Sharing insights into the world of Restaurant POS
A couple of years back, my oldest daughter and I were hiking up to the top of Mount Elbert (14,433ft), Colorado’s highest peak, when I was amazed to see a mountain biker coming down the trail! I spoke to him briefly and realized he was just a few years younger than me and that his bike was about the same as mine. I started thinking, I CAN DO THIS! I can bike to the top of Colorado! Fast-forward nine months: after losing a few pounds and getting my bike tuned, I started training at Deer Creek park, just outside of Denver, on a rather gnarly bike trail. I was battling a trail up a ravine when I hit a boulder that stopped me in my tracks; then, since my feet were locked in my clip-less pedals, I starting falling to the right, down into the ravine!
Fortunately for me (and this blog), the Good Lord put a willow bush there to catch me. Twenty minutes later, after extricating myself from the willow and realizing I was still in one piece, I trudged on, only to suffer a similar fate ten minutes later. But this time, instead of a willow bush, my landing zone was a pile of rocks. Instead of a couple of willow scratches, I considered myself lucky to only have a couple of bloody scrapes and a number of bruises. But my day was done, and I realized that making it to the top of a mountain on a mountain bike was going to be VERY HARD. I share this story because to tell you the truth, POS Integration can be quite similar to my “Biking to the Top” experience; you think it isn’t going to be that hard, and then once you try to make it happen, reality sets in! This is particularly true on the BUSINESS side of POS Integration. The technical side can be challenging as well, but believe me, the business side can cause a tremendous amount of hair pulling.
I’ll start out this discussion by delving into Aloha, Micros, and then Positouch. Over the years, that’s whom I have worked with the most due to their dominating position in the market. I’ll also briefly touch on Digital Dining, Dinerware, Aldelo, Posera Maitre’d, and Expient.
Let’s talk about Aloha. Obviously, it is a big gorrila in Restaurant POS. If you are a third party integrator with the next great idea for connecting to restaurants, then you need to integrate with Aloha! Having been a Aloha POS Integration business partner for about a decade, I have received hundreds of calls asking about how to make an integration with Aloha happen. Historically, Aloha has made it very difficult for anybody to integrate with its system. Technically speaking, Aloha has several integration points built in, allowing third party integrators a great deal of personal flexibility, so long as Aloha approves the integrations. In my opinion, corporately, Aloha has a very closed business philosophy making Aloha protective of their customer relationships and having no interest in sharing them with anybody—including third party developers. Aloha wants its vast cash flow generator to be for its stockholders and their dealers. Therefore, it’s almost impossible to create a true “partnership” with Aloha. Third parties such as Gift, Loyalty, Reporting, Ecommerce, and Mobile Payment providers are viewed as competitors to Aloha’s own offerings, discouraging any relationship between companies. Consequently, getting traction with Aloha can be very difficult.
How do you reach a decision-maker at Aloha? The Aloha dealers will typically try to put you in contact with a “Partnerships” person at Aloha. In my opinion, the Partnerships person has a tough job at – they spend almost all their time saying “NO!” to people. Most of the time, when someone contacts Aloha Corporate about third party integration, they just blow you off and continue to blow you off until you either give up or you give them a reason to listen to you. What’s a good reason? Well, the angles I suggest typically revolve proving your business model using some POS other than Aloha! If you can get traction outside of Aloha restaurants, then when you talk with Aloha, you are more likely to look like you have your act together and they might be more inclined to give you the time of day. Another approach is to bring a significant Aloha customer to the table with you, one that’s willing to go to battle for you. I typically suggest a “Big Gorrila” but I don’t think it always has to be that way. It may only need to be a customer with some “influence” in the Aloha world; however, remember that since Aloha is in over 100,000+ restaurants, any one restaurant will typically not be enough to persuade Aloha to listen. In one case I know, the threat of legal action got the necessary cooperation, but who wants to write six figure checks to lawyers each month?
