When it comes to using new technologies, restaurants usually fall behind. However, the epidemic pushed chains to adopt innovations fast. Restaurants nowadays are using artificial intelligence and business intelligence to fuel their systems, which is drastically altering how they serve customers and manage their restaurant operations

With an expected 5.83% annual growth rate, the business intelligence software market is expected to reach $34.16 billion in market volume by 2028.

Business users can access a variety of data types through BI tools, including unstructured data from social media and semi-structured data from third parties, as well as historical and current data from within the company.

BI tools offer comprehensive real-time visibility into a company’s operations so that restaurant owners can make decisions based on actual data, not on hunches or instinct.

Well, let’s dig into what BI really is, how it is beneficial for restaurant businesses, and how to get started with the right one and implement it. 

What is Business Intelligence? 

Although the phrase “business intelligence” has no universally accepted definition, its fundamental meaning is the application of existing data sets to improve decision-making and streamline processes. 

This could involve anything from monitoring key performance indicators (KPIs) to comprehending various business procedures to identifying innovative growth opportunities.

Business intelligence includes a variety of operations, including data mining, warehousing, and online analytical processing.

Whether they realize it or not, the majority of companies in today’s market employ business intelligence in some way. Business intelligence may include even basic tasks like monitoring sales figures or employee tracking.

How Business Intelligence Helps Restaurants? 

Business Intelligence (BI) is like a secret sauce that helps restaurants thrive in today’s competitive landscape. It’s all about harnessing the power of data to make smarter decisions and boost performance for your restaurant business. With BI, restaurant businesses can get all the data in one place and make data-driven decisions. 

Let’s dig in to find out the benefits and how top companies are using BI for their restaurant business. 

Optimization Employee Management 

Business intelligence saves you a lot of effort, which is one of its biggest features. not only when it comes to acquiring information, but also in decision-making. This is especially true in terms of restaurant business intelligence and scheduling.

For instance, employee auto-scheduling software compiles data on staff availability and projected demand for restaurants to create the optimal plan, accounting for expenses, overtime, legal requirements, scheduling, leaves, etc.

Information from many data sources is consolidated to assist restaurants in reducing costs in one of their main areas of expenditure.

Main Squeeze, a multi-location juice bar, discovered that they could easily monitor and manage labor expenditures using business intelligence technologies. 

Data reports and dashboards that emphasize everything from attendance to breaks to total labor expenditures, as well as peak-to-peak and slack times/seasons.

Having this data at your fingertips makes labor management easier and more cost-effective for your business. And, with labor expenditures accounting for around one-third of a restaurant’s revenue, make sure to grab all the possibilities to reduce it.

Chipotle Restaurant using BI 

The fast-casual fresh-Mex restaurant business from Newport Beach, California, was the first to take advantage of speech bots. In early 2018, the chain began testing artificial intelligence-powered voice assistants for phone orders. Customers can now contact any Chipotle and make an order using an AI bot.

Reduce food waste

With restaurant analytics, you can determine how much food is wasted in relation to client demand. This aids in maximizing the use of your inventory, preventing ingredient overordering, and cutting down on waste.

So, how does business intelligence fit into this picture?

If food is being wasted, BI will make sure that the source of the issue is identified and corrected immediately. Additionally, it helps in improving inventory management and optimization to cut down on waste.

If food is about to perish, use business intelligence to provide promotions on menu items containing these elements. It makes it more likely that customers will place these kinds of orders, saving the ingredients from going bad.

Also, you will also be getting real-time insights into what customers are ordering, so that you can manage your supplies later on! 

Accurate Reports & Real-Time Insights 

Business Intelligence (BI) software offers users reliable, up-to-date information that allows them to make more informed business decisions.

BI software allows users to track and analyze key performance indicators (KPIs), discover market trends, and find opportunities or areas for improvement.

For instance, if your business has been losing money, but you can’t pinpoint where or how – then BI tools come to the rescue. It helps you see and compare, where the expenses have increased and where you’re losing money so that you can take steps to fix the problem.

BI technologies generate real-time and reliable information, including sales, inventory consumption, labor management, and customer service. Plus, the restaurant owners will be getting all the information in a visually appealing and easily understandable format, to comprehend the data effectively and make informed business decisions. 

