When a session opens with talk of the panelists squaring off for a cage match, chances are the participants have a feeling or two about the topic. Yet the opening event at FSTEC ended with nary a fist being clenched. On the question of whether buying technology makes more sense for restaurants than building it themselves, five chain executives quickly reached a harmonious consensus: The best course is doing both.
Not that they started out in agreement. The group participating in the opening session, billed as Buy vs. Build, was stacked to bring their differing perspectives into contrast, if not outright conflict. Two of the participating tech execs identified themselves as being pro-build, two as Team Buy, and a fifth as more neutral than Switzerland.
The co-moderators-- Joanna Fantozzi and Joe Guszkowski, the tech editors, respectively, of Nation’s Restaurant News and Restaurant Business—were equally as biased. Fantozzi led the pro-building debaters, while Guszkowski skippered the buying-is-best squad.
They took their respective teams through the reasons for their convictions. The advocates of building a tech stack stressed the flexibility that approach affords, and how it allows you to address the peculiarities of your brand. Papa Johns, for instance, needed to support a hybrid delivery model where the chain uses both its own employees to deliver pizzas and independent third parties. The complexities necessitated that the chain engineer its own ordering system, said Sarika Attal, the franchisor's VP of enterprise architecture, tech services & store platforms.
“How many of you like to customize your pizza?” she asked as a forest of hands shot up in the audience. It’s the same with tech, she asserted.
Chris Padilla, VP of brand technology for Applebee’s parent Dine Brands and the neutral member of the panel, didn’t dispute that contention.
When the holding company started building its current tech stack, “We wanted to have the flexibility to build a customer experience,” he explained. “We saw great benefits to that.”
But, he added, “at the same time, we didn’t want to be in the driver’s seat of building an e-commerce platform from the ground up.” The expenditure of money and time just didn’t justify the investment, he suggested.
Indeed, the biggest reason to buy rather than build is to save resources, particularly money, said Shaina Himelstein, director of operations excellence and technology for Brooklyn Dumpling Shop, an upstart that prefers to buy technology. “It’s a way for us to reduce costs while utilizing your resources in the best way possible,” she explained.
But as Himelstein acknowledged, “Price definitely matters, but too often people use price as the only thing that matters.” Savings on the investment have no value if the tech doesn’t work as intended. Plus, “At the end of the day it’s going to be more expensive to choose a new vendor after making a mistake with the first vendor.”
If you do buy rather than build, be sure you’re choosing a supplier who’ll be a partner, not a vendor who’ll be done with you once the deal is consummated. Picking the right collaborator can provide the same sort of aligned objectives you’ll get from building a stack in-house.
“We want to be sure we can grow with that partner and not have to find someone else” down the road, said Jeff Douglas, CIO of the Potbelly sandwich chain. “A lot of it is relationship. And not just one-to-one relationships, but the company-to-company relationship.”
As the panelists recounted examples of adding tech, it became apparent that none of the participating brands relied wholly on homegrown equipment, and none plugged in systems right off the shelf. Rather, they started to acknowledge, they use a combination of the approaches.
“A lot of times we apply a very simple principle,” commented Brooklyn Dumpling’s Himelstein. “’Buy for consistency, build for differentiation.’”
Her comments drew nods of agreement from her fellow panelists, who exited the stage without a punch being thrown.
FSTEC is a three-day panel focused exclusively on restaurant technology. This year's event is being held this week at the Gaylord Texan in the Dallas suburb of Grapevine. It is presented by Informa, the parent company of Restaurant Business and Nation's Restaurant News.
Correction: An earlier version of this story misstated the title for Papa Johns' Sarika Attal. She was given a new position last week, according to the company.
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