So now that you have gotten Aloha’s attention, what typically can you get out of them? Assuming you are a third party solution provider, you want to connect your product to Aloha. How is that done? Can you have Aloha do the work for you? LOL! I have never heard of Aloha doing something like that. Besides, the issue with Aloha is that they have 7000+ requests for changes to their software. If they do add a feature, it takes at least eighteen months to make it happen! Unlike Micros, Aloha doesn’t offer professional services, so your only option is to purchase an Aloha Software Development Toolkit (SDK) so that you can hire some software developers to link your solution/product package to Aloha’s. This is where the costs come in. For years, IF Aloha is willing to sell it to you, the SDK costs $25K. Besides the SDK, you will need to buy an Aloha system for development. BUT, besides these initial costs, Aloha charges a “per site” license fee called “Aloha Connect.” Aloha Connect is a feature of the Aloha software that enables third party packages to talk with Aloha. Aloha dealers sell this for $800 to $1000 a location, and most Aloha restaurants DO NOT have this feature turned on. So if your business model can’t absorb these costs, you probably need to rethink your business model!
Of course, there are other ways of extracting data out of Aloha without requiring an SDK or Aloha Connect license, but there’s NO WAY to push data INTO Aloha without a connect license. So if you are trying either to push items or payments onto a check, then there’s no way of doing it without Aloha Connect.
Another cost is annual support. Your developers will need this to deal with development and support issues for your integration. It’s important to know that Aloha dealers can provide you with VERY LITTLE support for Aloha Connect integration problems. Most have no experience in this area. If you want dealers to be your installation/technical partners, you will have to train them on all the specifics of your product.
If you do get to the point of an agreement, don’t expect a “partnership” agreement from Aloha, but rather a highly restrictive license agreement that limits your ability to utilize the SDK for purposes other than what you have specified. Aloha controls the relationship; therefore, it will never be a partnership!
Also, don’t be surprised if after six months of talking to Aloha about an agreement you still haven’t seen one. Delay after delay in the Aloha legal department is typical.
Once you have FINALLY obtained the SDK and your Aloha System (congratulations!), you can start development. I have lots of thoughts to share on this, the technical side; that will be in the next blog posting.
Let’s talk about Micros, the other big gorrila in Restaurant POS. If your business model is something that requires POS integration and you are thinking about Aloha, you should be thinking about Micros as well. Micros can be tough to engage, but they are much easier than Aloha. Over the years I have been involved with different efforts where people were able to partner with Micros. It seems that if you have a competent and experienced team and a strategy that properly targets Micros’ clientele, then Micros Corporate may listen to you and actually even help you! However, from a business perspective, Micros is extremely daunting because unlike Aloha, which has one POS product to integrate with, Micros has four platforms, all of which require different integrations!
The Micros 3700/RES 3000 product has been around for a long time in restaurants in large-scale use around the world; but Micros also sells the newer E7 platform in restaurants and I am frequently asked about its integration functions. Micros’ 9700 platform is used in Hospitality applications (Hotels, Cruise Ships, Casinos, etc.). The 9700 platform appears to be technically similar to the 3700 platform, but from a business perspective I encourage you to think of it as separate from the 3700 platform. Finally, there is the 8700 platform, which has recently been replaced with the 9700 platform. Although Micros no longer sells the 8700 system, it’s still a popular Hospitality System. If hotel restaurants are important targets, you may need to develop your solution on both platforms, creating versions of your solution for both the 3700 and 9700 platforms. And, don’t be surprised if you find yourself pondering whether to develop for the 8700 platform to capture one key customer! The E7 platform is problematic from a third party integration perspective considering that the official word from Micros is that there is NOT an SDK available to third party development on that platform, due to technical constraints. To make matters even more complicated, the 3700 platform has FOUR (4) different methods of performing integration, each requiring different integration methods or licenses!
