Content area
Full Text
Advances in information technology (IT) have radically altered the way many industries conduct their business. Retailing and banking are examples of businesses that have made substantial use of IT to reengineer their operations. Consider how bank ATM machines have dramatically changed the nature of the financial services industry. Note also how retailers are redefining their supply chain by setting up sophisticated information networks that instantaneously record what customers are buying-allowing retailers to establish "just-intime" inventory for each store. For all the innovations possible with IT, however, the commercial restaurant business has seemingly been slow to adopt the most current information technology. Technology has typically been viewed as an additional cost of doing business, rather than an investment in future profitability. Increased costs are avoided in an industry characterized by small profit margins. Only in the past ten years has the industry consolidated enough to produce companies with appropriate planning horizons and resources available for substantial investment in technology.
To encourage adoption of valueadding information technology in the restaurant business, we outline in this article a framework for an integrated approach to systems planning. We also provide a decision model that is intended to assist chain-restaurant operators in evaluating investments in informationtechnology systems. We consider this article to be only a preliminary step, but a necessary one, toward reducing the confusion regarding information technology in the restaurant industry.
While much of the material underlying this article is from existing sources (i.e., academic journals and practitioners' resources), we contacted several chain-restaurant companies in hopes of creating a mini case study. Unfortunately, we could find no company that could demonstrate successful development of comprehensive and integrated applications of information technology. In lieu of those interviews, we discussed our framework with Cornell Professor Sheryl Kimes, who shared the results of her research on restaurant revenue management, and with two current Cornell Ph.D. candidates, Liz Ngonzi and Deborah Barrish, both of whom have direct industry experience.1
Historical Approaches to IT Development
Although we have asserted that restaurants' IT adoption has been slow, that does not mean restaurants are bereft of technology. Instead, restaurants initially focused on cutting costs (as did other hospitality firms) by automating their backoffice functions, including payroll, accounting, and inventory systems. Part of the difficulty that...