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By Mel Duvall
The thrum of conversations, the clinking of glasses and the shuttling of plates to and from the kitchen is reaching a happy crescendo at the Romano's Macaroni Grill in Desert Ridge, Phoenix, at the height of dining on a Thursday night.
A family of four places their orders: A medium-cooked Tuscan Rib Eye Steak for dad, a Penne Rustica for mom, a spicy Sicilian Pizza, and an order of Chicken Fingerias off the kid's menu for the two boys.
After the waitress enters the information into the restaurant's point of sale (POS) system, the orders appear in the kitchen on overhead display screens. The software behind the kitchen display system automatically calculates which meal should go into the ovens or on the grill first, so that all four meals will be ready at the same time. The system knows the theoretical cook times of each of the meals on the restaurant's menu, right down to the difference between a medium-cooked steak and a rare steak. After the cook begins each meal, he "bumps" the display screen by tapping a bar so the next order to be prepared appears.
Not long after, the meals for the family of four are delivered in unison, despite a steady line-up of patrons that is beginning to strain the restaurant's serving staff.
The next morning, analysts at Brinker International in Dallas will pore over reports dissecting the operations at this restaurant, as well as the more than 1,800 Macaroni Grills, Chili's Grill & Bar, On The Border Mexican Grill & Cantina and Maggiano's Little Italy restaurants the company operates. The analysts will be looking for insights into how they can improve the dining experience for customers and increase the company's bottom line. Which meals are producing the greatest customer satisfaction levels, which restaurants have higher average bill totals, and why is there a bottleneck in the To Go section of some outlets?
"In the restaurant business, people like to work on gut feelings," says Kenny Sullivan, director of business intelligence at Brinker. "But when you operate 1,800 restaurants you can't rely on gut feelings - there's too much going on, too many variables.
"There has been an explosion of technologies in recent years that allow us to see and analyze the business in new ways. What we've been able to do is put hard facts in front of our executives so they can have more confidence in the decisions they're making."
Those hard facts, which are powered by a 1.2 terabyte Teradata data warehouse, and business intelligence tools from Information Builders, are helping executives at Brinker make better decisions such as where to invest in new locations, which restaurant practices are providing the greatest customer satisfaction levels and profit margins, and how those practices can be shared. They power an operation that produced a $230 million after-tax profit on $4.4 billion in revenue last year
In fact, the type of analysis now taking place at Brinker is a clear example of the way companies are mining their data in new ways to foster innovation and win in the marketplace. In their book Competing on Analytics: The New Science of Winning (Harvard School Press, 2007) Thomas H. Davenport, the President's Distinguished Professor of Information Technology and Management at Babson College, and Jeanne G. Harris, director of research for the Accenture Institute for High Performance Business, argue that leading edge companies will be increasingly defined by their use of business analytics.
In the mid-1990s Gartner defined business intelligence as: "An interactive process for exploring and analyzing structured and domain-specific information to discern trends or patterns, thereby deriving insights and drawing conclusions. The business intelligence process includes communicating findings and effecting change." Business analytics clearly fits within that definition, however, Davenport defines analytics as a subset of business intelligence, where data is combined with statistical and quantitative analysis, predictive models, and fact-based-management to drive decisions and actions.
Already a number of companies including Netflix, Capital One, Google and Harrah's Entertainment are creating competitive strategies around analytic-based business processes. Moreover, many of the companies that have made significant strides in this direction are achieving impressive results.
For example, Harrah's Entertainment, whose Chairman and CEO Gary Lovemen holds a Ph.D. in economics from the Massachusetts Institute of Technology, has been enormously successful in applying scientific tools and analytical techniques. One of the key analytical tools: Customer loyalty cards that allow Harrah's to capture customer behavior data. That data is being employed real time by marketing and operations to optimize yield, set prices for hotel rooms and design optimal traffic flow through its many casinos.
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