© 2008 CORNELL UNIVERSITY

DOI: 10.1177/1938965508322768
Volume 49, Issue 3 297-309

The Role of
Technology in
Restaurant Revenue
Management
by SHERYL E. KIMES

Technology systems can support restaurant man- Keywords: restaurant management; revenue man-
agers’ efforts to improve sales and profits through agement; table management systems;
revenue management. By subdividing a meal into its kitchen display systems; handheld
component sections, a manager can determine ordering systems
which systems to apply at a particular stage for the
purpose of providing the greatest revenue benefit for
a particular restaurant. In adopting technology, man-

A
ppropriate technology, when used in conjunc-
agers must first conduct a financial analysis to deter- tion with revenue management principles,
mine whether the technology’s cost will be more
can help restaurants of all types increase rev-
than offset by revenue improvements. If that financial
enue and profit. In the United States alone, table ser-
calculation is favorable, management must then con-
sider benefits to both employees and customers and vice restaurants account for approximately $180
must also take into account employees’ and cus- billion per year in revenue (National Restaurant
tomers’ perceptions of the technology’s utility and Association 2006). If these table service restaurants
ease of use. Without those elements in place, the can achieve the 2 to 5 percent revenue improvement
technology faces dim prospects no matter what its typically associated with the adoption of revenue
prospective financial benefit. management (Hanks, Noland, and Cross 1992;

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Smith, Leimkuhler, and Darrow 1992; 1998; Kimes et al. 1998). Duration man-
Kimes 2004a), overall revenue could agement requires control and knowledge
increase by $3.6 billion to $9.0 billion per of when customers arrive, how long they
year. Correctly implemented, technology stay, and when the table becomes available
can more than offset its cost with for the next party. If meal duration can be
increased revenue. Technologies that sup- reduced during busy periods, more cus-
port restaurant revenue management range tomers can be served and revenue can be
from relatively simple credit card process- increased. At the same time, however,
ing systems to elaborate table manage- duration control must be approached care-
ment and kitchen production software. fully because rushing customers may
In this article, I discuss how restaurants impair their satisfaction. The duration of a
can apply technology to the dining experi- meal, which includes the entire time that
ence and achieve both increased profits the table is in use, can be managed by con-
and customer satisfaction. Focusing trolling guest arrival, meal duration, and
chiefly on table-service restaurants, I first table turnover.
provide an overview of revenue manage- Managing guest arrivals requires the
ment with a particular emphasis on the ability to predict when customers will
customer dining experience. I then discuss arrive. Restaurants can manage arrivals
the benefits of using technology for both both internally (by means that do not
customers and restaurants and review how directly involve customers) and externally
technology can be used in each phase of (by mechanism that do directly involve
the dining experience. I conclude with an customers). Common internal arrival-
overview of issues that must be addressed management strategies include improving
for successful application of technology to the accuracy of arrival forecasts, tightly
the dining experience. The intent of this managing the customers’ waiting times,
article is to provide a framework for developing overbooking policies that max-
assessing the effect of technology on meal imize table use but minimize delayed or
duration and restaurant revenue. denied seating, and setting strategy for
how and where parties should be seated.
Revenue Management External arrival techniques include
Revenue management has been widely reminding customers of their reservations
adopted in the airline, hotel, and rental by phone or e-mail, or requiring deposits
car industries (Carroll and Grimes 1995; or guarantees on reservations.
Hanks, Noland, and Cross 1992; Smith, The objective of duration management
Leimkuhler, and Darrow 1992) but has is to reduce variability in customer dining
only gained attention in the restaurant times and, if necessary, to reduce the
industry in the past ten years (Kimes et al. length of the meal. Like arrival manage-
1998; Kimes 2004a, 2004b; Kimes and ment, duration can be managed both inter-
Thompson 2004, 2005). Companies using nally and externally. Internal approaches
revenue management have reported rev- revolve around streamlining the service
enue increases of 2 to 5 percent (Hanks, process (including ordering, meal prepara-
Noland, and Cross 1992; Kimes 2004a; tion, and check delivery and processing),
Smith, Leimkuhler, and Darrow 1992). while external approaches include giving
Revenue management is activated by customers control over the pace of their
the following two strategic levers: dura- meal and giving them signals that the meal
tion control and pricing (Kimes and Chase is nearing an end.

