• The POS system goes down more often – causing operational delays, increased hardware replacement and labor costs to bring the system back online

• The hardware and operating system is no longer supported by the manufacturer (i.e. the POS software is running on the Windows 95 or 2000 platform)

• While your hardware may be in good condition, it is not powerful enough to run the newer software. This also means that the older hardware is not going to perform as well as newer hardware, in terms of speed and up-time, or availability.

• Features from the latest point-of-sale technology are not available for your older system, which could mean you are missing out on additional efficiency and automation techniques. For example, the laborious effort it takes to program a menu or make regular configuration changes to the system, as well as training new staff. Beware! – There can even be supposed “new” technology that is still using old database and computing models – essentially putting a 2010 sticker on a 1990 POS system model.

• A critical concern about older systems is credit card transaction and personal data security if you are running credit cards through the pos. As of June 2010, your older system could be violating the PCI DSS Compliance standards. .

These are some primary considerations when determining when to replace that outdated point-of-sale system. Of course you always want to consider the ROI on replacing the old pos as well. Knowing how much the old system costs you over time, including warranty and support costs, average losses, accounting time (labor) costs, etc. ROI elements of a new pos system, some of which are reflected from the considerations:

• Durability and extended warranty of hardware
• Reliability of software, as well as money saved from a critical software update program
• Less time managing the system
• Less down time
• Lower risks of loss and theft
• New or advanced abilities to extend the system with 3^rd party software for accounting, automation, food costing, inventory, marketing, etc.

Upgrading POS for Credit Card Security Requirements

The issue of keeping consumer’s credit card information secure and private is now a main driver of upgrading outdated point of sale hardware & software.

According to Visa on their website, “Acquirers”, or payment processors, should ensure that your customer transactions are compliant. There is the need to makes sure your technology products and live configurations pass compliance requirements as well. However, this is only part of the standard process. The restaurant owner or merchant has the main responsibility in making sure that the elements for PCI DSS compliance are understood, implemented and followed at his or her establishment.

The best way to get started is to visit the PCI Security Standards Council About page on their website

You can also visit the CISP, or Cardholder Information Security Program page at Visa’s website.

Once you have learn what is required to protect your customers’ credit card information, work with your payment processor and technology provider to check and resolve any outstanding issues.

We are first and foremost about how technology can, as Jim Collins states, be a “catalyst” in moving your hospitality business forward towards greatness; great restaurant and hotel operations, great customer service and resulting loyalty, great returns on your investment.  So whether you are just starting out with your first location, or operating a multi-location restaurant or hotel chain, your technology only can help in relation to how it is being used to further your current operations and processes. Yes, it can greatly improve efficiencies in operations, resulting in lowering costs, as well as increasing revenue – but the efficiencies of actual operations themselves matter much more at times – especially when considering the implementation of new or updated technology.

Our guidelines for approaching an overall hospitality technology strategy:

POS at the core – it is where the day-to-day operations get managed, and data from it can clue you in to where the challenges lie – all of the other technology segments, with the exception of bringing new customers in through an effective online marketing strategy/implementation, hotel reservation management (and maybe a few others) directly relate to the Point of Sale.

Operational Security- keeping your risk at a minimum with security plan and can include configuring employees’ roles and jobs in the point of sale system, a video surveillance system  and, or a video surveillance system that integrates with the POS to record transactions

Credit Card Transaction Data Security – while most of your customers do not pay close enough attention, you still must ensure that their credit card data is secure. PCI Compliance may seem like a big hassle, but it is one of those necessary pains to not only limit risk to your customers, but risk to your hospitality business as well. It is now a critical demand from Visa and the credit card industry as of June 2010.

Customer information tracking: for loyalty and marketing to bring in new customers – knowing what they ordered and when, how many times they came in; adding the personal touch with special offers and information; optimizing your menu to offer the hits and remove the misses.

Integration and Automation of POS data to other critical operations, such as accounting, payroll, food costing and inventory control can greatly reduce the time spent managing this information. Whether solely owning your business, or overseeing franchisees/managing partners, this can be most important when managing multiple locations and, or concepts for centralized data organization and management. Integration and automation allows you to start building business intelligence data for strategic and tactical decisions that help your hospitality business to succeed.

HTG will be discussing these topics in future articles, so stay tuned.

So what is your overall strategic and tactical approach? Feel free to comment here or on our Facebook page.