Insight #026:The True Price of Digital Fragmentation

As any forward-thinking restaurant brand understands too well, there have never been more options out there for digital tools. As capabilities like POS technology, personalized ordering, omnichannel experiences, and real-time data analytics become integral to the operation of any hospitality brand, the pressure on businesses to choose wisely has never been greater. And the cost of maintaining and growing a brand’s digital framework has never been higher.

There has been an advent of subscription and commission-based digital services. While these may seem like the more financially viable ways to tap into the latest technology from the onset, brands are finding that more often than not these tools become exponentially more costly as their business grows.

John Laporte, TASK’s US President, says that this dependency on subscription services is becoming a growing problem for hospitality enterprises. The solution? John suggests a holistic approach to digital transformation is the way forward – saving huge costs for brands while also paving the way for a more robust, scalable, and sustainable technology framework.

The trap of digital subscriptions

New restaurant brands often sign up for what they think are going to be free or low-cost subscription solutions. While these options often bill themselves as being easy and cheap to set up and come with “free” hardware, they don’t typically offer any long-term value.

John explains, “But as these brands grow and get a foothold in the market, their transaction volume also grows and they start to realize that their subscriptions are costing them dearly. These subscription and extra credit card fees add up very quickly. The seemingly free POS that you installed 3 years ago is now costing you enough annually in extra fees to purchase a completely new system, including hardware, every year!”

For more mature brands with legacy POS solutions, digital subscriptions are an easy sell because they are a quick add-on and require no large investment up front – but they can quickly trap brands into a cycle of overpaying and under-delivering. Because each tool often comes from a different provider, brands are left with a highly complex technology architecture filled with integration challenges.

This not only adds expense due to the monthly fees paid for each solution, but it also creates “digital fragmentation” of customer data into silos and requires even more investment in tools to analyze and gain insights into each sales channel and gain a holistic view of the guest.?

Trevor Dee, TASK’s US Vice President of Business Development, touches on how this problem often plays out for brands in North America. “There’s a tendency to go out and find a lot of different solutions to meet each operational need. But this is expensive to support long-term and becomes increasingly cumbersome to manage. Eventually, these brands have to go back and figure out how to simplify and consolidate their technology. That’s where we see companies seeking out a solution that offers all the best tools but in one place.”

Unified solutions are the alternative

John says, “What CTOs are crying out for is one master CMS (content management system) connected to a central database that controls all sales channels, everywhere. They want a cloud platform that is API-first so that as technology changes they can simply plug in the latest technology – making the ecosystem future-proof. This is a truly unified solution”.

Imagine having just one area in your restaurant CMS to maintain prices and products. Imagine integrations so robust that you can configure an item once and deploy it everywhere. A unified end-to-end platform contains all sales channel applications in one place, and applications are able to communicate seamlessly even as upgrades occur. This kind of holistic solution ultimately means that integration challenges will become things of the past.

Trevor explains, “The cost savings of an end-to-end solution go far beyond just the monthly subscription savings. You’re also streamlining your entire internal process and minimizing staff time spent on solution management and configuring integration problems. And for your customers, a consistent platform also means better service and smoother digital experiences.”

What about upfront costs? What could you be losing with a total solution?

John says that there is a misconception around the investment required for complete technology solutions. “There is an assumption that all-in-one platforms come with a huge upfront price tag, but that isn’t always the case,” he says. “The benefit of a scalable enterprise solution is that you don’t have to do everything all at once. You can start with the basics, and add in new capabilities and features as you need or want them.”

In the same way, TASK’s solution also allows brands to remove or scale down digital elements as required. True scalability means having the digital flexibility to follow current business or customer demands as they morph or grow.

Trevor says, “People often describe working with us as ‘refreshing’, and I think that’s because we’re fully open to our partners. We have all these different solutions available, but we’re also able to create the functionality that a particular brand needs. What we focus on is making sure that brands are able to use or slightly reconfigure the products we offer in the way that works best for them.”

When it comes to technology investment, Trevor and John agree that single solutions are almost always the most cost-effective and beneficial for the long-term growth of your business. Digital fragmentation and relying on an array of different technology vendors is almost always going to cost you more – not just because of inflated fees and commissions, but also from the indirect costs and time required to manage a complex digital framework.