Gone are the days of Excel spreadsheets and paper forms. Efficiencies need to be gained, margins tightened and bottom lines improved, and that simply can't be done with overflowing boxes of invoices and hastily thrown-together checklists. Elly Earls finds out why online management tools, designed to streamline everything from recipe costings to queue control, are the answer
The retail world has pretty much got it figured out: you order a bottle of cider in a pub, the barman presses the bottle-of-cider icon on his point of sale (PoS) till and not only is he informed of the price of the item, a replacement bottle is automatically ordered. It doesn't need to be manually entered into a spreadsheet; indeed, no one needs to think about it at all. The data is captured instantly and a decision can be made accordingly.
When it comes to contract catering, however, things aren't quite as up-to-date. "There's still a legacy of the old management-at-cost thinking," says Tim Cookson, chairman of the Litmus Partnership. That is to say that contract caterers have traditionally tended to wait until the month end to see how they've done over that month, and some are still reluctant to move away from that model. "On the third week of July, you're finding out what happened on 1 June; it's all done reactively."
Having said that, things are undoubtedly changing. "Contract caterers are under pressure and they've got to make more margin for their customers, so they're becoming more aware of the need to adapt to retail thinking," Cookson explains. "Part of that is capturing information instantly."
Foodservice Consultants Society International (FCSI) consultant Julian Fris, managing director and principal consultant at Neller Davies, agrees. "They've got to watch every penny, and online systems are providing that support for them," he says.
But there's little point in investing in one or two state-of-the-art tills or installing a couple of bits of online technology; contract caterers looking to gain the competitive edge need to go all the way. "It's all or nothing," Cookson believes.
Fortunately, there are online catering management software packages out there that are not only completely comprehensive, they're also dynamic. "E-procurement systems, for example, are like Tesco Online: you're adding up the value of your trolley as you're ordering," Cookson explains. "So you've got managers knowing how much they're spending, their PoS till is telling them how much they're selling, and their back-office stock system is informing them of how much they've got on their storeroom shelf. They're no longer waiting until 21 July to find out what happened on 1 June."
For Scott Brown, business development executive at Fretwell-Downing Hospitality, which offers a catering software called Saffron, it's the dynamic nature of the system that is really getting contract caterers excited. "All the prices within the system come through at the latest invoice price, which means that everything coming in from suppliers at invoice price can be measured automatically in the system against the agreed catalogue price. You can imagine how much money that could potentially save a contract caterer. And pennies saved on invoicing and purchasing can make a huge difference."
Indeed, it's the minutiae which can really make a difference to contract caterers' bottom lines. "It's the point-one of a penny or the 10.2oz rather than 10oz," Cookson remarks. "But when you're dealing with big numbers, they end up being big numbers."
"They're still using Excel spreadsheets and paper forms, but they could improve their profitability so much more by using an online system," he emphasises.
Many online management systems can automatically update absolutely everything. For example, if the price of a certain ingredient, such as beef mince, goes up, every recipe in the system that contains beef mince will be adjusted accordingly.
Software can also offer ingredient replacement functionality. One of the main challenges contract caterers face when it comes to purchasing is how to rationalise their recipes, according to Brown, but by analysing usage clients can see the purchasing advantage of chefs at different sites using the same ingredients. "The real benefit is consistency of purchasing," he notes. "That's where the real savings are when you look at it from the centre."
But back-office operations are only the beginning. Online software is increasingly being used to improve the customer experience, too. As well as using online tools for pre-ordering and instant feedback, some of the larger contract caterers are using "queue cams", which can be viewed online.
"First of all, the customer can see when to get up from their desk to get their sandwich, but more importantly staff can be moved around proactively rather than reactively, and this comes back to improving contract caterers' margins," Cookson remarks.
It's important to remember, however, that these customer-facing tools are not just gimmicks; they should only be used if they are improving the efficiency of the business. "It's about how people use that instant information to drive better margins," Cookson confirms, and this philosophy can equally be applied to back-office processes.
