Digitisation – is it free?

Digitisation is expensive and time consuming. It rarely pays. Everyone claims that digitisation is the only way forward, but not doing it doesn’t cost anything… or does it?

By Rasmus Østergaard, FlexyBox ApS For many restaurant owners, business as usual seems like the easiest solution. Sticking to pencil and paper, a phone at the bar and an Excel sheet for the shift roster. It’s safe and familiar, and sticking to what you know requires no investment of time or money. Digitising it all quickly costs an arm and a leg, and it also seems like a daunting process in an already busy schedule. Is it wise to think this way? The recently adopted legislative measures on fiscal policy are just another nail in the coffin for the old ways of working. The new law means that, from as early as 2021, the Danish Customs and Tax Administration (SKAT) may require restaurants to use a digital sales system so that transactions and bookkeeping can be monitored. Therefore, it is not too soon to start considering whether digitisation could be a financial advantage for your business.

Digitisation costs. However, it quickly pays for itself.

Does digitisation cost money? Yes! As a restaurant owner, will you be forced to do it at some point? Yes! Should it be now? Not necessarily. However, you are losing money every day you don’t do it… In order to form a complete financial overview of digitising your business, you must not only look at costs and hours spent on digitisation, but also take into account any losses from not digitising your daily work processes. There is a surprisingly large amount of money to be saved there.

Let’s take a hypothetical (but very realistic) example:

A restaurant uses a digital POS solution, but all the other everyday tools for ordering and reporting are analogue and manual. The normal everyday situation would typically look like this:

  1. The restaurant is busy so a call that would otherwise have resulted in a table being booked is missed.
  2. The waiter takes orders at the table using pen and paper. When the waiter has made it to the front of the queue for entering information into the POS system, the order is entered and the order slip is passed to the kitchen.
  3. The waiter then has to return to the table when the chef points out that there is no indication of how the steaks should be cooked.
  4. When the group has finished eating, the waiter asks if everything was ok and if they want anything else. But the guests have finished and want to go home. They ask for the bill.
  5. At the end of the day, the till is counted, debit cards are balanced, the deposit is made and the daily report and any documentation is collected into an envelope for the bookkeeper, who manually enters everything into an accounting system.
  6. When management ask for reports and key figures, the bookkeeper or restaurant manager starts the process of making an Excel sheet showing the monthly earnings.

This is a good example of an ordinary day for a waiter at an average Danish restaurant.

 

How would that same restaurant visit look if the processes were digital?
  1. As table booking is done online, the restaurant is always available, and what would have been a missed call becomes a booked table.
  2. The waiter receives the order via a hand-held app. In the app, mandatory questions have been set up, so the waiter does not forget to ask e.g. how the steak should be cooked or whether the party may be tempted by a large beer. The order is immediately added to the bill, and tickets appear in both the kitchen and bar.
  3. When the waiter needs to confirm the order with the guests, there are no errors and the kitchen receives order slips that are easy to read.
  4. During the service, the app automatically reminds the waiter that the table has not been visited within the last 20 minutes. The waiter asks if everything is ok or if the guests need anything else. At this point, the guests are only halfway through the main course, so they order an extra soft drink and thank the waiter for the great service.
  5. At the end of the day, the cash is counted, while the rest has been registered automatically and is already in the accounting system the following morning, on the right accounts with the right VAT codes, etc. This saves the waiters time and the bookkeeper only needs to balance the accounts.
  6. Every morning, the manager automatically receives a report on yesterday’s key figures, which can be used to work and plan from.

In this digital process, the waiter wastes minimal time entering information in the POS system or running back and forth with messages to the kitchen. Fewer mistakes are made because the ordering app prevents them. The tables are visited more often, and sometimes that means selling an extra drink or dessert. In short: Time is freed up for even more great service and upselling.

The figures speak for themselves

After all, digitisation should never be a question of cost, but of cost savings and increased profits. If the digital process in the above example is translated into cash, the following is a very realistic example of monthly savings for a restaurant that is open four nights a week:

  • The waiter is reminded about upselling, so 1 regular draught beer turns into 1 large draught beer every evening. This is an additional DKK 30 = DKK 480/month.
  • Because the tables are visited more often, one additional glass of wine costing DKK 55 is sold every evening = DKK 880/month.
  • On average, one hour of the waiters’ time is saved every week because processes are quicker and easier. A waiter earns DKK 140 per hour = DKK 560/month.
  • 1 hour of the bookkeeper’s time is saved every week because manual work is eliminated and there are fewer typing errors in connection with counting the till = DKK 2,000/month.
  • 1 extra table for 2 people is booked each week because of the intelligent online booking system = DKK 4,000/month.

 

In this example, the total savings and increased turnover add up to DKK 94,560 every year, just from the digitisation of booking and ordering processes alone. This example doesn’t even include all the advantages of automatic table plans, online shift rotas, inventory management, digital menus, etc. Digitisation is not free. It’s actually even less than that! It doesn’t make sense to avoid it!

 

Read more about the ordering app here.

Read more about FlexyPOS here.