It’s a big decision for restaurant owners investing in POS systems – should you go for on-premises technology, or would a cloud-based system suit you better?
It’s a decision as individual as your business, and can be tricky. And because one size definitely doesn’t fit all in the hospitality industry, the most savvy restaurateurs seek expert help deciding what’s best for their own circumstances and set-up.
But there are some clear differences between the two ways you can host your point of sale system, and in this guide by NFS Technology we outline some of the things you should know.
What’s the difference between on-premises and cloud-based POS systems?
A full point of sale system enables:
• your staff to take orders at tableside on tablets or mobiles and send them straight to the kitchen
• offers prompts for upselling
• supports kitchen automation
• enables accurate billing and payment by card at tableside
• allows customers to see menus and place orders online or from a kiosk/tablet
• integrates with your other restaurant systems, eg inventory and accounts
• captures important customer data to support targeted offers
• integrates with customer loyalty programmes
The difference between a cloud-based system and an on-premises restaurant management system is that there’s no need for a server on your premises. All data is stored in the cloud – for instance, Microsoft’s Azure – and accessed via the internet.
What are the pros and cons of cloud-based systems for restaurants?
It’s important to stress that every restaurant business is individual, and you need to think carefully about what you want your EPOS system to achieve for you. The areas outlined below will give you some food for thought.
Footprint
On-premises POS systems base a server to be within your restaurant, which does take up some space but not much – the box is about A5 sized and is the backbone of the processing power for your EPOS system. Getting a full server of the correct power is more cost-effective than fitting it into a POS terminal.
A cloud-based POS system does not need any hardware on your premises as the processing is done in Azure.
Resilience
Being based in your restaurant, an on-premises server offers the best possible redundancy for that location if the internet fails at any time. On the other hand, in a busy environment the server can be accidentally damaged – for example, by being knocked or spilled upon.
In cases of internet outages or slowdowns, businesses using cloud-based technology may experience disruptions in functionality, leading to potential delays in service and transactions.
Updates
Cloud-based systems score highly here because they often benefit from the fast and remote release of updates and new functions. In addition, they are API-driven and designed for interoperability. Scaling up can also be done quickly if needed.
However, some cloud-based systems can offer limited options for customization when compared to more traditional software.
Cost
On-premises POS systems can require significant upfront investments in hardware and software, and may require the purchase of a licence.
Cloud-based POS systems, on the other hand, usually operate on a subscription-based model, eliminating the need for expensive infrastructure. This can be beneficial for small and medium-sized businesses with budget constraints, but the lifetime cost of the system should be taken into account before you make a decision.
Cloud-based POS systems frequently include automatic updates and maintenance as part of the subscription. This reduces any burden on internal IT resources and keeps additional costs down.
Scalability
When a business expands, its operational needs change and grow with it. Cloud-based POS systems for restaurants offer scalability, enabling hospitality organisations to add or remove functionalities and adapt the system without a large overhaul.
Overall benefits of a POS system
When choosing a POS system, it’s wise to select one that’s specifically designed for restaurants, rather than one of the cloud-based POS systems for retail. But whether you choose software that’s based on your premises or hosted in the cloud, your business will still gain the huge benefits that digital technology can bring. These include:
Customer service
This will benefit whether you choose an on-premises or cloud-based POS system. Point of sale streamlines the customer’s journey by making service quicker and more efficient, and by allowing diners to pay swiftly and conveniently.
Labour management
Staffing also benefits from any kind of restaurant management system. By capturing data, the EPOS highlights the busiest times, enabling managers to match staffing to demand.
Tableside ordering, with orders sent directly to the kitchen, saves servers from running back and forth, enabling them to spend valuable time liaising with guests. It also eliminates human error, which also saves time and money, and helps cut down on the potential for staff fraud because all transactions are clearly logged.
Efficiency
EPOS systems are designed to integrate seamlessly with your other business applications, such as inventory management, customer relationship management (CRM) and accounting systems. This integration enables you to streamline operations and reduces manual data entry errors.
Reporting
Restaurants, and particularly restaurant chains, are complex businesses that can be hard to control. EPOS – both on-premises and cloud POS – provides comprehensive reports on all aspects of the business that give an end-to-end view of the business in real time.
POS systems give managers access to these reports via the internet wherever they are based, eliminating the duplication of head office functions and promoting efficiency.
Conclusion
Any hospitality business investing in a POS system should consider carefully a wide range of pros and cons.
The accessibility, reporting and cost-saving benefits can significantly enhance your operational efficiency and customer satisfaction, and will also make your restaurant a better place for staff to work.
However, you need to be mindful of potential challenges such as internet dependency, customisation options and long-term subscription costs.
It’s a good idea to seek expert help from a provider with a consultative approach who will help you define your aims, requirements and priorities, and who can also keep you up to date with the latest advances in technology.
With expert help, you can weigh the pros and cons for your own individual business – and make an informed decision that aligns with your operational goals and contribute to long-term success.
