By The Business Solutions Network
This ISV (independent software vendor) is seeing explosive growth by providing cloud-based point of sale and business management services to small to midsize restaurants.
One of the keys to his company’s growth is leveraging the cloud to offer small restaurants IT features formerly outside their budgets, says Jim Ngo, president and founder of Cirra Systems.
Although cloud computing and managed services have been mainstream in many industries for nearly a decade, a lot of independent retailers have yet to take the plunge. Oftentimes, the business owner, overwhelmed by all the other responsibilities of running the business – from hiring employees to ordering supplies and advertising – puts technology decisions into the “I’ll get to it someday” category. This decision results in owners buying the most basic cash drawer systems or ECRs (electronic cash registers) along with (nonintegrated) payment processing terminals sold by local ISOs.
Jim Ngo, founder and president of POS and restaurant management ISV and solutions provider Cirra Systems, found the above scenario to be the norm during his years working as a restaurant IT consultant. “For those who did see the value of investing in POS and other technologies, it was difficult to find the right technology,” he says. “Even if the restaurant owner contracted with a VAR, much of the onus of performing basic troubleshooting steps and system updates was the owner’s responsibility. In many cases, restaurant owners found themselves in a constant cycle of dealing with POS and payment problems instead of focusing on running their businesses.”
How The Cloud Lowers POS And RMS Costs
Ngo’s experience working for Apple, Lucent, and other tech companies helped him see that the cloud-computing trend offered an answer to small businesses’ POS and business management needs. And in 2013, after a year consulting with former colleagues about his idea, he started Cirra Systems and began immediately working on his company’s flagship product, Tavlo, a cloud-based POS and restaurant management system (RMS). “A lot of the cost with legacy POS systems comes from the CapEx investment required for onpremises data servers and network equipment – followed by ongoing maintenance costs,” says Ngo. “The cloud replaces both expenses with a small monthly fee. The reason it’s so much less expensive is that by moving the data server and networking equipment to the cloud, the cost of procuring and managing the hardware and software is shared across many customers thanks to the multitenancy capabilities of a cloud architecture. And second, the IT provider no longer has to go on-site to each customer to troubleshoot computers and servers because the bulk of the computer processing and storage is happening in a central location.”
In addition to cost savings on equipment, the cloud makes technology integration easier, says Ngo, and these two benefits are what Cirra Systems is using to differentiate itself from other resellers. “Using the cloud as the foundation for our technology frees us up from having to sell technology for technology’s sake and allows us to focus on helping restaurants solve their business challenges,” he says. “For example, within the past year we won a deal with the University of Utah student cafeteria after showing them how we could resolve their daily bottlenecks that occurred during lunchtime as hundreds of students gathered at once in the cafeteria to order food when classes let out.” The solution entailed installing three tablet-based self-serve kiosks in the cafeteria. The kiosks are each outfitted with Cirra Systems’ cloud-based software and connected to multiple smart kitchen printers, which are also connected to Cirra Systems’ cloud. “Sending orders directly from the kiosk to the printer significantly cuts down on errors,” says Ngo. “The students love the speed and accuracy. The order sent is exactly what the student wants; there’s no room for miscommunication between students and order takers.”
The installation took only one day, and the cafeteria experienced no downtime during the process. “The onpremises equipment is a small fraction of the cost of a traditional kiosk system, made up of just three tablets and the Epson smart printer,” says Ngo. “And we handle all ongoing remote monitoring and support, so the customer never has to worry about it.”
One of the biggest objections Ngo hears from prospects is, “What happens if my internet connection goes down?” “Internet outages are pretty rare, but we created a simple workaround just in case,” he says. “Within a couple of minutes, we can walk the customer through the process of redirecting their POS to a 4G cellular network using their smartphone or a 4G tablet. Even when operating on the cellular network, the system is connected to our cloud environment, all connections are secure, and the client can operate without any noticeable drop in performance. The other question we sometimes get is, ‘What happens if your cloud environment goes down?’ We overcome these objections by explaining that we use high-end data centers owned by Amazon and other cloud providers that include power and system redundancy, and we’re approaching 800 days with zero downtime or data loss.”