All these different interfacing methods can create a perplexing business / technical problem. In about half the integration requests that come our way, the required functionality is not available in any one interface, which means that two interfaces need to be implemented. And this isn’t always obvious when the project is started; it may take some time and development to understand how the various interactions need to occur and what options are really available. To add to the confusion are the licensing costs and choices. Even if you make the right choice in completing the integration, getting the licensing setup at location can be surprising difficult. That’s because the each integration method has a different licensing technique and it seems that almost every time the dealers are not able to get the licensing right the first time, even when they have been given the proper Micros Licensing part number to order! It seems that somebody either in the dealer office or from corporate will suggest a “better” way of doing licensing, setting up their recommendation, seemingly ignoring the requests of their customers. I see this especially with the 3700 Platform “RES POS” APIs (of which there are two flavors of licensing). Of course, Micros charges roughly $800 to $1000 per site license for each integration as well; so if you are forced to use two, the cost may well be $2000 per store in license fees that somebody has to pay to Micros just to “enable” your interface to work! Beside the site license fees, some of the SDKs will cost you as well – the 3700 “RES POS” SDK seems to run about $15K. And then you’ll need to purchase annual support as well. So making the wrong choices about which integration method to utilize can be quite costly and time consuming.
What most of the startups that I work with have a hard time understanding is that Restaurant POS systems are black boxes, all built differently, and all with different integration points; there will be hazards on almost every road, but even in the best of circumstances you often can’t see them until you get around the next bend. So I say, expect some bumps (or even some landslides) on the road.
When it comes to getting the actual integration work done, Micros does offer Professional Services that can assist you. Also, Micros Dealers are typically far more capable then their Aloha counterparts in developing integrations and add-ons since many dealers can create what are called “SIMs” (I’ll discuss these in a future blog as well).
Technically, you really don’t have to engage Micros Corporate prior to creating your product if you don’t want to. There are third party developers that can perform the integration for you, and they don’t need to get a rubber stamp from Micros Corporate before proceeding.
Now let’s turn to Positouch. My experience with Positouch, from the business side for POS Integration, is that, as a smaller company, Positouch is much easier to work with than either Micros or Aloha. There are fewer layers of organization and Positouch is willing to work with most anybody. That attitude seems to percolate down to their dealers as well. I believe Positouch sees the value of your POS needs and requests. Thus, they will install their software with the necessary SDKs on a PC you provide, to assist you in the future. This proactive policy is really VERY helpful! The question is, can you accomplish what you need to with your integration on their platform? I have to say that the Positouch Integration points are more limiting than Aloha and Micros, but that isn’t to say they don’t get the job done. Like Aloha and Micros, POS Integration with Positouch can get technically challenging, but lots of integrations have been completed. Because so many integrations have been completed, Positouch dealers can be quite helpful in addressing technical issues regarding configuration. However, you will still need your own team of developers to get the work done. Like Aloha and Micros, Positouch does require license fees for the interface licenses, but unlike Aloha/Micros, it seems that many customers already have them.
Now, here is a brief breakdown of some remaining, aforementioned POS technologies:
Digital Dining: Like Aloha, Micros, and Positouch, Digital Dining is another POS where we have seen requests for integration over the years. It’s not obvious that they support third party integration, but they do have interfaces that allow you to extract data from the POS as well as an external Order Placement Interface (which I helped them develop).
Dinerware: Unlike the manufacturers previously discussed, Dinerware encourages third party integration. Just go to their homepage and you’ll see the tab for “Developers” right there. It’s easy to engage with Dinerware and our experience has shown their willingness to work with you to help your team get the information you need so that you can complete your product integration.
Posera Maitre’d: This Canadian POS manufacturer has provides SDKs for third party integration for some time now. Our experience in trying to provide Online Ordering integration has been difficult, as the interfaces always seemed to be in flux and fairly complicated to use.
Adelo: This is another POS manufacturer that makes it known on its website that it has a collection of available SDKs that support a wide variety of integrations.
Xpient: This POS manufacturer also boasts a well-defined SDK that is available to third parties.
Let me conclude this blog entry for now by stating what should be pretty obvious – the business side of POS Integration is a big challenge. Since every POS manufacturer has different philosophies about POS integration and (as we will find out in the future blog posts) different technical approaches to integration, connecting all these solutions together requires a large capital investment. The bigger problem the POS industry needs to focus on surrounds the idea of providing customers with a mechanism that accommodates and encourages independent innovation, thus allowing restaurants and retailers more customization regarding their specific business transaction needs. Though I have some suggestions for how POS technology can improve, that discussion is for another time. . .
For my next blog post, I’ll delve into the technical side of POS integration.