Improved Client Satisfaction 

One of the most significant benefits of business intelligence is its ability to increase client satisfaction. Customer happiness is critical for any business because it directly influences revenue and retention rates.

Businesses can examine client data from several sources and gain a more comprehensive understanding of their customer base by utilizing data analytics and business intelligence (BI) solutions.

Businesses may better serve their customers and match their specific expectations by optimizing their operations and gaining deeper insights into their consumption, preferences, behavior, and buying patterns.

For instance, you may instantly determine which menu items are profitable and well-liked. You’ll then have a menu that appeals to customers and maintains a healthy profit margin.

Starbucks has acquired millions of consumers’ individual transaction data through its widely used loyalty card program and smartphone application.

The business forecasts purchases using this data and BI technologies and then uses email and apps to provide personalized offers based on what customers are most likely to appreciate. This approach boosts sales volumes by bringing in existing consumers more regularly to the stores.

Plus, you will have insights on peak customer time, to manage your schedules accordingly and ensure the best-in-class customer satisfaction. Additionally, BI tools can also be used to track customer feedback and generate real-time reports on customer sentiment.

Beneficial for Marketing 

To sustain and thrive in this competitive market – especially for restaurant businesses, Business Intelligence (BI) tools play a crucial role in enhancing marketing strategies for restaurant businesses.

These tools offer valuable insights that help restaurant businesses make the right decisions when it comes to marketing, campaigns, and putting their best foot forward to attract and engage customers and also retain them.  

• Data-Driven Decision Making: BI tools provide actionable insights derived from analyzing vast amounts of data, helping marketers make informed decisions to optimize campaigns and strategies. For instance, analyzing customer data can reveal trends and preferences, guiding menu offerings and promotional efforts.
• Customer Segmentation: BI tools allow for the segmentation of the customer base based on various factors such as demographics, behavior, and preferences. This enables targeted marketing campaigns tailored to specific customer segments, increasing engagement and conversion rates. 
• Campaign Performance Tracking: BI tools enable real-time monitoring and tracking of marketing campaign performance, including metrics such as click-through rates, conversion rates, and ROI. This helps marketers assess the effectiveness of different channels and campaigns, optimizing resources and strategies accordingly. For instance, analyzing the performance of email campaigns can reveal which subject lines or content resonate best with recipients, informing future email marketing efforts.
• Social Media Monitoring: BI tools allow for the monitoring of social media channels to track what users want, what they like, insights on influencer marketing, engagement, hashtags, etc. 
• Competitor Analysis: BI tools facilitate competitive analysis by monitoring competitors’ pricing, promotions, and marketing strategies. It helps restaurants to identify market trends, benchmark performance, and capitalize on opportunities for differentiation. 
• Predictive Analytics: BI tools with predictive analytics capabilities enable forecasting of future trends, customer behavior, and market demand. It helps restaurant businesses to anticipate shifts in the market and proactively adjust strategies to capitalize on opportunities. For instance, predictive analytics can forecast demand for specific menu items during peak hours or seasonal events, informing inventory management and marketing efforts.

Helps with Menu Engineering & Pricing Management 

Business information is the key to increasing your restaurant’s profit margins.  

Food suppliers are among the most expensive items in a restaurant, second only to labor. In today’s competitive environment, proper menu engineering and regular analysis are critical to keeping your products unique, customers delighted, and your restaurant successful.   

Business analytics assists you in identifying your restaurant’s moneymakers and profit-killers. You can view which menu items are most useful to your restaurant, which require price increases/cost reductions, and which should be terminated from the menu to curate a favorable menu – these data help you record higher profit margins on a larger scale. 

The upside: When you choose the best business analytics tool, you will get the data in a visually appealing and easily consumable manner(such as graphs, charts, and real-time dashboards. It helps understand what’s happening and make decisions promptly. 

Knowing the profit margins for each item and the right menu selection boost customer satisfaction, which helps each restaurant price items accurately. It is quite good for your customers’ pockets and they will come back for more. This way, you can also make better decisions about specials, bundle offers, discounts, etc. Business information is the key to increasing your restaurant’s profit margins.    

