Most definitions for restaurant management software are wrong
December 17, 2018 food operations management, labor operations management
It starts with a simple thought – “I need software to help manage my restaurant. What do I buy?”
If you perform an online search for restaurant management software you will get a ton of results, but you probably won’t get much clarity as to what you should actually buy. This is because restaurant management software tends to vary in definition depending on who you ask.
Ultimately, restaurant management software really should be used to help optimize the two biggest and most important costs at any restaurant – food and labor. It’s great when the top line is growing, but if you’re investing in software to help your business scale up, that software should also be helping you turn a better profit. One of the keys to profitability is finding ways to eliminate wasteful spending, and most of those opportunities are found in food and labor operations.
So why do search results for restaurant management software vary? People have different ideas as to what it actually means. Some say that every piece of software used to run a restaurant belongs in the restaurant management technology ecosystem. Others say that restaurant management software is nothing more than the POS system. Neither of these definitions are correct.
To understand why, think back to the goal you’re trying to achieve - profitability. If you fall down the rabbit hole of software solutions for every component of your restaurant, you’ll never get anywhere. You’ll likely end up spending money on stuff you don’t actually need. Conversely, a POS system isn’t going to help with profitability either.
Your Point-of-Sale system is certainly an important piece of technology and it is integral to every transaction, so there is an impulse to label it as a restaurant management software solution. But the information you get from your POS isn’t going to help you become more profitable. Sure, it will tell you how your top line is doing, but it won’t tell you how much you spend on labor when those sales were made and it won’t tell you how much you spent on your inventory food costs.
If the goal of managing a successful restaurant is to be profitable (and provide a consistently excellent dining experience for your guests, of course), then it makes sense to define restaurant management software as a technology solution that helps grow and sustain profits. This is why true restaurant management software lives and works in the back of the house - in the back office. A proper back office solution will integrate your sales data with your cost data "holistically" to ensure you’re making the smartest decisions to increase profitability by optimizing your food and labor operations.
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