A few days ago, my wife and I took a drive on the “Peak to Peak” highway, which runs along the Rocky Mountains outside of Denver. One of my favorite stops along this route is the Sundance Café just outside of Nederland. While the food is certainly not spectacular, the views certainly are! I love to take out-of-state guests here so we can sit on the patio, sip some beers, and watch the sun set over the 13,000ft summits of the Indian Peaks Range on clear, Colorado days. On this occasion, after imbibing Twisted Pines’ Amber Ale (my wife had the Twisted Pine Cream Stout which she loves), we got our bill. A handwritten bill! Being a POS Integration Guy, I always scan the check to see which POS is used. So when I see a handwritten check, I’m thinking thoughts like: Why don’t you have a POS? Don’t you realize what these systems can do for you; such as track labor, inventory, and of course, your sales?!? Then I start thinking about the question I am so frequently asked:
WHAT IS THE BEST POS?
Restaurants of all sizes have asked me that, as well as many third party integrators. I am flattered people want my opinion; I suppose they think that due to my integration experience with multiple POS platforms, I have some “inside” knowledge and strong, personal opinions regarding currently available POS systems. And, while I certainly do possess deep knowledge and I certainly do have strong personal opinions about various POS platforms (which will all be honestly revealed and shared on this blog), it is difficult to crown any one of the current POS systems as “the best” considering the extreme variability between each platform and every restaurant’s unique needs. Therefore, since the “perfect” POS model does not yet exist, the POS selection process becomes exceedingly important as each restaurant must select a POS platform best suited to their needs.
When selecting a POS, it’s mostly about the restaurant business’s requirements; but, it’s also about relationships (between you and your POS dealer/manufacturer) and your appetite for managing technology. Let’s talk about the requirements’ side first.
When it comes to business requirements, the restaurateur needs to think deeply about how they want to run their business and how technology can best benefit their business. A memorable restaurant blends together an intriguing mix of food, entertainment, and an atmosphere that achieves a very specific vision and ambiance for the patron to enjoy; technology can aid or detract from many aspects of the total patron experience. Some questions are very basic, such as: “What is the basic format of the dining experience?” and “Will the menu be essentially static or frequently changing?” Other, more developed questions are: “Is the menu conducive to takeout and delivery? If so, will these options be made available to the patron and how?” Updated technology and POS systems can also answer questions regarding labor control and kitchen interaction with the Front of House staff.
Regarding the question of restaurant POS “format,” I use some specific terms: “Post-Ring,” “Pre-Ring,” and “Multi-Round.”
A “Post-Ring” format is one where the patron’s food order is made prior to the order being entered into the POS system. This is typically the simplest POS system environment; no kitchen display or printers are needed, and there is only one interaction (typically very simple) with the patron and the POS. In this environment, minimal order details are put into the POS; it’s common to enter in only the item itself and any extra cost choices (Turkey Sandwich, add Bacon) and to process the payment. In the “Post-Ring” environment, POS requirements typically revolve around making the transaction as simple and quick as possible with the patron, making this format unsuitable for detailed inventory or sales tracking. The bottom line is that if you like having lots of different metrics available from the POS, a “Post-Ring” approach may not be your best choice. However, both Subway and Chipotle utilize Post-Ring solutions, so this type of POS should not be considered a limiting factor in a business’s potential growth. Also, since a “Post-Ring” system often consists of a single POS station with attached receipt printer and cash drawer, it is usually the cheapest way to get a POS up and running and it’s the easiest format to program.
