“I fundamentally want to be at the cold front of decision making. To have the opportunity to drive transformation puts fire in my belly. My ability to invest change in an organisation is why I took this role with open arms. Because we have private equity backing us, I generally get what I ask for — but the double edged sword is accountability. My responsibility is to devise strategic partnerships capable of building and executing digital transformation that can measurably impact the business. Our industry is complex and competitive — you are only really as good as your last month.”
Insightive.tv: What was the situation that you inherited when you landed in your new role?
Michael: Historically, this business has had 15 different point of sale platforms and a myriad of different back office applications. Since I started 18 months ago, the main priority has been the rationalisation of that system to bring down costs and allow for the aggregation of data. There was already a roadmap in place, but it has been down to my team to make sure it happened.
Our ERP system is built around our inventory management systems Hotschedules. This is really the backbone of our procurement and restaurant systems. We are now working on the rationalisation of data from an inventory and menu management perspective. During my tenure, we have invested heavily in bringing this system into alignment.
Insightive.tv: How high of a priority has e-commerce become to your digitisation goals?
Michael: Bricks and mortar are at the heart of what we do. However, the industry is undergoing a transformation. The emergence of aggregators such as Menulog, UberEATS and Deliveroo are changing the way both consumers and brands think about home delivery and takeaway. I like to look at the aggregators as ‘virtual food courts’ — if you don’t work with them, their customers aren’t going to think about you. Our goal is to continue to be involved with aggregators, but also work towards building our own e-commerce platform and strategy. With Red Rooster, for example, Menulog only makes up 35% of their total online revenue — historically, that was 100%.
Owning the customer journey opens a number of opportunities to better understand your customers and cater to their needs from both a delivery and in-store perspective. We now have over 500,000 loyalty subscribers across two of our three brands. Via CRM tools, we engage those customers in a very personal way and are developing what I call ‘read my mind technologies.’ The goal here is to remind a consumer who hadn’t yet thought about what they were going to do for family dinner that our restaurant is on their way home. It is about crafting messages of immediate relevance — predictive analytics for dinner. The technology is there from an e-commerce point of view. We simply need to drive consumers to engage with our loyalty programs through promotions such as point systems.
We have a road map to truly own the e-commerce customer experience. We simply need to overlay that across our other two brands. The entire aggregate space of online ordering is worth $AUS6 billion to QSRH. It is something we need to jump on board to avoid the risk of being cannibalised from a sales perspective. For Red Rooster, specifically, our online presence has gone from nothing to 10% of our total revenue in the space of just over 12 months.
Insightive.tv: What have you learned through overseeing this transformation and what has been the biggest challenge?
Michael: The biggest challenge, hands down, has been franchise engagement. It took me about 20 years to work out that I am essentially in a sales job — especially when it comes to IT where there are so many stakeholders. Selling the vision and the dream to franchisees is the hardest aspect of my role. We worked heavily on stabilisation platforms when I arrived — making sure that our technology just worked. The results we have been able to achieve have helped garner enthusiasm for continued transformation. Every three to four months, we have stakeholder meetings to engage with franchisees. I think a key to that engagement is really looking at it as a peer-to-peer relationship. Being a house of brands, there is a diverse range within the leadership team. However, in reality, that team is made up of shareholders in the business — acknowledging that what makes us a differentiator in the market is that we have a standardised platform that allows us to deliver quickly and efficiently, keeps everyone on board with our transformation strategy. We have built a tight and unique ecosystem.
The power and importance of targeted digital engagement has become undeniably clear to me. For example, we have something called our Free Chicken promotion. We invested heavily in marketing above the line for our first campaign prior to Christmas, last year. From a loyalty adoption and sales perspective, it hit all the necessary targets. However, the data we gleaned showed that we could spend little to nothing above the line and invest in digital marketing to achieve the same results at a much lower cost.
The algorithms that sit behind our sales forecasting formula cascades up into a business perspective. When looking at forecasting of sales or resources we can take a comparative look between recent days, how that day performed in previous weeks, and how today performed compared to last year. We can then take into account things like weather — if it rains, we can expect an uptick in drive-through versus foot traffic. All of this can be taken into account to prepare for a given day and assess the health of the business — both regarding a single store on a single day and on a macro scale. This helps us manage products, inventory and labour. The whole system is now connected, and that is only enabled by the standardisation of the platform.
Insightive.tv: What do you see for the future of Craveable Brands and do you have advice for others in your position?
Michael: It is a passion of mine to not only be a customer but to be the staff. Walking a day in the customer’s shoes and understanding the nuances of what they see when they walk into one of our restaurants is something I take very seriously. The same goes for understanding our staff. We formally have what are called ‘in your shoes days’ — an opportunity for us all to get out of the ivory tower and back to reality. This is something that is important to me perhaps partially because I have done all of these roles working my way up. I always try and remind franchisees that it is my job and their job to make the role of the shift manager as simple as possible because it is one of the hardest and most important jobs in the business. It is my job to find the technology that will allow that person to minimise the amount of time they have to spend in the back of the office making orders, handling complaints or trying to find staff to cover someone who called in sick. Having the tools necessary to minimise that time lost is key to upping the service capabilities of our restaurants.
There is an absolute acknowledgement that the implementation of Business Intelligence tools will give us the opportunity to work smarter. Analytics are driving every aspect of our business including new store growth. We are leveraging data in order to understand where our customers live, what they order and our delivery coverage of an area to maximise the impact of expansion to our existing customer base. If we can’t deliver to you today, we want that in our database so that it’s something we can change in the future. However, the next wave for us is looking to leverage the platforms we have in place — click and collect, curbside pickup and different modes of ordering. Driving sales and franchisee profitability via the utilisation of technology is and will remain, the priority.
Michael Schofield is the Chief Information Officer for Craveable Brands — the parent company of the iconic Australian franchises Red Rooster, Chicken Treat and Oporto. Until moving into his new role at the start of 2016, Michael was Director of IT Services, APAC for McDonald’s.
Michael is tasked with driving transformation within three brands that run a total of almost 600 restaurants, employ 12,500 people and serve over 150,000 customers a day. We sat down with Michael to understand how digital technology is changing the restaurant industry. We learned how the evolving role of the CIO is orchestrating the utilisation of data to drive profits and improve eating experiences.