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Turnover management involves reduc- varies according to the stage of the meal
ing the amount of time between the end of and the type of restaurant. In casual and
one party’s meal and the beginning of the upscale casual restaurants, customers pre-
next. Anything that can be done to reduce fer a faster pace during the preprocess and
turnover time and speed the process postprocess stages but a slower pace dur-
(either by notifying bussers that it is time ing the in-process stage (when they are
to clear the table or letting hosts and host- actually dining). Customers at fine-dining
esses know that the table is ready) should restaurants prefer a relatively slow pace
increase revenue during busy periods. throughout the meal (Noone and Kimes
While price management is extremely 2005; Noone et al. 2007).
important to the success of revenue man- Based on this research, restaurant man-
agement, the focus of this article is on how agers should (1) focus their duration-
technology can be applied to better man- reduction efforts on the postprocess stage,
age the duration of customer’s meals, (2) consider ways to reduce duration
increase revenue, and increase customer during the preprocess stage, (3) avoid
satisfaction. duration-reduction strategies during the
in-process stage, (4) consider giving cus-
The Dining Experience tomers control over the pace of their meal,
The customer dining experience con- and (5) recognize the importance of main-
sists of six main components (see Exhibit taining a consistent pace throughout the
1): meal (Noone and Kimes 2005).

1. Prearrival: from when customers Technology and the

decide they want to come to the
restaurant until they arrive at the
Dining Experience
restaurant
Technology comes at a cost, but it can
2. Postarrival: from when customers
also lead to increased revenue and profit.
arrive at the restaurant to when Before adopting a particular technological
they are seated system, a restaurant operator must assess
3. Preprocess: from when customers potential benefits to customers and to the
are seated at the restaurant until restaurant and compare these benefits to
they receive their first food order the cost of the system. Potential customer
4. In-process: from when they receive benefits are improved customer conve-
their order until they request payment nience and increased control, while poten-
5. Postprocess: from when they request tial benefits to the restaurant are increased
payment until they leave the speed of service, reduced processing costs,
restaurant increased volume and revenue, and
6. Table turnover: from when customers improved service and food quality.
leave until the table is reseated
Benefits to Customers
Studies have been conducted on how
long customers think dinner should last Improved convenience. Service conve-
(Kimes, Wirtz, and Noone 2002) and on nience is related to customers’ desire to con-
the impact of pace on customer satisfac- serve their time and effort. An increase in
tion (Noone and Kimes 2005; Noone et al. convenience is associated with an increase
2007). Looking at the effect of pace, cus- in satisfaction (Berry, Seiders, and Grewal
tomers’ reaction to changes in pacing 2002). Restaurants can use technology to

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INFORMATION TECHNOLOGY THE ROLE OF TECHNOLOGY IN RESTAURANT REVENUE MANAGEMENT

