Measuring restaurant performance is ongoing work. It shows how operations are going today, and it shows where guest satisfaction and unit profitability can improve.
Good performance measurement runs on a lot of data. The data tells you how things are going, and you use it to make decisions.
To get the most from that data, start by knowing what a restaurant performance-management system can do for you and what it cannot. Here are three basics.
1. Know the difference between transactional and analytical systems
Start with a question. How much of your data do you need to understand what is happening in your restaurants? All of it. Collect and aggregate everything your operations generate, so you can analyze it and decide from the whole picture.
That data comes from transactional systems. They record the detail of every transaction they handle. The common ones in restaurants are point-of-sale (POS) and payroll.
Some operators also run transactional systems for inventory, labor scheduling, server performance, kitchen timers and guest loyalty.
Analytical systems do a different job. They collect, organize and help interpret the data your transactional systems produce. Transactional systems generate data. Analytical systems help you make business decisions from it.
Think of two kinds of school exam. A transactional system is the memorization test: recall what was entered, word for word. An analytical system is the essay: take the facts and draw a conclusion.
The best input for management comes from an analytical system that brings in all of your data from all of your sources. Then you see the complete picture of your operations and decide with all the facts.
2. Know the difference between reporting and analysis
Every transactional system comes with predefined reports on the data entered into it. Few, if any, restaurant transactional systems include an analysis engine.
Those reports tell part of the story, because they look at one data source: their own. You will also likely find it nearly impossible to import your other data sources into a transactional system to report on them.
Over time, transactional systems collect a lot of information. That is good news and bad news. More information supports better decisions, and the larger your data set, the more reliable your conclusions tend to be. But if the data is not collected and organized properly, the volume becomes the problem.
Analytical systems such as an enterprise data warehouse give you one place to store the data collected across your company. They organize it for analysis, and they do more than recall what was entered into a transactional system. They give you tools to find relationships between sets of data, for example:
- Which menu items have the longest ticket times
- How profitable delivery orders are compared with eat-in
- How loyalty members’ checks compare with non-members’ checks
3. Know what quality reporting looks like
A quality analysis system weighs many complex factors using the principles of exception-based reporting.
Exception-based reporting compares current data with a historical baseline or a desired result. When something atypical turns up, the system alerts management by mobile, tablet, text or desktop, whichever each manager chooses, so they can investigate.
It works like the spot-the-difference puzzle: two pictures, one original and one slightly altered, and the job is to find what changed.
Interpreting detailed restaurant data takes a great deal of time, and it is nearly impossible for a person to examine all the check-level data. That is where automation comes in. When the system examines the data, you save time, you miss less, and you see more of the areas that need attention.
The detail matters because summarized data can distort findings. As Simpson’s paradox describes, a summary can lead you to the opposite of the right conclusion.
A classic example is labor cost as a percentage of revenue. Most companies have a labor-cost target. If you only measure each restaurant’s day against that target, you will not see every opportunity your managers had to manage labor better. In most situations the more revealing analysis studies granular data rather than the summary.
What’s next
Putting your restaurant data to work brings real opportunity, and some risk. You do not have to do it alone. A good solution provider does more than sell you an off-the-shelf reporting system. They listen to your specific needs, shape the data so you see the analysis you want instead of a pre-packaged report, and become a trusted, long-term business partner.