Improved supply chain management and Logistics management! 

Business Intelligence (BI) tools are like a trusty navigator for seamlessly managing supply chain and logistics for your restaurant business.

With the BI tool, you can get all the essential insights that optimize inventory management, streamline procurement processes, and ensure timely delivery of ingredients and supplies – that leads to efficient operations, enhances customer satisfaction, and improves the bottom line.

For instance, imagine a restaurant using BI to analyze data on supplier performance, inventory levels, and delivery times. With this information at hand, they can make informed decisions about sourcing, ensuring they work with reliable suppliers who consistently meet their needs.

This might mean choosing a supplier known for their prompt deliveries of fresh produce or negotiating better terms based on historical data. 

One smart tip for leveraging BI in supply chain and logistics is to establish key performance indicators (KPIs) to track and measure success.

By defining metrics such as on-time delivery rates, inventory turnover ratios, and supplier satisfaction scores, restaurants can assess their performance and identify areas for improvement. 

Helps with cross-selling, up-selling, and customized promotions 

For restaurants, boosting the average customer value and customer retention is more than important. Well, the BI tool helps in managing cross-selling, up-selling, loyalty programs, targeted discounts, and other relevant initiatives for restaurants, driving customer engagement and boosting revenue.  

For example, a restaurant using BI might analyze customer purchase history to identify opportunities for cross-selling complementary items, such as offering fries with a burger or suggesting a dessert after a main course.

According to a study by McKinsey, restaurants that effectively implement cross-selling and up-selling strategies can increase revenue by up to 30%. 

Additionally, BI enables restaurants to personalize marketing efforts and loyalty programs based on customer preferences and behavior, fostering repeat business and enhancing customer loyalty.

By leveraging BI insights, restaurants can tailor promotions, discounts, and rewards to target specific customer segments, driving higher conversion rates, and customer retention and maximizing the return on marketing investments.

BI for Online Ordering Management 

Online ordering is on the rise and how! With these growing conveniences, customers want to order and enjoy from the comfort of their homes(well, most of the time).

But, now since most of the restaurants are adopting it and you need to do it as well, then it is important for you to manage it all effectively. 

And, Business Intelligence (BI) can help you streamline online ordering management in restaurants. By tracking and analyzing real-time order data, understanding customer behavior patterns, optimizing menus, managing inventory effectively, monitoring performance metrics, measuring promotion effectiveness, forecasting demand, and segmenting customers, BI tools empower restaurants to deliver a seamless online ordering experience.  

To make the most of BI in online ordering management, restaurants can:

• Regularly analyze customer feedback to identify areas for improvement and refine the online ordering experience.
• Use predictive analytics to anticipate demand spikes and ensure adequate inventory levels.
• Implement automated alerts for inventory replenishment to prevent stockouts and delays in order fulfillment.
• Continuously monitor key performance indicators (KPIs) to track the success of online ordering initiatives and identify areas for optimization.

Optimize your Restaurant Operations! 

Streamlining your restaurant business operations is quite important. Optimizing restaurant operations involves managing table turnover, fast customer service, inventory, and kitchen efficiency. 

Business Intelligence (BI) tools simplify this by providing insights and strategies based on data analysis. For instance, BI helps restaurants understand peak hours that guide restaurant owners in managing the seating, food preparation, managing staff, and other things. 

It also tracks order processing times and kitchen workflows to ensure quick service. BI analyzes sales data to optimize inventory levels, preventing shortages or wastage.

By streamlining operations with BI, restaurants can provide better service, minimize costs, and keep customers happy. And, in these digital, competitive times – minimizing cost, improving profits, and boosting customer satisfaction for long-term sustainability and retention is quite important. 

Best Practices of Choosing & Implementing the Right BI Platform for Your Restaurant Business! 

There are indeed various advantages of leveraging the BI platform for your restaurant business, but only when you choose the right platform(that is targeted towards your specific business needs, solves your problems, provides the required insights( and is also in your budget. Even after choosing the work is not over yet – you need to implement it and set realistic goals to make a difference. 

