Strategic CIO // IT Strategy
Commentary
6/11/2014
09:35 AM
David Wagner
David Wagner
Commentary
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Restaurants' Switch To Tablets Is Trouble

Tablets and self-service are the next big thing in restaurants. But is it a good idea?

Casual dining restaurants, including Chili's and Applebee's, will be rolling out new self-service kiosks using tablets in the next few months. The tablets will allow customers to order food, call their servers, and pay their checks without needing to interact with a human.

Preliminary tests show that such kiosks will improve revenue and table turnover while increasing customer satisfaction. But past experience with such kiosks in other industries is mixed, and restaurants should beware. Putting aside that it seems as if all this does is turn table service into fast food, CIOs looking to jump into this technology need to follow some rules to avoid major mistakes.

Before we talk about it, here is a home video of the menus in action:

As you can see, the tablets are interactive menus making use of a lot of images (though no video yet) to entice buyers into appetizers, drinks, and other "upsell" items. In addition, the tablets feature entertainment and a way to pay your bill. And we can only assume advertising will soon be on its way.

Clearly, this will eliminate some customer service problems common in restaurants. Who hasn't been ready to leave, then sat for 10 minutes waiting for the check? Who hasn't needed ketchup or a refill and suddenly the server is AWOL? Splitting checks and even figuring the tip is now easier as well.

And from the point of view of the restaurant there are obvious benefits including quicker turnover, more efficient use of staff (read: layoffs), better inventory management, better kitchen management, easier POS integration into other systems, and increased revenue opportunities via payments for game and ad placement and upselling.

Sounds like a win-win, and we've seen other success stories with kiosks like these, including ATMs and self check-in at airports. Airlines particularly have seen great savings from self check-in, reducing check-in costs to 5% of what they were before self-service.

Except there's a problem. We've also seen self-service that looked like a similar bargain turn out poorly for other industries, especially grocery stores. Self-service check-out in grocery stores is an especially good example, because they more closely resemble the transactions of a restaurant than an airline. An airline check-in is a straightforward, repeatable set of operations: identify guest, identify itinerary, offer upgrades, accept payment for extras, and direct the guest to security or to check bags.

In a grocery setting, the number and type of items is more complex. There are physical objects to be manipulated, coupons to be scanned, and sometimes physical money in the transaction. Similarly, with restaurants, the varying

Next Page

David has been writing on business and technology for over 10 years and was most recently Managing Editor at Enterpriseefficiency.com. Before that he was an Assistant Editor at MIT Sloan Management Review, where he covered a wide range of business topics including IT, ... View Full Bio
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
<<   <   Page 5 / 10   >   >>
David Wagner
50%
50%
David Wagner,
User Rank: Strategist
6/12/2014 | 6:36:15 PM
Re: Love paying this way, hate ordering
@Shane- Once you reduce servers to food runners, it is only a matter of time before you build a conveyor belt, a robot food runner or just ask folks to pick up their own food. 

Also, I assume when you are doing fewer things, it takes less time, so they need fewer of you. 

Funny enough, i keep thinking about the old Automat. How cool would the automat be if you combined it with tablets or mobile phones ?
Susan_Nunziata
50%
50%
Susan_Nunziata,
User Rank: Strategist
6/12/2014 | 6:26:30 PM
Re: Love paying this way, hate ordering
@Shane: true, just as banks sill have a couple of bank tellers during business hours. Still, delivering food doesn't require the kind of people skills that being a water or waitress does. I wonder whether other oportuniteis will open up for entry-level people to learn those skills--or whether the need for human interaction will become so unnecessary in the future that old-school things like "people skills" just won't matter anymore...
Susan_Nunziata
50%
50%
Susan_Nunziata,
User Rank: Strategist
6/12/2014 | 6:22:48 PM
Re: Love paying this way, hate ordering
@Dave: Expansion and contraction in labor markets is indeed a constant. To your point, it's a matter of luck, education, and being in the right place with the right skills at the right time. What do you think the "skills of the future" will be?
Shane M. O'Neill
50%
50%
Shane M. O'Neill,
User Rank: Author
6/12/2014 | 2:44:09 PM
Re: Love paying this way, hate ordering
I hear you @Susan. The collateral damage will be unpleasant to say the least. But restaurants will still need servers to bring the food orders to tables and do other tasks. So I assume the role will be diminished, but not eliminated. 
David Wagner
50%
50%
David Wagner,
User Rank: Strategist
6/12/2014 | 2:41:07 PM
Re: Love paying this way, hate ordering
@Susan- There's no doubt that you are right that the widening skills gap is a real problem. And it is a systemic one that requires reworking education, training, hiring, and countless other things. At the same time, the sky has been falling on that front for a long time. There are movies (like Katharine Hepburn's Desk Set) complaining about this problem for a couple of generations.

