A Migration Roadmap: Keys for Moving to a Cloud POS

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A Migration Roadmap: Keys for Moving to a Cloud POS

By Tammy Mastroberte, Contributing Editor - 08/07/2015
The traditional point-of-sale system, whether in restaurants or retail, brought many benefits to operators, including connectivity, visibility and speed. As technology has evolved – including how guests want to pay as well as how businesses want to operate – options have emerged to help restaurants run truly next-generation businesses. Cloud-based POS is a part of this progression. Hospitality Technology’s 2015 POS Software Trend Report reveals that cloud POS is a top functionality on shopping lists, with 35% of operators naming it a priority for their next POS upgrade.

“I can be at my desk, at my house, or on my phone and can check sales reports, update or remove a button from the POS, and it can all be done from a browser,” says Mike Van Dorn, operations manager at Momofuku Milk Bar (www.milkbarstore.com) based in Brooklyn, NY, with five locations plus two pop-up seasonal stores. “With cloud we are able to operate all our businesses from one centralized hub, which makes life easier for us.”

Maintenance and upkeep of hardware and software become easier and faster with cloud-based systems. According to Todd Ca­plan, CFO and controller at Max Brenner In­ternational (www.maxbrenner.com) based in New York, this also results in restaurant operators spending less time and money on IT.

“We are a hospitality company not an IT company so philosophically I believe running a traditional POS requires a strong IT presence and base knowledge, just to maintain equipment and software,” he notes. “That is not our core focus.” He goes on to explain that the traditional POS model often includes licensing fees, plus maintenance and equipment costs that are much higher than with cloud-based systems. Hardware alone can cost thousands of dollars.

“We can afford to lose a couple iPads a year at each location and still not approach the maintenance plan program fees of a traditional POS,” Caplan says. “That alone allows you to reach ROI in under a year, and subscription fees are minimal compared to licensing a legacy system.”

Migrating from traditional to cloud POS is not without challenges. HT queried operators who have already made the move and identified the following strategies to help prepare and address issues before they arise.

Make potential vendor partners part of the discussion
When choosing the right vendor for any technology, narrow it down to a few frontrunners early in the process. Integration with current systems,  overall capabilities and company needs should be considered up front.

“Identifying what pieces of the old system you like and dislike, and plotting out a mission statement as to why you are making the switch is a good first step,” says Van Dorn who chose Aireus (www.aireus.com) for MilkBar’s POS. “For us, we knew we wanted a solution that would be compatible with our Compeat (www.compeat.com) inventory and accounting software.”

Next, demos, proposals and even conversations with the vendor’s current customers should be part of the process, says Caplan, who also selected Aireus, utilizing an iPad-based solution. They did a “deep dive” with three or four vendors, providing them with a specific list of their requirements. “The most important thing anybody can do is due diligence and talk to others using the system on a day to day basis, and even see it in action,” he advises.

Additionally, during the selection process, operators should make sure the vendor is willing to contribute to the migration over the long haul. Choosing someone familiar with the hospitality industry is also critical, Caplan advises. “Any vendor who wants to sell you but does not want to be an active player in transitioning from one to the other is likely not going to be a good long-term partner,” he says, explaining there are a lot of cloud POS options, but it’s key to choose one geared toward the industry, whether it’s a bar, tavern or quick service chain.

Vendors who have familiarity and longevity in the space can offer insight to assist in the entire process, agrees Patrick Benson, CIO of Ovation Brands (www.ovationbrands.com) based in Eagan, Minn. and operating 340 locations under six different brands.

“There are best practices and they evolve based on experience,” he notes. “So for us, it was about utilizing the collective knowledge of Micros (now Oracle Hospitality) (www.micros.com).”

Map out a migration plan
Creating a strategy based on what is currently in place and how it will look in the new system is an important step. For example, restaurant operators must consider if menus will be created in the same way and if any changes to operations need to be made. “It’s easier to manipulate and work on it when it’s just starting and you are in your office than having to do it when it’s operating in the restaurant,” Van Dorn says.

Some considerations should include: how the menu will transfer over; how it should be structured; and if the database structure will need to change. “The systems may look and operate the same, but they are different,” Caplan warns. “It’s about making sure you structure it correctly when you build it the first time.”

Also, most tablet and cloud systems require Wi-Fi, so it’s important to know how the POS will operate if Wi-Fi goes down. Operators need to have a plan in place and decide whether the system will go to cellular or offline transactions and if it will it sync up automatically when it comes back online.

Factoring integration into the puzzle
When choosing and implementing any new technology, it is imperative to find out if the system integrates with what a company currently has or if vendors are willing to work with one another to make it happen. For restaurant operators, inventory, accounting, kitchen systems, credit card processing and more need to be part of the plan when migrating the POS, but the place to start is with the credit card processor. If the new POS doesn’t work with the current processor, this will add cost and time to the project.

“The number one consideration should be your credit card processor because if the POS system can’t use your company you will spend money switching,” says Van Dorn, adding it will also add a chunk of time to the deployment schedule.

At Ovation Brands, with Micros now being part of Oracle, the chain had an easier transition because it was already using Oracle’s finance ERP system in the cloud. The system didn’t integrate with its CrunchTime! (www.crunchtime.com) back-office system, however, which is also cloud-based. Fortunately, the two companies were willing to work together on the chain’s behalf “to architect an end-to-end solution that fit the buffet restaurant model we have,” says Benson.

Operators need to decide what integrations they want or need, including business intelligence systems, time and attendance, payroll providers, accounting, food ordering and more. If integration does not already exist between the POS and those systems, operators must find out whether or not the vendors are willing to take responsibility for the integration.

“Find out what existing hardware, like check printers and cash drawers, you can reuse ahead of time because having to buy new ones can run up the investment quickly,” Caplan advises.

For Ovation Brands choosing to move the POS to the cloud was a matter of “future-proofing.” The company already had experience and a comfort level with the cloud through its back-office system and was ready to move its POS above property with very specific goals in mind.

“We were looking for something that had high-speed to value, lower cost of ownership and would save us from the traditional IT intensive POS implementation where you have to administer it and have a staff to support it,” Benson says. “Having the POS in the cloud helps us modernize the way we conduct business.”