"We're looking at how we can improve food presentation to make it more saleable as another way of enticing people through the tills, and by using online systems you have the information to prove that it's going to benefit the customers and the business," Fris says.Wendy Bartlett, CEO of independent caterer Bartlett Mitchell, agrees. "You need to use these tools to improve your business, not just to know about it."
Going green: an extra advantage of online tools
Eâ'procurement service Epsys, produced by Acquire Services, is purpose-built as a single integrated system to effectively manage a supply chain - from relaying supply catalogues to order processing - incorporated within a finance control and accounting system.
According to Kate Windebank, systems operations director at Acquire Services, the benefits of the system are wide-ranging. "It has the ability to cover all types of purchasing. Literally everything involved in the operation can go through the system," she says. "And in terms of looking at overall performance, it's invaluable. Moreover, as it's internet-based, any directors and divisional managers can access that information from wherever they've got an internet access point.
"Contract caterers can also do dynamic stock evaluation at the current system price for those products. Previously, they would have had reams of spreadsheets and it would have been impossible. A lot of our clients have 30,000 different products."
Epsys, and other similar systems, also have the advantage of needing absolutely no capital outlay for installation, as well as having a potentially significant impact on a contract caterer's environmental performance. "This seems to be coming up more often as a theme," Windebank notes. "Clients can see a huge reduction in terms of paper."
Joint venture: working together to create better software
For Wendy Bartlett, CEO of independent caterer Bartlett Mitchell, the real benefit of using IndiCater's management software solution, is that she can manage her business in real time.
"Our profit and loss system is very real-time. If your price goes up 5%, you haven't adjusted it and you sell 100 portions, that's a lot of money to lose," she explains.
Another key advantage of IndiCater's solution is its flexibility: Bartlett is able to suggest tools to IndiCater CEO Mike Day, whose team will then tailor the software to suit her needs. Indeed, the company, which has been operating since 2000, has evolved completely based on client requests.
One example of this is the Outlet Monitoring Tool, thought up by Bartlett. "It enables us to track and monitor standards compliance by our managers and identify outlets that need additional support before problems develop," she says. "This has kept our attrition rate low and therefore impacted our bottom line."
The next project that Bartlett and Day are working on is known as Virtual Deli. A simple tool enabling clients at the deli bar to order in advance and avoid queues could have a huge impact on profitability. "The less time there is queuing, the more money the caterer is going to take, the better their bottom line is," Day explains.
Child's play: the importance of interactivity
An entirely web-based software solution, Live Kitchen, which represents a new way to manage junior school catering, was developed with the customer - the pupil - in mind.
The system's "from home or classroom" pre-ordering system means children can choose exactly what they want to eat, rather than having what is left over on the hotplate.
And not only do the pupils love the interactivity of the system, but there are several features of Live Kitchen that make life much easier for both parents and staff. For example, parents pay for the meals retrospectively by direct debit, making cash collection a breeze.
"Parents don't have to pay half a term in advance and the school administrators don't have to deal with banking money, something which is always a big bugbear in schools," says FCSI consultant Andrew Etherington.
"The system doesn't bump up meal prices either; it's a real win-win. I'm sure other caterers will soon be developing similar systems."
The human touch: the system is only as good as the operator
Saffron catering software, developed by Fretwell-Downing Hospitality, is a modular system that can be tailored precisely to each contract caterer's requirements. "Some units might be doing basic book work capture while others could be doing line-by-line stock management or recipe and menu management," says business development executive Scott Brown.
At ISS Food & Hospitality, the software is used to do the company's full weekly trading accounts, and for finance director Freddie Wepener, using this solution has paid dividends. "We've managed to reduce our central expenditure on manual data entry by a considerable amount," he notes. "And a lot of duplication has been eliminated."
But the success of the system hasn't just been down to the software itself; for Wepener, it's equally important that your staff members really get behind any new system introduced. "If people don't understand it, they're not going to embrace it with passion," he explains. "And if they don't believe it's going to save them time, then it won't. It's essential to get everyone buying into it."