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Eurhotec 2001
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Maximizing technology in foodservice operations: the system selection process

Mark Hamilton, Director of the Technology Research & Education Center and Director of Information Technology at the University of Houston's Conrad N. Hilton College of Hotel and Restaurant Management.

© DigitalVision
The average point-of sale system costs anywhere between $15,000 and $35,000 to implement. If only 10% of this system's capabilities is exploited (a classic situation), you are using between $1,500 and $3,500 of your total investment. This is close to the functionality and cost of implenting a simple electronic cash register system. System selection therefore represents a significant investment and the result will affect almost every area of the restaurant operation.

Points to consider
Put together a "Systems Team"
Assemble a group of people from different areas of the organization to work together throughout the selection and implementation process. Size is immaterial - everyone on the team will be involved with the system and has the potential to provide input. It should include representatives from management, kitchen operations, services, accounting.

Collect Sales Information
Contact system vendors and request sales information on the systems that they provide. You could obtain lists from the your national restaurant association, The Hospitality Financial and Technology Professionals, a hospitality education centre or trade show.

Analyze current information needs
Create a profile of your operation and then put together a "wish list" for your system - characteristics that are absolutely necessary and also "nice to have". This list of attributes will become the frame of reference that you will use to select your system.

Establish System Requirements
Take the above and add to that the optimum configuration for your restaurant. How many terminals and printers will be necessary, types of terminals you would like to have (touchscreen, keyboard interface, etc.), what type of network (stand alone, peer to peer, or distributed processing). This is essential to communicate to vendors and to then eliminate those systems that do not meet your requirements.

Write an Request for Proposal (RFP)
This is the most important aspect of the purchase and selection process. It defines your system requirements, and the guidelines of the selection process for prospective vendors. Include -
w Property Profile

A description of your operation that communicates to vendors specifics about your restaurant, eg. Name and address(s), number of outlets, organizational structure, growth plans for the next 3-5 years, style of service, operating hours, number of seats and average number of covers per day, menu concept, staffing parameters.
w Parameters of the selection process

Establish the "rules of the game" - how you will carry-out the purchase process, for example, selection process timeline, acceptable format for responses, how responses will be evaluated and vendors notified.
w List all your system requirements as indicated above and detail the minimum specifications of an acceptable system. This section should be formatted in such a way that vendors can easily respond, indicating that they can compare one system to another, as below (1).

Obtain Vendor Information
Request information to ensure that the vendor will be around to support you through the implementation process and beyond, for example, audited financial statements, list of current users, business references, company history, resumes of company management, and organizational structure, and product line. It is important that you are certain that the company is a viable business. Refusal to provide any of this information should remove the company from contention immediately.

Request Program Documentation
Obtain as much system documentation as possible for system evaluation purposes. Important documents to review include: user manuals, training materials, hardware documentation, sample system design layouts, sample reports, and data element definitions. These will assist in evaluating the vendor's attention to detail and the completeness of the documentation and materials used in supporting and training the system.

List System and Service Costs
Indicate the cost of each system component in your specification, broken down by item. It should also include any payment or lease options as well as fees for software customization and support contract options.
As much as possible, standardize the format for vendor responses so that you can to establish a scoring system and criteria to evaluate proposals objectively.

Evaluate Vendor Responses
Using the above, have each member of the project team evaluate each proposal. Combine the results and marrow the field to 2 or 3 vendors. The respond to all vendors relaying their status in the selection process.

Visit "Live" Sites
Using the references supplied by the vendors, schedule a site visit to one or more sites that are using the system in question. Take along a list of questions to ask the operator regarding the system and the vendor's performance.

Conduct Scripted Demonstrations
It is more important that you observe how a system will work in your environment rather than in a canned demonstration. A scripted demonstration allows you to see exactly what you want rather than what the sales person wants you to see. Provide the vendor with a sample of your menu and construct a series of transactions that you would likke to see, highlighting those that are frequent and particular to your operation. The entire project team should observe and rate each system's performance.
Once you have seen what you want, move on to the next item and/or demonstration. Use the same script and basic time limits for each demonstration to bring additional objectivity.
If it is determined that modifications to the system are necessary to fulfill your requirements, document what the vendor promises to do and ensure that it is done before you take delivery of the system to eliminate 'vaporware'.

Negotiate Contract and Payment Trems
Key questions to ask-
1- What is the hardware and software manufacturers warranty? The vendor warranty should be at least this long without significant charges.
2- Can a copy of the program source code be placed in escrow in the event of a catastrophe on the part of the vendor?
3- What is the restaurant responsible for related to the installation of the system hardware?
4- In the event of hardware failure, what is the minimum response time for repair?
5- Is there a user group established for the software product?
6- How can program "bugs" or recommendations be presented to the software manufacturer.

The following should be addressed regarding support:
1- Does software support include upgrades? If not, what is the charge for upgrades?
2- What are the hours of the support help-line? Is the help-line open when you are liable to need support (nights and weekends)?
3- How is support time billed? How are fractions of hours billed?
4- Is there an additional charge for support that requires a site visit?

Negotiate a payment schedule. The following is typical:
w 25% when the purchase contract is signed
w 25% at installation
w 25% when the system becomes operational
w 25% when you finally accept the system as complete

The Center For Foodservice Education suggests that you negotiate hard to pay a large share of the contract amount at final acceptance ­ as defined and understood by both parties and be part of the purchase agreement. Even if you purchase the system under a lease arrangement, you can instruct the leasing company to release portions of the proceeds contingent upon certain criteria being met. This will give the vendor plenty of incentive to get the system up and running quickly, your people trained and you happy.
If there is one key to a successful system selection and purchase process, it is to be organized. The more organization there is, the more control you can exert over the process. The more control you have, the more you can be certain that you get what you want from a system. All of this works together to help you to maximize your technology investment.

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L'HÔTELLERIE Eurhotec Special Issue 8 February 2001