Restaurant organizations are increasingly turning to data to help manage their operations more effectively, improve marketing, drive revenues, increase profit margins, ensure competitiveness and grow their businesses. Unfortunately, today, the most widely implemented solutions aren’t Business Intelligence (BI) or Business Analytics (BA) solutions. No, today, the vast majority of restaurant companies rely on reports generated by the very systems used to operate (POS, BOH, etc.), their businesses.
Why? In my humble opinion, there’s a lot of confusion around terms being used to describe what any restaurant company may be receiving when it comes to their reporting. There’s Above Store Reporting (ASR), BI and BA to name a few. While they each provide a means to an end, that end is very different in each case.
So, what is the difference between ASR, BI and BA? Is there a difference? Does it matter?
Let’s take a closer look.
Above Store Reporting (ASR)
For whatever reason, I haven’t been able to locate a formal definition for ASR . However, to me, the reason for this lack of definition is because ASR was driven by multi-unit restaurant operators who were frustrated with the manual process of gathering data from each location’s POS / BOH systems. Once collected, they then had the task of assembling it into spreadsheets so they could bring it all together at corporate (Above Store) to get a more holistic view of their operations. Most POS and BOH providers (at least those not wishing to become extinct) quickly responded to these requests and developed systems offering operators easy access to summarized sales, labor and PMIX data from all of their locations, eliminating the manual data gathering and Excel processes.
While this level of reporting improved access to consolidated information, this information was very limited and fell short in its ability to answer anything more than what happened. This was due in part because these systems lack the ability to report on anything beyond the data they produce. Secondly, data was shared in preconfigured (‘canned’) reports and lastly, showed mostly summarized information. As noted, summarized data, e.g., Gross Sales per store for yesterday tells you sales (WHAT HAPPENED) per location for yesterday. However, if you happen to notice a few locations seem to be off, this data won’t tell you WHY. As a result, more restaurant companies are seeking out a more robust solution such as BI, to help them get fact-based answers to WHY and gain deeper insights into their businesses.
Business Intelligence
Business Intelligence (BI): is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.
The definition of BI was fairly loose and subject to some interpretation. This allowed any vendor whose system enabled access to information for analysis purposes to adopt and use this term to describe their reporting capability. Many who previously used ASR to describe their reporting quickly replaced ASR with the term, BI, lest they are left behind.
Business intelligence solutions are among the most valuable data management tools available. BI solutions help to collect and analyze current data with the purpose of transforming it into actionable information to improve business operations. Meanwhile, business analytics software analyzes historical data to predict business trends, usually with an eye toward improvement, and, often, preparation for change – menu items comes to mind as one of those more frequent changes.
In broad terms, BI systems are used to improve and in certain cases, streamline operations. BI provides a number of benefits including powerful reporting, visualizations, and data analysis capabilities.
Additionally, a robust BI tool should help you aggregate and analyze a wide range of data (POS, BOH, Financial, Voice of Customer, etc.), to help identify areas of opportunity for improvement and growth. The value of data increases with it can be combined with other data. For example, customer feedback trends reveal more when combined with sales trends, labor trends or both. To accomplish this reporting having access to an easy to use ad hoc report writer is a powerful addition when coupled with data aggregation. It allows the business user the ability to address questions without the need to involve their IT team and get fact-based answers that lead to better business outcomes. A capable BI tool should also offer the ability to deliver (near real-time) exception-based alerts to help management and team stay on top of issues before they affect the business / bottom line.
Business Analytics
Business Analytics (BA) refers to the skills, technologies, practices for continuous iterative exploration and investigation of past business performance to gain insight and drive business planning. Business analytics focuses on developing new insights and understanding of business performance based on data and statistical methods.
In other words, BA can answer questions like why is this happening, what if these trends continue, what will happen next (that is, predict), what is the best that can happen (that is, optimize)
Like business intelligence, BA collects and analyzes data, employs predictive analytics and generates useful reports, helping identify and address an organization’s weak points. Beyond that, BA is used to explore and analyze historical and current data and identify past business trends. It then uses that data to predict, and in most cases prepare for, future business climates. In effect, business analytics uses predictive analysis to solve problems before they’ve occurred.
Choosing Between ASR, BI or BA
ASR is BI, no, BI is part of BA, still others say BA is part of BI and others simply say that none of it really matters. Why, because all too often organizations will use the terms interchangeably in their marketing materials.
Today, some restaurant companies will continue to stick with ASR, remaining satisfied in simply knowing what happened. Ideally, they’ll feed that information into their decision-making to help make changes as needed.
Others will find that progressing to a state where they can leverage their data to understand WHY things are happening will seek out an advanced BI solution. Still, others will find a need to add that predictive element so they can begin to make changes to improve outcomes.
Each approach offers value, just in different ways. Choosing the solution for your business depends on your specific needs. Start by listing your needs then look to match the solution that best meets those needs. Regardless of what you ultimately choose to do…leveraging your data is crucial to remain competitive and grow your business profitably.
Thoughts
What do you want from your information?
Would it be helpful to understand WHY something happened so you can stop or repeat as required?
Do you need a more predictive tool to help forecast / improve outcomes?
About Mirus:
Mirus is a multi-unit restaurant reporting, analytic and predictive software solution set used by operations, finance, IT, and marketing to gain deeper insights into the business.
For more information, please visit:www.mirus.com
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