increase access convenience (by making it Benefits to the Restaurant

easier for to place a food order or make a
reservation), transaction convenience (by Service speed. In general, if service speed
reducing customers’ waiting time), and ben- can be accelerated, more customers can be
efit convenience (by better managing the served. Depending on the stage of the meal,
pace of the dining experience). customer satisfaction can be enhanced by
Increased control. When customers increased service velocity, as should revenue
perceive that they have substantial con- (at least during periods of high demand). As
trol over a service encounter, they are a simple example of a seemingly small
more likely to be satisfied with that reduction in service time, a restaurant that
encounter (Averill 1973; Hui and could serve 400 customers in its 4-hour rush
Bateson 1991; Hui and Tse 1996; period would earn $4,000 if it had a $10
Langer 1983). The following three types average check, 100 seats, and a 1-hour turn-
of perceived control have been pro- around. If the average dining time could be
posed: behavioral, cognitive, and deci- reduced by 5 minutes to 55 minutes, the
sional (Averill 1973). potential number of customers served would
Customers have behavioral control increase to 436 (240 minutes/55 minutes ×
when they can directly influence or 100 seats) and the potential revenue would
modify what happens to them (Hui and increase to $4,360, an increase of 9 percent.
Bateson 1991). In restaurants, customers Of course, this estimate is theoretical. As dis-
can exert behavioral control by choosing cussed in an article elsewhere in this issue
the time they eat, by minimizing their (Thompson 2008), a simulation of actual
wait, or by choosing their desired table. revenue increases from a reduction in dining
Cognitive control is related to the pre- duration demonstrates an increase of about
dictability and interpretability of a situa- 25 percent of this estimated amount. That
tion. Research has shown that providing said, a 2.25 percent increase in revenue is
guests with supplemental information still substantial.
(such as the likely length of their wait) Technology can speed service by reduc-
leads to a more positive evaluation of the ing the order-taking time (through the use of
service. If restaurants can provide accu- preorders or handheld devices), advancing
rate wait time estimates, they will give food production (through the use of kitchen
customers heightened cognitive control. display systems), tightening service time
Finally, decision control concerns the (through the use of table management sys-
control that a customer has over the tems, or TMSs), shortening payment time
selection of outcomes and goals. For (through handheld devices), and cutting
example, in restaurants, customers who turnaround time (through the use of commu-
have to wait to be seated can choose to nications technology and TMSs). While
stay at the restaurant, leave and return, faster service will almost always lead to
or just leave and find other dining improved customer satisfaction in quick-
options. Paging systems give customers service restaurants and fast casual restau-
more decisional control because in many rants, it must be managed carefully in casual,
cases (particularly with cell phone upscale casual, and fine dining restaurants,
pagers), customers have the freedom to so that customers do not feel that they are
leave the restaurant and return after being rushed (Noone and Kimes 2005;
being paged that their table is ready. Noone et al. 2007).

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Reduced processing cost. Technology and reduce the amount of time customers
can also help to reduce labor costs. When must spend at the restaurant. I discuss the
online and off-site reservations and orders technology for each stage of the dining
are taken or when kiosks and other self- experience below.
service approaches are used to assist with
ordering and payment, labor costs for Prearrival Stage
reservations and order-receiving functions
will decrease. During this stage, restaurant operators
Increased volume and revenue. Making should focus on making it easier for cus-
the restaurant more accessible to cus- tomers to order their food or make a
tomers, whether through online reserva- reservation, depending on the type of
tions or ordering, will attract more restaurant. While this almost goes with-
customers and result in higher revenue. out saying, I must point out that any tech-
More than half (59 percent) of restaurants nology adopted for this phase should be
using online reservations and online order- integrated with current computer systems
ing have seen sales increase as a result so that any necessary information (such
(Lang 2006). An important benefit here is as a reservation or food order) can be
that many online reservations are made transferred to the appropriate system and
during periods when restaurants are not persons.
normally open (Layton 2006; Ross 2006), Preordering. Preordering of food
which means that the restaurant is most (whether done online or over the phone)
likely capturing business it might not oth- gives customers more control over their
erwise receive. time by allowing them to select their food
Improved service and product quality. before arriving at the restaurant. Online
Appropriate use of technology can also ordering helps restaurants by providing
help a restaurant provide better and more an additional distribution channel (cus-
consistent service to its guests. Research tomers may order just because it is easier),
has shown that an increase in perceived provides more opportunities for consis-
service and product quality leads to an tent upselling, and gives restaurants the
increase in customer satisfaction and opportunity to streamline production
profit (Rust, Zahorik, and Keiningham since they have time to prepare the food
1998). Table management and communi- before customers arrive at the restau-
cations systems can help restaurant opera- rant—regardless of whether they dine in
tors provide more consistent service to or take their food out. Obviously, to work
guests and can also help improve manage- well, these systems need to be tightly
rial control of the meal experience. integrated with the point-of-service (POS)
system so that the order is ready at the
The Role of Technology specified time (Webb 2006).
in the Dining Experience Online ordering systems have been
Depending upon the stage of the meal, growing in popularity. In a survey of
different types of technology can be casual and fine dining restaurants, Lang
employed to help manage the customer (2006) found that 38 percent of the restau-
dining experience (see Exhibit 2). For rants surveyed take food orders online.
example, in the prearrival stage, online Websites that offer online ordering include
reservations and online food ordering can Webfood.com, waiter.com, delivery.com,
be used to increase access convenience and foodjr.com.

