Dunkin' Runs on Innovation

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Dunkin' Runs on Innovation

By Abigail A. Lorden - 03/10/2008
As buzz words go, "innovation," has racked up serious mileage in the information technology industry. The word appears on nearly every industry conference agenda in 2008 (HT owns up to its share) and continues to be a prime directive for many top IT leaders. But beneath all the next-gen talk and the innovation task forces, successful innovation in the quick-service industry requires a dedicated focus on three things: accuracy, speed and simplicity.

"I believe that for the QSR industry IT innovation is simple," explains Dan Sheehan, CIO for Dunkin' Brands. "It's all about delivering additional value, ease of use, and speed to the customer. Providing a total positive customer experience is critical." This approach is at the heart of Dunkin' Brands, currently the largest coffee and baked goods chain in the world with more than 13,000 Dunkin' Donuts and Baskin-Robbins franchised restaurants in 50 countries.

In this exclusive Q&A with Hospitality Technology, Sheehan offers a glimpse into the IT innovation at Dunkin' Brands. He discusses the company's secrets to innovating in a 100-percent franchised environment and shares his perspective on trends and technologies to watch for the QSR industry (including his own "wish list" for new technologies at Dunkin' Donuts).

HT: You came to Dunkin' Brands in 2006 from direct mail company ADVO, where you were the chief information officer. What have you learned during your role at Dunkin' Brands?

DS: Time management! - because my role spans to both the retail and internal systems side of the business, I have to wear many hats. As you can imagine, retail and internal systems have different challenges but require similar results. At the end of the day a positive return on a technical investment is critical to the performance of our individual franchisees and our brands.

HT: Tell us about an experience that stands out as being particularly significant during your time at Dunkin'.

DS: The first time I addressed a group of franchisee leaders about the current state of technology in our restaurants and our need to get to a common platform. It was the first step in educating them on the new platform as well as reviewing some of the struggles of the past. Gaining their alignment, trust and confidence was critical to accelerating the process for building a better customer experience.

HT: What does Dunkin' do to maintain a positive relationship with its franchisees?  

DS: We have an excellent relationship with our franchisees. One of our top priorities is to ensure that the franchisee-franchisor relationship at Dunkin' Brands remains one of the strongest in the industry. We stay in constant contact with our franchisees, from advisory council meetings to frequent visits to the market. Because we have no corporate-owned stores, and all new product testing is done in concert with our franchisees, that trust level with franchisees is critical.

HT: What role do Dunkin' franchisees play in the IT development and selection process?
DS: Within our advisory council system, we have a number of sub-committees that work on projects, including IT. With one of our franchisees, I lead an IT sub-committee. The committee includes a number of regionally represented franchisees. We are charged with working on retail technology projects. We review technology, conduct alpha and beta tests, make recommendations and set standards. 

HT: At Hospitality Technology's 2008 MURTEC (Multi-Unit Restaurant Technology Conference), your keynote speech addresses innovative uses for technology that can accelerate business growth. How do you use technology at Dunkin' Brands to accomplish this goal?

DS: By starting with a standardized technology platform and keeping it simple but, still flexible enough to handle advanced processes. Once the standardized technology platform is in place, we can work to achieve quicker service, better ordering accuracy, and create a better understanding of the company's performance. Once standardization is in place, digital marketing, advertising, supply chain management, labor management, cash management and business intelligence are all enabled.

HT: What are some of the up-and-coming technology trends in foodservice that have you excited?

DS: Some of the technology trends that get me excited are digital signage, digital menu boards and kiosks. These types of technologies within the QSR industry will deliver another level of customer experience. As these technologies become more affordable, I think we will see them in more and more QSR locations. Being able to see interactive marketing, menu content within the store, being able to place my order on a kiosk and then pick it up, all of these will start changing customers' experiences.

HT: If you could put together a "wish-list" for Dunkin's technology solutions, what would be the top three?  

DS: My top three would be a standardized and simple technology and application platform for all of our restaurants, a technology initiative that provides us with speed at the counter and drive thru, and content management at every store so we can push down to the stores hourly, daily or weekly information on products, new menu items, promotions, nutritional information, etc.

HT: Dunkin' Donuts was named number one in customer loyalty by the 2007 Brand Keys Customer Loyalty Engagement Index. How important is customer loyalty to what you do?

DS: Customer loyalty is critical to our business. We have fiercely loyal customers because they know when they come into a Dunkin' Donuts restaurant they are going to get a consistently quality product at a fair price and in an efficient manner. They trust that we will speak plainly to them and give them an honest product each time they come in. 
HT: What role does IT play in improving the loyalty experience for guests? 

DS: Primarily by tracking the guests' experience after they visit our restaurants, then developing this information to enhance the customer experience. Personally, I know when I get involved with a loyalty program, I want it to be easy to use so it keeps me coming back, and of course I want there to be real value for me being such a good customer. I think that IT can assist in making those kinds of things happen via transactions. IT can work with the marketing staff and individual franchisees to provide discounts, up-sell transactions, offer targeted promotions, etc.

But this success is even simpler than loyalty programs. For more than 50 years Dunkin' Donuts has been focused on delivering a quality product for a value price and I believe that consumers today are looking for that.

HT: What are the greatest IT challenges for Dunkin' and what steps are you taking to overcome them?  

DS: Getting all of our restaurants on to a common platform is the greatest challenge. Everyone that I work with realizes that to accelerate business growth, getting the enterprise on a simple, common technology platform is critical.