The News: While typically associated with large enterprise organizations, smaller restaurant and hospitality companies are seeing significant benefits by implementing enterprise resource planning (ERP) software, helping leadership and operational teams improve efficiency and streamline operations, support customer loyalty programs and initiatives, manage backend inventory and supply chain processes, and handle compliance with regulations.
I spoke with Oracle NetSuite and one of its restaurant-industry customers, Hofman Hospitality Group, to better understand the key criteria required by these customers, and how NetSuite was able to meet these requirements. You can read additional details about NetSuite’s restaurant-focused ERP offerings on the Oracle website.
Flexibility, Functionality, and Scalability Underpin Oracle NetSuite
Analyst Take: Restaurant and hospitality businesses are turning to Oracle NetSuite to increase productivity, expand visibility, and improve decision-making. I spoke with Mike Smith, Master Industry Solution Advisor, NetSuite, to learn about the features of NetSuite that appeal to restaurant operators, and Chris Crawley, CFO, Hofman Hospitality Group, to learn how his organization is using the NetSuite platform.
Using ERP to Drive Efficiency and More Streamlined Operations
One of the primary challenges faced by restaurants revolves around integrating information from various departments such as front-of-house, back-of-house, inventory, accounting, and HR, eliminating data silos and manual effort. An ERP system can be used to automate repetitive tasks, such as running payroll, handling scheduling and purchase orders, and managing recipes, thereby freeing staff to handle customer service and other more pressing issues.
Additionally, an ERP system can be used to surface data insights from sales reports, inventory lists, staff performance reports, and customer preferences, thereby enabling data-driven decision-making. The key to a successful ERP system for restaurant operators is ensuring that it meets the following key criteria.
Purpose Built for the Restaurant and Hospitality Industry
NetSuite’s Smith says that ERP systems that are not specifically designed for use by restaurant or hospitality operators may not be set up to manage all of the specific nuances of the industry, which are often only apparent to those with specific restaurant industry expertise and experience.
“We really went to market with a purpose-built solution around the industry,” Smith said. “So, we sell to restaurants, we have restaurant customers, and we get feedback from our customers. I was actually a NetSuite customer previously, and I was on a customer advisory board where we talked about what works well for our restaurant organization and what didn’t work. We adopted a leading practice together with which we can actually go to a small restaurant and say, you may not know what you don’t know yet, but we can offer you an integrated, comprehensive system to run your business and leading practices based on 20-plus years’ worth of experience of what our restaurant customers have done.”
That restaurant industry expertise was a primary reason why NetSuite was selected by Hofman Hospitality Group, a family-owned restaurant group that started in 1951 as a single beach burger stand in Long Beach, California, and has since grown to operate 25 restaurants including Hof’s Hut, Lucille’s Smokehouse Bar-B-Que, and Saint & Second throughout California, Nevada, and Arizona.
Hofman Hospitality Group has used the NetSuite ERP system to centralize financial data, automate reporting processes, and gain the insights it needs to improve strategic decisions. Its CFO, Chris Crawley, says that the purpose-built nature of NetSuite’s offering was a key advantage over other packages.
“NetSuite has another advantage over some of the competitors,” Crawley said, “Within their restaurant practice, they were able to put together an out-of-the-box platform that is geared specifically for us in the restaurant and hospitality industry.”
ERP System Flexibility and Scalability Are Table Stakes
According to NetSuite’s Smith, operators must be nimble and able to adapt based on changing market conditions. For example, during the pandemic, many restaurants had to quickly pivot to working with third-party delivery services, while others wound up creating entirely new business lines focusing on the distribution of items that were once only available within the restaurant service function.
“If there’s one thing we know about this industry is that it’s constantly reinventing itself,” Smith said. “They’re always finding different ways to make revenue with different business lines. And the fact that NetSuite is flexible enough and plays in enough industries and has enough functionality that we can be flexible with them, is a big value proposition.”
Furthermore, Smith says that it is rare that an operator will opt to do a full rip and replace of existing operational software, and as such, an ERP system needs to be able to seamlessly work with other existing applications.
“What we try to give our customers here at NetSuite is options,” Smith said. “So, if someone is using a specific restaurant management software and says, ‘we don’t want to change what they’re doing; we just need to solve our accounting and finance needs and we need to be able to have a central system of truth, we can be that.’”
Despite the fact that NetSuite can provide a wide range of functions beyond accounting or finance, “we are not trying to replace everything for our customers; we know each one is unique,” Smith says. “Even from one QSR concept to another, different operators work different ways and if they find a solution that works, we’ll work with them.”
Hofman Hospitality Group’s use of NetSuite is illustrative of how many operators choose to deploy the software. “Integration was a big deal, and I think that was one of the main drivers for our decision in utilizing NetSuite,” Crawley said. “Especially on the restaurant side, we use Crunchtime, which is a back office system that sits behind our POS. We’re doing a lot of our inventory, all of our purchasing, and our commodity purchasing, which makes up pretty much 80% of our AP spend, that all was being done in that back office system. We didn’t want to disrupt operations at all, but we didn’t want to move anything on the front end. So, the integration between NetSuite and Crunchtime was obviously a big plus for us and was definitely a big part of the reason why we went with NetSuite.”
Smith concurs, noting that “I think our customers have very high expectations for how their restaurants are going to operate all the software stack they may have in place [with] other functionality that pertains to the restaurant industry. We really focused on making sure that they get a solution with NetSuite that can fit their needs today and continue to scale as they grow and change as an organization.”
Leveraging the Power of Partnerships and Collaboration
As the company has expanded its operations, Crawley says that one of the other elements that has been particularly fruitful for Hofman Hospitality Group has been NetSuite’s ability to connect the operator with other technology partners, helping the organization “improve our technology and streamline some of the processes that we have around our third-party reconciliation for delivery channels.”
In addition to the ERP system’s industry-specific feature set, Smith says that offering a support team with real-world industry expertise is also important to restaurant operators.
“With that purpose built solution, we also went to market with a purpose built team,” Smith said. “Recruiting people like me and also with our professional services team inside NetSuite—the ones that actually deliver the software—we hired people with a restaurant/hospitality specific background. So, what we hear from our customers a lot, is that ERP functionality is one thing, but the support staff of the software is oftentimes just as important as the software itself.”
Crawley concurs and adds that internal expertise and a willingness to partner with the vendor is also critically important to ensuring that the implementation of a new ERP solution goes smoothly.
“One of the things I would say which was helpful, was that we had a really great project manager internally, on our side, that worked in tandem with the NetSuite implementation team,” Crawley said. “It was a very good relationship, and obviously got us up and going and implemented in a very reasonable amount of time. We actually brought in five years of historical data. Considering the amount of data and the level of detail around our financials, I felt that it was very smooth implementation.”
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other Insights from The Futurum Group:
Oracle FY 2024 Q2: Cloud Infrastructure and Generative AI Spur Growth
New Licensing Model Announced for NetSuite Warehouse Management
NetSuite Unveils New Innovations to Improve Business Efficiency
Author Information
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