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Certain casual restaurants, Outback and (for example, OpenTable estimates that 50
Applebees, for example, have imple- percent of its reservations are incremental
mented curbside service, which allows reservations [Randall Reeves, personal
customers to call and place their order communication, 2007]) and provides the
for curbside pickup at a specified time. restaurant with no-show data, marketing
Approximately 10 percent of casual opportunities, and in some cases an elec-
restaurant sales come from curbside ser- tronic reservations book and a TMS.
vice (Krummert 2003; Hellmich 2005; Other reservations systems. Another
Warner 2006). Curbside service allows approach to automating the reservation
restaurants to prepare orders ahead of time process allows restaurant operators to create
but, if not properly managed, can cause an electronic reservation book. Companies
undue load on the kitchen. A variety of that support this approach, including
curbside applications are available includ- JTech (HostAlert) and NTN (ProHost),
ing those provided by Long Range provide software either for reservations or
Systems, Techknow, and QTime Solutions. for call-ahead seating. When customers
contact the restaurant or a call center to
Reservations make their reservation, the restaurants can
track reservations and availability and also
Most fine-dining restaurants and about collect additional guest history informa-
one-third of casual restaurants take reser- tion (such as special events such as birth-
vations (Kimes and Wirtz 2007), tradition- days and anniversaries, seating preferences,
ally handled by an employee at the food preferences, and no-show history).
restaurant. That familiar approach main-
tains the personal touch, but it is some- Postarrival Stage
times inconvenient for customers because
someone is not always at the restaurant, it Restaurant operators can control the
can be difficult getting through at times, postarrival phase by managing the waiting
and the person answering the phone is not and seating process. If managed well,
always trained appropriately. Technology customers’ waiting time will be brief or at
can be used to facilitate online reserva- least predictable. Either way, customers
tions and to provide electronic manage- feel that they have reasonable control over
ment of reservations. their dining experience. In addition, tight-
Online reservations. Such sites as ening the wait time will lead to an increase
opentable.com, dinnerbroker.com, guest- in transaction convenience.
bridge.com, and restaurantrow.com offer To achieve those postarrival goals,
free online reservations for customers. managers must track when tables become
Online reservations allow customers to available, specify accurate wait times,
quickly make a reservation at unfamiliar notify customers when their table is
restaurants (Layton 2006) and also to available, and ensure that guests are
make a reservation whenever they would seated at the right table. The criteria for
like. (Opentable.com estimates that 25 the “right table” involve the table that
percent of reservations are made between best fits the party, the table that least
10:00 p.m. and 10:00 a.m., hours that interferes with seating other parties, the
restaurants are not typically open). In table the customer prefers, or the table in
addition, online reservations give restau- the appropriate server station (McGuire
rants an additional distribution channel and Kimes 2006).

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Restaurants should be cautious in assign- especially when the floor layout means
ing duties to hosts and hostesses beyond that parts of the restaurants are not in clear
keeping track of tables and arrivals. Such sight and the host or hostess is relatively
duties as seating, answering the phone, inexperienced (Techtonics 2006).
and retrieving takeout orders may not
interfere with the job during slow periods, Communication Systems
but adding those responsibilities can prove
problematic during busy periods if they Rather than have customers wait in a
interfere with seating the right party at the physical queue, most table service restau-
right table at the right time. rants have customers wait in the bar or a
If we think of the host or hostess as the designated seating area. Without an obvi-
restaurant’s revenue manager, this raises a ous queue, the question becomes one of
concern when that person is not one of the how to notify customers when their table
most experienced employees at the restau- is ready. Traditionally, the host has to find
rant. Lack of experience and knowledge the customer based on visual recognition.
can lead to giving inaccurate wait times, While this provides a personal touch, it
seating people at the wrong table (from a can slow the seating process (especially
revenue standpoint), and being unsure of when the host cannot find the guest) and
how to combine tables most effectively for requires the host to leave the stand. Many
revenue purposes. Technology can help restaurants can get around this with
alleviate this problem by helping hosts and speaker systems or a paging device (which
hostesses make the right decisions. vibrates or lights up when the table is
ready), but none of these systems is appro-
Table Management Systems priate in upscale restaurants.
Two sources of pagers are Long Range
TMSs can help the host or hostess see Systems and Jtech. Most pagers work as
which tables are available, the stage of the long as the customer is within a certain
meal for that table, which ones will soon be distance of the restaurant, meaning that
available, and which can be combined. In customers must wait either at the restau-
addition, TMSs include systems for tracking rant or somewhere nearby. To address this
reservations, walk-ins, and call-ahead par- problem, cell-phone-based paging systems
ties. Some TMSs develop wait time esti- such as Queuent.com, have been devel-
mates based on the number of people seated oped. These systems allows the restaurant
and the number of people waiting (some to call customers when their table is ready,
even track the accuracy of wait time esti- so that customers do not have to remain
mates) and suggest the correct table at near the restaurant while waiting. Many
which to seat the party. TMSs are available of these systems also allow customers to
from such vendors as Jtech, OpenTable, postpone their seating time by a certain
QSR Automation, and Reserveinteractive. number of minutes or notify the restaurant
Beyond managing guest seating, TMSs that they have decided to cancel their place
can help ensure that tables are equitably dis- in line (i.e., not dine at the restaurant).
tributed among servers and can provide
management with detailed performance sta- Preprocess Stage
tistics on dining duration, seat occupancy,
and wait time forecasting accuracy. TMSs Restaurants have two primary technolo-
are particularly useful in busy restaurants, gies available to help manage the preprocess