A “Pre-Ring” format is where the patron’s order is placed into the POS prior to the food being prepared. In these scenarios, the patron is typically standing at the front of a line talking to an order taker (cashier) at the ordering counter; the cashier is entering the order into the POS as the customer is verbally placing the order one item at a time. In a “Pre-Ring” environment, the order taking process is usually highly detailed, with all order detail being captured by the order taker into the POS. The order may be displayed on a patron-facing display, assuring the patron their order is correct. The order is sent to the kitchen via kitchen printers or video systems for preparation, typically once the customer has identified how the food is to be packaged (Order Mode: Dine-In, To-Go, etc.); but sometimes, the order is sent to the kitchen as it is being ordered, expediting preparation. The patron pays for the order immediately after selecting the Order Mode and prior to the patron typically receiving any part of the order. The POS terminal is equipped with a cash drawer and a receipt printer; as previously mentioned, the system may well include a wide variety of kitchen video/printing solutions. “Pre-Ring” systems are great from a metrics viewpoint; with this model you can marry sales metrics to kitchen/labor performance statistics providing a comprehensive picture of the operation’s performance. A typical “Pre-Ring” solution should allow the restaurateur to highly customize the process flow on the POS terminal to meet specific needs. With “Post-Ring” environments, there’s a greater richness in interaction variety regarding the patron, including Line Buster applications, Drive-Thru, Self Service Kiosk, Online Ordering, Order Status Boards, and even Paging Systems. From a cost perspective, expect a “Pre-Ring” solution to be more expensive then a Post-Ring format, but more rich in its functionality.
The “Multi-Round” format is designed for classic “Table Service” environments where the patron is seated at a table (or the bar), and a waiter/waitress take a series of orders from each party throughout the dining experience. POS Terminals are typically placed throughout the facility. In this format, each POS terminal may be used by several wait staff at one time; one wait staff logs in, adds an item or two to the patron’s order, then logs off; the POS is responsible for “routing” the order details to different stations at the kitchen or bar. Like the “Pre-Ring” model, “Multi-Round” POS system are typically integrated with Kitchen Video/Printing solutions that are placed at various prep stations throughout the kitchen. Unlike “Pre-Ring” and “Post-Ring” formats, the “Multi-Round” POS format helps the wait staff manage multiple orders for patrons sitting at tables in different states of the dining process. In the “Pre-Ring”/”Post-Ring” format, the life of the check/transaction on the POS is measured in seconds or sometimes a few minutes, and typically only one check is being actively managed on the POS terminal at a time; in the “Multi-Round” format, the check/transaction is “alive on the POS” for as long as the patron is sitting at the table, perhaps even longer, and each wait staff member may be managing 4 to 6 tables at a time. From a metrics viewpoint, a “Multi-Round” format provides a comprehensive set of data that tracks the entire dining experience. Similar to “Pre-Ring,” numerous patron interactions abound, including reservation, wait list, online ordering, delivery systems, self service kiosk, as well as shared wait staff/patron ordering solutions residing on kiosks and of course, mobile payment solutions. The Cost of a “Multi-Round” POS should be roughly comparable to the “Pre-Ring” POS, at least on a per terminal basis, and kitchen system costs should be similar as well.
Now, let’s switch gears and talk about “relationships” and POS choice. By “relationships,” I mean to discuss how the restaurateur hopes to interact with their POS dealer over the long term. When it comes to POS management, are you a DIY person or a delegator? Do you want to be able to manage significant menu changes on your own or do you want the dealer to do it? This is an area you have to analyze carefully, as not all POS systems are alike in this area. My experience is that some of the newer, market POS solutions are much more DIY oriented. And, even though they are typically unable to offer as rich a feature set as the more established POS providers, they can save you from having to deal with INCREDIBLY COMPLICATED configurations that require you to rely on the dealer to make any changes.
I like to think I know both Aloha and Micros pretty well, but I sometimes wonder how I can waste so much time trying to locate a stupid switch that is necessary to turn on/off a feature! However, if the POS dealer is really service and customer service focused, then does that matter? Some established POS manufacturers compliment their solutions with a dealer network that really has their act together whereas with others, it’s really “hit and miss.” The question is, do you want a dealer that’s only in it for the “transaction,” or would you like a relationship with a dealer that will be there for all your future needs? The cost of the former will most likely be less than the latter, but the latter can be agonizingly expensive over the long term as you may get “locked in” to the only dealer in your market.
Another question: do you want to make calls to only one phone number for all your technology issues, or are you committed to using the “Best of Breed” solutions? We all like the “one call does it all approach,” but what if your online ordering needs or your patron interaction systems are unique and extremely important to your brand? If you need “Best of Breed,” then POS Integration Capability becomes an important question for you to consider prior to buying a POS. That’s the topic for my next blog entry.