the middleman and give you more control. But this also means you’re in charge of all aspects of takeout and delivery. There are, however, technology solutions, like Lunchbox and Incentivio, that can help you get set up with a web-ordering platform, and integrate it with your POS to manage all sales in one place.
POS Middleware Integrators
If you’re going to use third party delivery platforms, it’s essential to make sure you have a way to automatically get incoming third party orders into your POS. This will save you from needing a person to manually ring re-ring orders from various third party platforms.
“Some POS solutions have built-out integration with the major third party services directly, and then there are companies, like Chowly, Olo, Otter, Cuboh, and ItsaCheckmate, that sit between your POS and these third party delivery platforms to sync up your menus,” says Tsang. “This way, every time you make a price update or 86 an item, you don’t have to log into every site individually.”
If you’re partnered with DoorDash, GrubHub, and Caviar, for example, middleware software allows you to manage orders and sales from all of them, in a single location. Before investing, check with your POS system to see what delivery platforms you might be able to integrate with directly.
Crucial to keeping your staff is making sure they’re getting paid on time. Payroll software helps streamline the entire payroll process, allowing you to automate direct deposit and tax filings, track hours, and set up an employee self-service portal. Restaurant-specific software also allows you to easily account for tips if received by staff as part of their compensation.
Some POS systems, like Square and Toast, offer their own payroll management add-ons. Some accounting systems, like QuickBooks, also offer payroll software. When comparing options, ask for a demo so you can ensure that the software feels intuitive and easy to use.
With labor among the highest restaurant expenses, payroll and accounting go hand-in-hand. Many operators work with a professional accountant, but whether or not you’re hiring someone to do your bookkeeping, keeping your data organized is pivotal to success. Accounting software helps you do this, designed to make it easier to track income and expenses.
The best solutions integrate with POS systems, and also track inventory, create invoices, calculate sales tax, reconcile vendor and bank statements, and even price out recipes. We recommend checking with peers for their favorite solutions and also contacting your POS company to learn about available integrations.
Online Reservation Systems (if you’re going to offer reservations)
These days, most restaurants that take reservations are accepting the majority of them online. Solutions like OpenTable, Resy, and Tok make it convenient for customers to book a table, eliminating the need to wait until opening hours to place a phone call. But reservation software benefits the operator, too, providing a one-stop shop to oversee and manage bookings, and also view personal information on guests and any special requests.
Most systems also help reduce no-shows by sending out SMS reminders and allowing operators to create ticketed events. And many platforms integrate with POS systems to sync directly with your floor plan, while helping staff gain a clear look of the upcoming flow for each night to prepare for the best possible guest experience.
Choosing the right platform for your restaurant will generally come down to price and the number of features you desire. Be sure to ask if all features are included in the base price, as well as installation.
There are countless other solutions that could be added to a tech stack. Again, this is where it comes down to evaluating your goals and what you’ll actually use. Many solutions grow in value as restaurants begin to scale
“At the end of the day, it’s about assessing if [the solution] will help reduce your costs or make you more money,” says Tsan. “If any solution isn't doing one of the two, it’s worth re-considering.”
To give an idea of other options, here are some of the most common additional technology solutions used.
Need more help getting started? Sign up for a 15-minute consultation with our Back of House technology expert here.
Grace Dickinson is a reporter at Back of House. Send tips or inquiries to email@example.com.
[Photo courtesy iMin Technology]
About The Author
Grace Dickinson is a staff reporter at Back of House. Prior to joining Back of House, Grace worked as a features and service reporter for the Philadelphia Inquirer.
Send tips or inquiries firstname.lastname@example.org