MURTEC 2024 Workshop Dives into Digital Transformation 2.0
During MURTEC 2024, attendees had the opportunity to attend interactive workshops on a variety of interesting and important topics. Dallan Elk, VP of IT, Zaxby’s Franchising LLC and Richard Newman, Chief Revenue Officer, Acumera hosted one such workshop with the theme: “Digital Transformation 2.0: Is Your Restaurant Ready?” The term Digital Transformation has been around for decades. It refers to the fact that web infrastructure has begun to have a meaningful impact on the physical world.
According to Newman, the restaurant industry as a whole has reached Digital Transformation 1.0 (which includes tech initiatives such as e-commerce and online ordering) pretty broadly.
“Some of our customers are seeing more than 70 percent of their orders come from online,” Newman said. “There are even folks building entire businesses on the fact that a physical restaurant is no longer necessary.”
During a conversation the previous evening, Elk spoke with a MURTEC attendee who had a different point of view of Digital Transformation 1.0. In their conversation, the attendee said Digital Transformation 1.0 is the moment of realization that a restaurant is now just a place where food is prepared, not where guests are at.
Another facet of Digital Transformation 1.0 is the reliance of restaurants on the monolithic client server environment.
“Even if that server is located in the cloud, it's still a server,” Newman explained. “That server then has a database associated with it, and all the applications run on it. Often these systems are Microsoft Windows-based. Often you have a lot of standalone physical hardware, and there’s a lack of observability or reactive approach to customers and to system support. There's a lot of configurations to manage in the store. It's slow to adapt and hard to change, and it has a high total cost of ownership.”
Digital Transformation 2.0
As technology continues to emerge and evolve, restaurants will need to adapt.
“Some [of these new technologies] are very compelling, and a lot of them are going to have unintended consequences for how we do business, how we work together, how we serve customers, how we operate our restaurants, and how we take care of our associates,” Newman explained.
Some of the 2.0 technologies Newman mentioned include connected kitchen technology, AI, machine learning, machine vision, robotics, and fully integrated order routing. If implemented correctly, each of these technologies could have a significant impact on food preparation, quality and cost as well as decision-making at various levels within the restaurant organization.
But Digital Transformation 2.0 also refers to restaurants moving away from monolithic client server environments and moving to microservices and cloud to edge (as opposed to large standalone systems). While moving to the edge may be a key part of Digital Transformation 2.0, there may be some hesitancy among restaurant brands to make the leap.
“Zaxby’s statement around edge computing is: We’re not risk averse, but we’re also not risk tolerant,” Elk explained. “From an edge side, every time you want to deploy a new piece of hardware, you have to send out a truck roll. Truck rolling to a thousand restaurants becomes very expensive. So, the initial ROI to try and bring down the edge computing side, has a very hard business case on our side.
“Second, you have to be concerned about PCI 4.0,” Elk continued. “The whole advantage of edge is that I’ve got one unit in the cloud that’s handling whatever I want it to be. It’s containerized. But that also means it’s pretty much on one segment and I’m having to deal with a lot of the PCI concerns. PCI 4.0 says that bespoke software – pretty much anything you’re pushing in from a Kubernetes deployment is guaranteed to be bespoke – will fall under the PCI scope and that’s going to cause all kinds of grief.”
On the other hand, some restaurants have already gone to an edge-based model. According to Newman, Taco Bell “made the leap” a few years ago and solved some of the problems Elk mentioned by being able to have different microservices applications operating within different security zones within an edge fabric that happens to be pretty flexible. And when done correctly, “you can get to a lower total cost of ownership because you need less hardware, your software is more agile, you have greater reliability, and your support costs end up dropping.”
Digital Transformation 2.0 + Security
Regardless of whether or not a restaurant decides to move to the edge, implementing any of these other Digital Transformation 2.0 technologies will open up brands to potential threats.
“The connected kitchen and all of these IoT devices represent potential threat vectors,” Newman said. “And for many of those devices, you're not dropping antivirus on it; you're not necessarily able to easily scan it; you don't even know what software's running on it. And many of them go straight up to the cloud, to a vendor portal with an encrypted channel, which you've got no visibility into. It hasn't happened yet, but we're going to start to see a progression of very serious breaches based on this type of stuff.”
A lot of a restaurant’s IP and PII risks fall into that same edge space, Elk added.
“With computer vision, it’s fine if you’re just looking at chicken. But the second you start looking at people or at license plates, you start having a PII concern. If that’s a vector where people are coming in, you’ve got a PII at rest or a PII in flight, and it becomes the weakest link in your overall network. An AI component tied to your point really make a lot of people nervous,” Elk explained.
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