Nevertheless, to help you make a favorable decision, here’s a simple checklist that might help you out: 

1. Define clear objectives: 

Instead of just aiming to “increase profitability,” specify actionable goals like “reduce food waste by 20% within six months” or “improve table turnover rate by 15% by optimizing staff schedules.” Setting clear objectives right from the start helps you choose the right platform and also provides a roadmap for your BI strategy and makes it easier to measure success.

2. Choose the right BI tools with AI: 

Look for BI platforms that incorporate artificial intelligence (AI) capabilities for advanced analytics and predictive insights. For example, a BI tool with AI-powered demand forecasting can help you anticipate shifts in customer demand and adjust inventory levels accordingly, minimizing stockouts and reducing waste.

3. Collect relevant data: 

Beyond basic sales data, consider gathering insights from sources like online reviews, social media mentions, and customer feedback surveys. For instance, analyzing sentiment from online reviews can reveal trends in customer preferences and identify areas for menu improvement. With these crucial insights in place, you can make the improvements(that your restaurant business needs). 

4. Centralize data storage: 

Invest in a robust data warehouse solution that can handle the volume and variety of data generated by your restaurant in one place. When you have all the business data available in one place, you can make business decisions with ease and utmost convenience. 

5. Don’t forget the Integrations: 

Your BI platform wouldn’t get all the data on its own. You need to integrate it with the platforms that you are currently using or planning to incorporate in the near future. It includes your POS software, inventory software, account software, online website or app, or both, third-party online food delivery apps, social media channels, customer feedback channels, etc. So, while choosing the BI platform for your business, you need to consider the integration part. Even after getting, the end-to-end integrations that can help you provide a clear & border picture is important. 

6. Customize as per your requirements: 

Customization is at the core of every business, nowadays. So, when choosing the platform – you need to make sure it is tailored to your business needs and be customized as well. Customize the features, and configurations and also tailor dashboards to the specific needs of different roles in your restaurant. 

For instance, a manager might benefit from a dashboard that highlights sales trends and labor costs, while a chef might prefer a dashboard that focuses on ingredient usage and menu performance. So, make the right required right from the start, to ensure ease of use and also keep it updated. 

7. Implement predictive analytics: 

As the times are changing and tech is expanding, predictive analytics works as a smart assistant for businesses as a whole. So, for your restaurant business, make sure you choose the platform with predictive capabilities – that can guide you on what to do based on the available data. For instance, analyzing historical sales data alongside external factors like weather patterns can help you anticipate slow days and adjust staffing levels accordingly.

8. Enable real-time monitoring:

Improving digital dynamic calls for real-time updates & monitoring. So, implement real-time monitoring tools to track key metrics like table occupancy rates, kitchen wait times, inventory, online reservation bookings, etc. This allows you to identify bottlenecks in real time and make immediate adjustments to improve customer satisfaction.

9. Ensure data security and compliance: 

Last but not least and also very important. Never ever compromise on security and compliance. Make sure you prioritize data security and compliance with regulations like GDPR or CCPA to protect sensitive customer information. Choose BI platforms with robust security features, such as encryption and access controls, to safeguard data against unauthorized access or breaches.

Bonus Point: Invest in Staff Training & Update Time-to-Time! 

While choosing the BI tool, check if it is easy to use for you & your staff to leverage its benefits to the fullest Also, provide comprehensive training on BI tools and data analysis techniques to empower your staff to leverage data-driven insights in their daily decision-making. And, don’t just stop there. You also need to continuously evaluate the effectiveness of your BI implementation and iterate based on feedback(from employees and customers) and performance metrics. 

To Conclude 

We’ve wrapped up everything you need to know about optimizing restaurant operations using Business Intelligence (BI), from understanding the basics to exploring key features and making informed decisions.

We hope this blog has helped you get to know about what BI actually is, how it is helping businesses(especially restaurant businesses at the core), and how to choose and implement accurate tools for your business. 

Now, if you’re seeking the ultimate AI-powered data tool to revolutionize your operations, Livelytics is the answer. It’s not just about collecting data; Livelytics offers predictive analytics and actionable suggestions tailored to your restaurant’s unique needs. Don’t take our word for it—schedule your demo today and find out for yourself how Livelytics can streamline your operations, drive efficiency, and propel your restaurant toward success.

We are looking forward to hearing back from you!