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stage: handheld ordering devices and com- Kitchen display systems. KDSs are used
munications systems. This equipment has in a number of casual restaurants, includ-
the potential to speed up the ordering ing Applebees, Smokey Bones, and
process by relaying orders from the server Chili’s. KDS vendors include Micros,
to the kitchen as they are being taken. QSR Automation, and Logic Controls.
Handheld order-taking devices are available KDSs can be used to help the kitchen
from various vendors (including PalmTeq, better manage orders and to ensure that
eWaiter, RCS, and Ingenico) and have been orders are prepared in a timely fashion.
used in a number of European restaurants Companies using these systems report a
and in some U.S. concepts, such as Seasons reduction in production time, an increase
52. Handheld order-taking technology is in kitchen volume, and a reduction in food
designed to reduce order time, to improve spoilage. These systems help restaurants
customer service by allowing servers to develop better control of when to prepare
spend more time with guests, and to provide and deliver menu items and help managers
guests with more detailed information on increase control of the consistency of both
the items that they are ordering. Many the menu item’s preparation and its associ-
restaurant operators and servers have been ated delivery. They can also be used to
resistant to handheld order-taking devices help develop better detailed menu item
because of the cost and the perceived forecasts (which in turn can reduce
decrease in personal service. To the con- spoilage) and to provide line cooks with
trary, if these devices are used to their best training and reminders on how to prepare
advantage, handheld order-taking technol- different menu items. When integrated
ogy can provide the potential for increased with a POS system and a TMS, KDSs can
upselling and be used to enhance the guest also provide better information with which
experience. Regardless of the order-taking to make wait time estimates (Richardson
approach the key to effective management 2004; Robinson-Jacobs 2004).
of this stage is immediately transferring Communications systems. Pager and
orders to the POS system, so that they are alert systems are equally useful for man-
quickly conveyed to the bar and kitchen for agers, employees, and guests. These sys-
preparation. When the order is ready, com- tems can be used to notify servers when a
munications systems such as pagers or table is seated, when the food and drink
headsets can be used to notify servers. orders are ready in the kitchen or bar, or
when there are potential problems in the
In-Process Stage kitchen; to notify managers when there
are potential problems in the kitchen or
The key to managing the in-process restaurant; and to notify bus staff and hosts
stage is to control the pace at which the when tables are ready to be cleaned and
meal is prepared and served and to stream- when tables are available to be reseated.
line any potential bottlenecks. Once the This is in addition to allowing guests to
food is on the table, care must be taken to page their server when they need addi-
ensure that guests feel neither rushed nor tional items or would like to pay the bill (a
delayed because of inefficient operations. guest pager system is available from ESP
Restaurants can use kitchen display sys- Systems).
tems (KDSs), the TMSs described above, Headphone and walkie-talkie systems
and communications and paging devices can work in a casual dining environment
for best control of the in-process stage pace. but may be seen as inappropriate on the

