Dec 15, 2023 5 min read

The Tech Conundrum: Debunking the Assumption that Restaurants Can Thrive Without Technology

I am frequently asked about the Buy vs Build decision that brands must make & always reflect on my interactions with founders of Wendy’s, Subway, and Houston’s/Hillstone & how they would approach the application of technology into their businesses.
The Tech Conundrum: Debunking the Assumption that Restaurants Can Thrive Without Technology

[Note: Steven is employed by Amazon Web Services (AWS). All views expressed are entirely personal.]

In the ever-evolving landscape of the restaurant industry, a persistent assumption lingers: that restaurants do not need technology or that they do not currently embrace it. Regardless of a restaurants size (single store operation or global brand) and operating segment (Quick Service or Fine Dining), this misconception fails to recognize the pivotal role technology plays in enhancing the customer experience and improving operating efficiency. My firsthand insights into the impact of technology on customer interactions and operational excellence come from invaluable encounters with industry pioneers including Dave Thomas founder of Wendy's; Fred DeLuca founder of Subway; and George Biel founder of Houston's/Hillstone. I’ll be diving into my personal learnings and time spent at AWS to shed light on how technology has become indispensable to the Restaurant Industry.

The most important innovation driving the adoption of technology in the industry has been the “cloud.” The cloud is the delivery of IT services, on-demand, over the internet. It enables brands to use technology they otherwise could not afford and to only pay for the value of the services they receive. The cloud enables brands with agility, flexibility, global reach, and cost-optimized operations they need as they thrive with technology.

Dave Thomas: The Visionary Behind Wendy's

I was lucky at the age of 14 (with working papers) to obtain a job at a Wendy’s near Dave Thomas’ home in South Florida. Dave, the visionary founder of Wendy's in 1969, centered the brand around the fundamental principle of "Quality is Our Recipe." That concept didn’t just apply to the quality of Wendy’s food, it also referred to the quality of the service guests experienced. Ninety percent of my time with Dave was spent in the dining room where he would interact with every guest to understand what brought them to Wendy’s and to ensure they felt his style of hospitality. Dave was also a keen advocate of using technology to improve customer service. Under his leadership, Wendy’s became one of the first fast-food chains to adopt electronic Point-of-Sale (POS) systems. These systems revolutionized customer interactions and order processing. By embracing technology, Wendy's set a precedent for efficiency and customer service in the fast-food sector, proving that staying ahead required more than just a compelling menu.

Fred DeLuca: Subway's Entrepreneurial Spirit Meets Technology

The restaurant industry is the only industry in the world where customization and final assembly of the “product” occur directly in front of the guest and in real-time. As you can imagine (or have experienced), this can make operational efficiency challenging. In 1965, Fred DeLuca opened the first Pete's Super Submarines and later rebranded as Subway in 1968. Fred and the Franchisees of the Subway Restaurant brand called me in 2011. They wanted my help bringing their idea to use technology to streamline the operations of the restaurant to life. During the four years I worked alongside Fred, I was inspired by his visionary approach to the “systemization” of operations and franchising, which made it easy for entrepreneurs to join the “Subway System.” He was passionate about the implementation of technology to enhance order accuracy, inventory management, and real-time reporting. The utilization of technology, empowered franchisees with tools to make data-driven decisions, fostering a culture of accountability and success.

George Biel: Houston's Founder and the Fusion of Hospitality and Technology

In the upscale dining landscape, George Biel, the founder of Houston's, carved out a niche by blending hospitality with culinary excellence. George’s foray into the restaurant scene began in 1977 when he opened the first Houston's in Nashville, after being mentored by Norman E. Brinker, who many consider the Godfather of the American Restaurant Industry. During my five years working with George, his obsession for “Silent and Unobtrusive Service” was the driver for delivering personalized service to the ever-evolving preferences of discerning clientele. George led Houston's to embrace technology to seamlessly know and understand customers and then to be able to surpass their expectations. This included reservation systems, Customer Relationship Management (CRM), and Learning and Training tools for staff.

Despite the successes of industry leaders like Dave Thomas, Fred DeLuca, and George Biel, the assumption that restaurants can thrive without significant technological integration persists. Skeptics argue that traditional methods are sufficient, ignoring the dynamic landscape where technology enhances customer experiences, improves operating efficiencies, and drives business growth.

Breaking the Assumption: The Crucial Role of Cloud Technology in Restaurants

No Industry should ignore the transformative power of progress. Today, in an era where digital transformation is reshaping industries, restaurants must embrace technology to stay competitive. From contactless ordering, computer vision, voice automation, and Artificial Intelligence (AI), technology offers the tools that empower restaurateurs to build the dining concepts that customers desire. All of these innovations have been driven by the power of the cloud. Instead of buying, owning, and maintaining their own data centers and servers, restaurant brands and the technology providers who build systems for the industry acquire compute power, storage, databases, and other services on an as-needed basis. The value for organizations using the cloud is: 1) they can grow or shrink instantly only paying for what they use, 2) they have agility as they quickly spin up resources as they need them, 3) they trade large up-front capital expenses for small variable expenses, 4) they become elastic – only needing to provision the right capacity without excess, 5) they innovate faster because they can focus their resources on developing applications that differentiate their business, and 6) they can scale an experiment at one restaurant to the entire globe, in minutes.

Consider the impact of self-order kiosks, a technology that has gained momentum in the fast-food sector. These kiosks not only expedite the ordering process but also provide customers with a sense of control over their dining experience. The integration of mobile ordering apps further extends convenience, allowing guests to place orders, customize meals, and pay seamlessly, all from the palm of their hand.

Moreover, Machine Learning (ML), AI, and data analytics have become a cornerstone for informed decision-making. Restaurants can leverage data to understand customer preferences, track inventory, and forecast demand. This data-driven approach not only minimizes waste but also enables restaurants to tailor their offerings to meet the evolving tastes of guests.

The Digital Divide: Addressing Skepticism and Embracing Change

Skepticism surrounding the integration of technology in the restaurant industry often stems from a fear of the unknown. Traditionalists argue that a personal touch and culinary craftsmanship should be sufficient, underestimating the capacity of technology to enhance these aspects rather than replace them.

To bridge this digital divide, it is crucial to recognize that technology complements, rather than replaces, human-centric elements in the restaurant business. Automated processes can free up staff to focus on delivering exceptional customer service, while digital interfaces can enhance communication and transparency between the kitchen and the front-of-house.

The success stories of industry pioneers like Dave, Fred, and George underline the importance of adapting to technological advancements. These leaders understood that embracing change was not a betrayal of tradition but a strategic move to stay relevant and exceed customer expectations. As the restaurant landscape continues to evolve, those who resist technological integration risk being left behind.

Conclusion: The Future of Dining Lies in Tech-Savvy Innovation

The evolving landscape of the restaurant industry demands a reevaluation of traditional notions, urging restaurateurs to embrace technology as a crucial ally on their journey to success. As the digital era unfolds, the “easy button” for thriving in hospitality lies in transforming skepticism into an enthusiastic embrace of the tech-savvy innovations that redefine the dining experience for guests, employees, franchisees, and restaurateurs alike.

I’m grateful that my personal journey that began alongside Dave, and passed through Fred and George (and countless other mentors) has placed me at Amazon Web Services (AWS). Myself and a team of trusted advisors help Travel & Hospitality brands around the globe transform using the power of the AWS cloud. To learn more about how leading brands are innovating for the future on AWS; please visit: AWS/Travel.

Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to Hospitality Headline.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.