I can't figure out if the sky isn't falling or if it is falling really slowly. I guess it depends on how lucky you are with your education.
Susan_Nunziata
50%
50%
Susan_Nunziata,
User Rank: Strategist
6/12/2014 | 2:17:27 PM
Re: Moving toward a self-service world
@Dave:  I like the Amazon analogy for self-service IT. Though, perhaps we can employ all those out-of-work waitstaff to deliver the IT hardware immediately to people's desks once restaurant ordering becomes completely self-service.

Interesting, though, the same concern about jobs applies whether talking about self-service in IT or in restaurants and retail: 

The one thing i wonder about is if we automate too many of the low level support jobs in IT whether it will become a problem for IT pros. Those are usually people's first jobs and it helps them get their feet wet in a company-facing role. 
Susan_Nunziata
100%
0%
Susan_Nunziata,
User Rank: Strategist
6/12/2014 | 2:11:03 PM
Re: Love paying this way, hate ordering
@Dave: That's the thing, if jobs are created in the back office as a result of using these technologies in the front of the house, then those will be very different jobs requiring very different skill sets. They may not be the jobs that college kids can turn to, for example, to pay their way thru school. Or jobs that peolple who can't make it to college at all will ever be considered for.

I fear the widening skills gap will only get work as technology cotinues to advance. But because we're in such a state of transition right now, I wouldn't even know what to advise young students about where to put their energies when planning for their futures.
David Wagner
50%
50%
David Wagner,
User Rank: Strategist
6/12/2014 | 1:57:42 PM
Re: Restaurants' Switch To Tablets Is Trouble
@zerox203- The liquor thing is especially interesitng in some states. California recently passed a law that you can't buy booze in the self-checkout. That certainly shifts quites a few people back to the regular checkout. So much so that our self-checkout lanes are now a ghost town.

In the restaurant business, I suspect you could correct that easily by having the server check IDs when they bring the drinks. You could even have them scan a license as a preliminary step to make sure they are pranking the server.
David Wagner
50%
50%
David Wagner,
User Rank: Strategist
6/12/2014 | 1:54:40 PM
Re: Moving toward a self-service world
What I'm curious to know, though, is how you see this extending into the internal operations of an enterprise. For example, I know many IT organizations are looking to move toward a self-service model for things like buying and provisioning laptops and smartphones, and Intel even has vending machines in its offices where employees can use their ID cards to "purchase" USB sticks, cords, earbuds and other accessories.

Waht is the future of self-service for the IT organization? Will meeting employees' hardware needs ever become as simple as ordering  Chili Cheese Fries from a tablet app?


@Susan- Sounds liek a great article, idea. I might give you a more formal answer in the next few days. In the meantime, my short answer is that I don't think this is the same concept. I think of that more like Amazon style e-commerce. Order something and it arrives at your desk in a few weeks.

Presumably, if tied to a budget and to the right vendor, this could be accomplished relatively easily with IT only being involved in setting up the technology. I see that as freeing the help desk and support staff to work on more important problems rather than a case of getting rid of anyone for the sake of saving on labor. Maybe i underestimate how many people we're talking here. I'll look into it.

The one thing i wonder about is if we automate too many of the low level support jobs in IT whether it will become a problem for IT pros. Those are usually people's first jobs and it helps them get their feet wet in a company-facing role. 
 
zerox203
50%
50%
zerox203,
User Rank: Ninja
6/12/2014 | 1:52:21 PM
Re: Restaurants' Switch To Tablets Is Trouble
You're certainly right to point out that this is a double-edged sword, Dave. Companies sink a huge amount of money into these services up-front, and then end up not making a return on it immediately and therefore not being able to keep up on the maintenance and upgrades. They add all kinds of unnecessary bells and whistles (like the games on these Chili's kiosks), while missing seemingly obvious problems (bad handling of restricted items IE liquor... didn't they know they sold these items all along?) Like you say, it's a little puzzling what simple lessons we can't seem to learn in ten years.

Some of these can be solved by better practices, and some of them seem to be the price of doing business with self-service. Either way, companies should factor them into their budgets and plans before diving in headfirst, not after. If it costs you $1,000 to set up a self-service station, you can't think of that as a flat cost - you have to factor in the costs of service, repair, upgrades, and more. You have to account for the possibility of needing to replace it sooner than you expect - and if you need to justify that cost, do it with the longterm ROI you earn day in and day out, not the money it's going to save you by terminating employees on day 1.
<<   <   Page 5 / 10   >   >>
Transformative CIOs Organize for Success
Transformative CIOs Organize for Success
Trying to meet today’s business technology needs with yesterday’s IT organizational structure is like driving a Model T at the Indy 500. Time for a reset.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest September 18, 2014
Enterprise social network success starts and ends with integration. Here's how to finally make collaboration click.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.