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restaurant floor in a fine-dining or upscale 1998; Kimes et al. 1998; Thompson

environment. Pagers (other than for 2008). As I mentioned above, TMSs and
guests) are much less obtrusive and can be communication devices can help notify
used to streamline the guest experience. restaurant staff when guests are near the
Communication systems are available end of their meal, and communication
from Long Range Systems, Jtech, and devices such as pagers and headsets can be
Queuent. used to alert bus staff to clear and reset the
table.
Postprocess Stage
Issues to Address
The postprocess stage is a logical point Even considering the benefits I have
to improve guests’ experience by tighten- discussed, the cost of technology is a
ing operations. Speeding up the payment major concern. Adding to the monetary
process can not only improve customer cost, implementation of technology and
satisfaction but can also reduce meal revenue management can result in con-
duration and allow additional guests to be flicts for both customers and employees
seated in busy periods (Noone and Kimes (Wirtz et al. 2003). Unless these conflicts
2005; Noone et al. 2007). The TMSs and are clearly addressed, most technology-
communications devices discussed above based revenue management efforts will be
can be useful in the postprocess stage unsuccessful.
as can handheld credit card processing
devices. Financial Analysis
European restaurants have used hand-
held credit card machines for a number of Revenue management technology can
years, but U.S. restaurant operators have be subjected to financial analysis by deter-
been slow to adopt the technology. With mining the value of increased business and
handheld machines, customers always comparing it to the cost of the technology.
have their credit card in sight, and these While such an approach does not include
machines also allow the restaurant opera- the intangible benefits of improved cus-
tor to speed up the transaction because the tomer satisfaction or enhanced customer
server does not have to travel to a far cor- control, it provides a starting point for
ner of the restaurant to swipe a card. Given assessing the investment.
the increased attention to credit card The analysis starts by tallying the
security (Sidel 2007; McQueen 2007), it number of hours per week when cus-
makes sense for restaurants to consider tomers must wait or when reservations
this technology. Devices of this type are must be denied. Next, an operator would
available from Verifone, Ingenico, and collect information on the average number
Hypercom, among others. of covers served per hour during those
busy periods, the average check per per-
Turnover Stage son, and the average table duration (the
time between when a party is seated and
Once customers leave the table, any- when the next party is seated). The theo-
thing that can be done to reduce the turn- retical annual baseline revenue per busy
around time during busy periods can lead hour can be calculated using the following
to increased revenue (Kimes and Chase formula:

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52 weeks × (no. of busy hours/week) aimed at decreasing meal and table dura-
× (average no. of covers served/hour)
× (average check per person) tion, increasing incremental business, or
__________________________________ increasing the average check. Again, while
Table duration (in hours) this sort of analysis does not capture the
Say that a 100-seat restaurant with 10 intangible benefits associated with technol-
busy hours per week served an average ogy adoption, it can provide a good starting
of 50 covers per hour during busy periods, point for analyzing the return on the invest-
had an average check per person of $20, ment. As pointed out earlier, a simulation of
and had an average meal duration of 60 the actual potential revenue increases from a
minutes. Its annual baseline revenue reduced dining duration demonstrates only
would be 25 percent of the theoretical estimates (see
Gary Thompson’s [2008] article in this issue).
52 weeks × (10 busy hours/week)
× (50 covers served/hour) × ($20)
______________________________ = $520,000 Customer and Employee Issues
(60/60)
As I said above, adoption of any new
Assume that the restaurant is considering technology or revenue management approach
the adoption of a handheld ordering system results in conflicts for both customers and
that will cost $10,000. Management esti- employees (Wirtz et al. 2003). Unless these
mates that this system will allow the restau- conflicts are clearly addressed, the imple-
rant to speed up check processing by 3 mentation of the technology may not lead to
minutes. If that estimate is correct, and the the desired result.
time saved is filled by additional covers, the Customer issues. Research on the adop-
restaurant’s new annual revenue during busy tion of customer-service-related technolo-
periods would be gies has shown that customers embrace
52 weeks × (10 busy hours/week) technology first and foremost when it
× (50 covers served/hour)×($20) actually works (Meuter et al. 2000; Bitner,
_______________________________ = $547,368
(55/60) Ostrom, and Meuter 2002). Utility is key
to customer acceptance. Successful tech-
The annual incremental revenue would be nology can (1) help customers out of an
$27,368. awkward situation (i.e., customers can
Clearly, the entire amount of this rev- order their food online and pick it up on
enue would not flow to the bottom line the way home from work and not have to
because of the incremental food and labor worry about getting their children out of
costs involved. Assume that the restaurant the car) and (2) save them time and money
has a flow-through rate of 50 percent (i.e., or provide them with better access to the
50 percent of incremental revenue flows to company (i.e., if the check processing time
the bottom line). This would reduce the is reduced or if customers can make reser-
incremental contribution to $13,684. With a vations whenever they want). On the other
cost of $10,000 for the technology, this hand, customers have no patience for tech-
means that the investment would pay for nologies that fail to operate as advertised,
itself in less than nine months ($10,000/ that cost them more time, that are poorly
$13,684 = 0.73 years). Provided that the designed, or that are not well supported.
technology decreases denied reservations So not only must one educate customers
and seating, similar analyses can be done on how to use the technology, but it is essen-
for other technologies, whether they are tial that the technology be as foolproof as

