Subway has embarked on a major information systems upgrade and chief technology officer Thys Van Hout spoke with Nation’s Restaurant News about the leading sub chain’s use of business intelligence tools as part of that initiative.
Van Hout since 2008 has served as CTO for Subway, the Milford, Conn.-based chain owned by Doctor’s Associates Inc., which, as of Aug. 11, franchised 34,952 restaurants worldwide, including 24,338 in the United States. Subway reported 2010 worldwide sales of $15.2 billion.
He discussed the growing use of business intelligence tools from a United Kingdom-based technology vendor by Subway operators in the context of an overall technology improvement campaign under way at the chain.
Though Van Hout declined to describe in detail the functionality of the business intelligence software being used by Subway, such technology typically collects from one or multiple restaurants point-of-sale system transaction data and information from back-office management systems, if any, to generate performance reports or graphical presentations that can be accessed online by managers or owners.
Such reports might combine real-time or near-real-time sales recaps and time-clock information to generate a sales-per-employee metric that makes clear if staffing levels are appropriate or in need immediate adjustment. They might also use menu-mix reports and stock-on-hand data to suggest immediate or future inventory management moves, such as the need to order additional specialty ingredients used for a limited-time offer. Others also report the number of over-rings by employee, which, in large numbers may suggest a staffer needs additional register training or may be stealing money or giving away food.
All such reports may be shown on a per-store basis or, if multiple stores are involved, aggregate the data from the individual locations to show comparable performance among all the restaurants and averages that may make clear when a store is underperforming or on its game.
A portion of the exchange between NRN and Van Hout follows:
How would you describe the business intelligence technology being used by Subway operators?
I’d describe it as a way through which we capture transactional data to allow the franchisee to stay really close to the store and monitor [online] what is going on without needing to be physically in the store.
Has above-store reporting and remote-access technology been used by Subway operators in the past?
There have been other solutions that other [vendors] have provided, but this is the first time that a [Doctor’s Associates] sponsored solution has been provided.
What prompted the company to take that step?
We’re in the process of implementing a series of restaurant technology upgrades, so we’re looking at what are all the different ways we can assist our franchisees to do a better job of serving our customers and be more efficient, and thereby drive [their] profitability. One of our major initiatives is the new Subway POS system, which will be launching later this year. [Business intelligence capability] just happens to be one [of the improvements] that is being implemented a little earlier than some of the others.
Can you talk more about the POS change?
We’ve been working for over two years now, customizing not only the front counter types of [POS] applications, but also all of the [software] required to manage a restaurant and actually be able to do a bunch of [administrative] things above the store. We collectively call that the Subway POS Solution. We are continuing to fine tune it and hope to launch it relatively soon.
Is this new POS software or software to augment existing programs?
We will soon be transitioning on a worldwide basis to a single POS system that is owned by the company and will replace all existing POS software. This is brand new, state-of-the-art stuff.
What benefits might franchisees reap by using the new business intelligence software?
By being able to provide a very intuitive, visual look at the operations of a store, you can [help franchisees] quickly spot opportunities to improve operations, including labor scheduling.
Can you provide some details about the software’s functionality?
I don’t want to go into specifics, but what I can tell you is that one of the things people absolutely love about it is the graphical nature of it and the intuitiveness of it. Many of our franchisees simply use an iPad [Apple tablet computer] to access the results. They can be anywhere [with Internet access] and monitor the important operational features of their restaurants in near real time.
So the graphical nature of presentations is an important part of Subway’s new technology?
What I’ve found is that if something looks dull, then it doesn’t create the kind of pizzazz and excitement [needed]. This is colorful, graphical and intuitive and so it is encourages usage — and the usage is just phenomenal. People get it, install it and then they use it.
Is the business intelligence system in rollout mode?
Franchisees can voluntarily sign up. We have over 12,000 now using the product.
How is the cost of that system being covered?
This is one aspect of our [multi-prong] commitment to upgrade technology for our franchisees and their restaurants. All of that is being handled as one big block. So, as it relates specifically to the [business intelligence] solution, there is no charge to the franchisee.
Related to the entire upgrade program, then, can you say if there will be a sharing of costs between the franchisor and franchisee?
How that is going to be handled has not yet been decided.
Does the use of the business intelligence technology and other upgrades require Internet access?
Many of our technologies depend on the having great access to the cloud [or remotely-hosted software and data storage] — and we’re talking about a private cloud. A good, solid Internet connection is essential for that kind of technology strategy. We have built [things] in such a way that if someone digs up your front yard and happens to interrupt the Internet connection, the systems are designed to keep on trucking. So we’re not talking about something that is dangerous because you depend on an Internet connection. Rather, we are facilitated by the Internet connection. In the developed markets throughout the world we have virtually all stores on high-speed Internet connections, but there are some developing parts of the world where it is a little more challenging.
Characterize the importance of the business intelligence system deployment and larger technology upgrade under way?
Our overall vision is to make technology a strength for Subway and we’re making good progress in realizing that vision and these are important steps. We’re putting all the basics in place to help us help our franchisees. We’re finding that increasing the emphasis on technology is a wonderful way to help them.
What is the timeline for the business intelligence system deployment and overall tech upgrade initiative?
This is an element of a much broader set of initiatives and those initiatives will take us several years to fully implement.
Contact Alan J. Liddle at [email protected].
Follow him on Twitter: @AJ_NRN
