Recently, I was approached by a CEO for a Software Company, who developed an interesting application geared toward the Restaurant & Bar industry.
During our discussions the CEO had told me that they were at an impasse. They need to integrate their application into all of the Point of Sale Systems(POS) within the Restaurants and Bars throughout the globe. Since, there are roughly 67,000 bars within the US alone, this could be a daunting task given the numerous types of Point of Sale Software Manufacturers.
I had extensive experience in the POS industry, where I steered the CEO away from the idea of integrating into these systems. Given the number of different POS systems, it would be nearly impossible to integrate into all of these applications. If they did try to integrate, the expense could be in the millions of dollars.
The idea of scrapping this direction did not sit well with the CEO. The only alternative formulated by their company would entail placing a piece of hardware in each Restaurant/Bar at a cost of approximately $70 per unit. The hardware would communicate with their customer’s phone once they entered the bar or restaurant, then send the data back to their company servers.
The problem with this solution is it would cost $4.6M for all Restaurants and Bars in the US alone, and there would be issues with maintaining and replacing hardware. In addition to this expense, there would be the cost for communicating back to the servers via WiFi or Cell Towers.
It was at this point during our discussions that I realized that the CEO did not have a viable solution to their problem. Both of the paths mentioned were extremely expensive and risky.
I, then, asked the CEO to take me through their process from when the patron enters the Restaurant or Bar to when their firm receives payment.
When I felt that I had a strong handle on the process, I asked him, “Why not use the phone of the Bartender or Wait Staff as the hardware for communication? (Due to privacy reasons, they could not use their client’s phone.)” This would be a simple solution that the Bartenders and Wait Staff would be glad to implement, since they generate income and tips through this application.
By placing a phone app on the Wait Staffs’ phone, the costs associated to integrating into Point of Sale systems or implementing hardware could be negated. The CEO’s firm could create a phone app for roughly $25K to communicate with their end client’s phone much like many other phone apps on the market. This Child / Parent system would allow their application to work without sophisticated programming or hardware.
In the end, this $25K solution would save this company $4.6M of much needed cash. This is a very strong example of where soliciting outside assistance can pay off with great dividends.
Why does it help to solicit external sources? What often plagues companies, especially those with a “not invented here” mentality, is that they lose a certain amount of objectivity when it comes to their business.
Individuals get engrained in industry standards and internal process where they begin to stop thinking out of the box. The other issue is that individuals within an organization are often too close to the problem. When an individual or group gets too close to a problem, emotions begin to seep in, and everyone knows how emotion can skew one’s perspective and sensibilities.
The morale to this story is that it never hurts to solicit external sources for solutions. There are not only firms with individuals trained in problem solving, but also a number of individuals trained in corporate efficiency and optimization.