“A lot of the cost with legacy POS systems comes from the CapEx investment required for on-premises data servers and network equipment — followed by ongoing maintenance costs.”
Jim Ngo, founder and president, Cirra Systems
Another benefit Ngo touts with cloud-based POS is agility. “In the past, I saw restaurant owners invest thousands of dollars to upgrade their legacy POS systems and add new features such as online ordering. After paying a software developer thousands of dollars to update their website and associate it with their POS, they found that the integration was poor, keeping up with the software licensing and maintenance was too expensive, and within a couple of years they abandoned the project. With a cloud-based offering, adding online ordering or sales analytics or a loyalty program is much simpler. We handle the website development and e-commerce enablement in-house, and it’s integrated with our POS system and payment processing provider [Heartland Payment Systems], which means no one at the restaurant has to manually key in any information after receiving an online order. As soon as the order is paid for, it’s sent immediately to the kitchen and put in a queue in the order it was received. Plus, if a restaurant runs out of a product, it’s automatically updated on their website and marked as ‘out of stock.’ These kinds of services used to be reserved for large chain restaurants with large IT staffs, but not anymore, thanks to the cloud.”
KDS: The Next Big Revenue Generator In Cloud-Based POS
Another area where Ngo saw inefficiencies among small restaurants was the communication between the wait staff and kitchen. “After a meal is prepared in the kitchen, it is placed in a waiting area and oftentimes the burden is on the wait staff to remember who ordered what,” says Ngo. “Many larger restaurants use kitchen display systems [KDSs] to eliminate order errors. But once the meal is ready, it no longer appears on the screen, so order errors still occur.”
This is another example that illustrates the advantages of a cloud-based, integrated POS system, he says. “By integrating our RMS with a cloud-based kitchen printer [e.g., Epson OmniLink U220-i] and LCD kitchen display, the restaurant gets the benefit of both a kitchen printer and a KDS. Restaurant kitchens receive a printed receipt (called a “chit”) that stays with the order until it’s delivered to the table. “Earlier this year, we installed a KDS solution for gourmet burger restaurant chain Rich’s Burgers-N-Grub in Salt Lake City,” says Ngo. “The restaurant serves up 200 meals between noon and 1:30 daily, and it was using a cash register and kitchen order wheel to process orders. As many as five kitchen employees could touch the same ticket — especially during busy periods — often missing modifiers like no onions or no mayo, which led to order errors and waste. In addition to helping the restaurant reduce its lines by adding e-commerce functionality and online ordering functionality, we replaced their cash register with our RMS system and a KDS and printer for their kitchen. The customer saw an immediate reduction in order errors and food waste, as well as efficiency gains.”
Not only is Cirra Systems’ KDS system a fraction of the cost of legacy KDS systems used by much larger restaurants, it’s integrated with its RMS system and printers via the cloud, which means all software updates and other maintenance are handled remotely. “It’s a common practice in many restaurants to place a dedicated employee — called an expediter — at the kitchen window to reduce order errors. Our cloud-based solution eliminates that need,” he says.
“Today, we’re in the middle of another revolution, which is about shaping customer experience with services such as tableside ordering, pay at the table, and online ordering.”
Jim Ngo, founder and president, Cirra Systems
Ngo sees 2017 as being a big year for KDS integrations, and he says he already has more than 12 prospects in the pipeline and suspects that number could reach 20 customers within the next few months. “Years ago, POS terminals ushered in a wave of change in retail and restaurant environments,” he says. “Today, we’re in the middle of another revolution, which is about shaping customer experience with services such as tableside ordering, pay at the table, and online ordering. By leveraging all that the cloud has to offer, IT solutions providers can easily add these features and meet their customer demands while maintaining PCI-DSS [Payment Card Industry Data Security Standard] and EMV [Europay, MasterCard, and Visa] compliance.”
The fact that Cirra Systems saw 150 percent growth last year and is projecting up to 100 percent growth this year suggests Ngo’s strategy is one that other retail VARs should seriously investigate.