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possible. Finally, at the beginning of the alternative ways of performing the

implementation, alternatives to the tech- task, preferably the approach that
nology should be available for technopho- guests have always used (Ford and
bic customers. Heaton 2001). Even with online reser-
Companies adopting technology that vations, some customers will prefer to
will affect customers are advised to do the call the restaurant. Likewise, some
following (Bitner, Ostrom, and Meuter 2002): customers may like using a handheld
credit card machine because of the
1. Be clear on the strategic purpose of the increased security, but others may feel
technology. Understand why the uncomfortable with it and may prefer
restaurant is adopting the technology, to have the payment processed in the
whether to increase revenue, to reduce traditional manner.
labor costs, to increase customer satis-
faction, to streamline meal prepara- Employee issues. The two most impor-
tion and delivery, or to save time. tant factors that affect acceptance of a
2. Maintain a customer focus. If the tech- work-related technology are perceived
nology is to be successful, operators usefulness and ease of use (Davis 1989;
must concentrate on how guests can Venkatesh et al. 2003). Perceived useful-
benefit from the use of the technology. ness relates to employees’ view of how the
Will it give customers more control technology will enhance their job perfor-
over their experience? Will it increase mance. For example, if a server realizes
customer convenience? Will it help the that he or she can make more tips by being
restaurant provide better service? able to serve more customers because of a
3. Actively promote the use of the technol- reduction in dining time, he or she is much
ogy and educate customers on how to more likely to be in favor of the technol-
use it. In most cases, a quick demon- ogy. Similarly, if hosts and hostesses see
stration will suffice to explain how a that a table management system will allow
new device works. Once guests get them to quote a more accurate wait time,
used to the technology, further demon- they will appreciate the technology
strations will be unnecessary; but it is because their job will be much more pleas-
important to provide the necessary ant and guests will be happier.
support until customers become com-
Perceived ease of use involves employ-
fortable with the technology (Ford and
ees’ assessment of the system’s conve-
Heaton 2001).
nience and ease of use. For example, if
4. Prevent and manage failure.
line cooks find that a kitchen display
Operators should make sure that the
system makes it easier to track which
system is well tested, that employees
are well trained on how to use the
orders are up or provides information on
system, and that backup or alterna-
how to prepare a new menu item, they are
tive systems are available in case of more likely to accept such a system. If
failure. For example, if the network bussers find that communication systems
supporting handheld credit card make it easier to know when tables should
machines goes down, the restaurant be cleaned and reset, they are more likely
needs to have some sort of backup to want to use those systems.
method of processing payments. Note that these aspects of success hinge
5. Offer choices. Because some cus- on employees’ perceptions of the technol-
tomers may prefer not to use the tech- ogy. Consequently, I suggest that manage-
nology, restaurants should provide ment not only provide technical training on

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INFORMATION TECHNOLOGY THE ROLE OF TECHNOLOGY IN RESTAURANT REVENUE MANAGEMENT

how to use the technology but also empha- transaction speed, and customer satis-
size its utility and ease of use. In addition, faction in quick-service restaurants.
front-of-house employees need to be trained
As with any operational improvement,
on how to explain the technologies to guests
the costs associated with technology adop-
and, when appropriate, provide guidance on
tion must be balanced with the potential
how to use the technology.
benefits. In addition, the effects on cus-
Conclusion tomer and employee satisfaction must be
carefully assessed. That said, the revenue
Technology can be a valuable adjunct to
potential associated with the appropriate
a restaurant’s revenue-management-based
adoption of technology is considerable.
drive to achieve greater profitability.
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