Do you work with the hospitality sector? Tired of doom and gloom? Want to plan for great customer experiences and get the most out of your operations?
There is no doubt that cost of living pressures are making customers think twice about spending money. There is also no arguing inflationary pressures on operations. However, this is not the first time we find ourselves in an inflationary environment. When there is volatility in demand and prices, the key to success is focus. This means being informed and making good decisions. It is time to make sure your forecasting and operations are data driven.
Despite the economic back drop, hospitality revenues are generally holding up. There are fewer customers, but customers are spending more. Better demand forecasting and product mix understanding will help better align operations.
Food costs are rising but are they “unpredictable”? No. When prices change faster they can still be forecast. However, models need to become more sophisticated, taking more demand factors and related prices into account.
Labour costs are high! True, but they will not rise exponentially. Better understanding demand and staff requirements will drive better labour productivity. When costs are higher, make sure you are using resources in the best way!
“No-one is expanding in this environment”. Not really true. Fewer operators are expanding, however these are great conditions to secure good deals on new sites. Given the market backdrop, a detailed understanding of what works across different sites will help focus expansion plans on the sites with the highest sales potential.
“You can’t sell a business in this climate”. True that deal volumes are lower and valuation multiples have come off the peaks, but there is always demand for good businesses. A sharp focus on understanding the market, forecasting demand and managing costs will drive value. Any business sale or funding opportunity will always be driven by value.
Algospark is helping the hospitality on numerous fronts:
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Are you using Excel sheets stored on shared drives for your reports? Do you forecast based on last year or last month with a x% change? Moving to better ways of managing data and forecasts does not have to be difficult. Algospark works with finance professionals and analytics teams to help them evolve from processes that are “painful, manual and reactive” to “easy, automated and proactive”.
What is “next generation analytics”? The evolution phases for next generation analytics are:
Reporting: what happened to x?
Interactive dashboarding: what impact did y and z have on x?
Predictive analytics: what is going to happen to x?
Prescriptive analytics: what should we do about the prediction for x?
Feedback loops / system learning: did we follow the recommended action, and what was the outcome?
Most organisations are somewhere between reporting and interactive dashboarding. We help define development plans that suit the capabilities, trajectory and budget of an organisation.
So, why bother anyway? The benefits:
More accurate forecasting
Faster time to decision
Reduction in analytics time
Better insights and increased value add from your analytics team
Prescriptive analytics and feedback loops mean that the analytics teams work much more closely with other parts of the organisation to help drive change and improvement.
Excel spreadsheets can get the job done, but not in the most efficient way. The same way that you can use scissors to cut the lawn.
Typical reasons for not changing:
We are familiar with Excel. (But new ways of working are similar and much more productive and resilient.)
New systems are expensive. (Not really true, a well scoped data architecture and new ways of working will nearly always generate an attractive business case.)
The team are too busy. (They are usually working on painful and manual processes, which can be removed by a more efficient way of working with data.)
No-one in the team can do this. (Evolving data skills with the support of specialists will make analytics more interesting, increase engagement and deliver more value to the business.)
We always advocate defining a future state and then evolving. “Big bang” introduction for analytics is rarely successful. We find building and evolving a success story in part of an organisation is an excellent way to start the journey and evolution path to next generation analytics.
Still not convinced? Common inefficiencies that we encounter:
Lots of similar reports answering similar or related questions
Ad-hoc requests and manual workarounds
Managing, updating and error checking Excel based “master spreadsheets”
Cut and pasting charts and tables into presentations
We have worked with large and small companies, across numerous sectors at varying degrees of data and applied AI maturity. Core Insights (https://algospark.com/core_insights) is how we help accelerate the evolution to next generation analytics.
Core Insights review areas:
Existing reporting within the context of key performance indicators and alignment with key business processes
Forecasting and recommendations
Data storage, data architecture, data processing and reporting
Use of technology
Team skills (data processing, analytics and data science)
From this we develop a prioritised reporting roadmap and technology path that we can help your team deliver. We are experts in applied analytics and AI. Get in touch now to discuss how we can help you transition to next generation analytics!