Build or Buy AI:

By Clinton Anderson|Oct 17, 2024|11:01 am CDT

AI took center stage at FSTEC 2024 held this past September in Grapevine Texas. Innovators, technologists, and restaurant operators across the country gathered together to explore new technology solutions to hospitality’s greatest challenges. The big takeaway was that AI is now table stakes for restaurants. To remain competitive, restaurants must leverage AI in some form, but the question remains.

Should these organizations seek a solution provider or build an AI solution themselves?

In this blog, we’ll explore this question and discuss the advantages and challenges in each approach. From there, we’ll review the value AI can deliver restaurant operators.

Building Your AI Solution

Building technology in-house provides significant advantages over a pre-built solution. But, it comes at great cost. Your organization will be able to build the program from the ground up and customize its functionality to precisely meet the needs of the organization. Once built, this tool will be immensely valuable to your operation.

The downside is that building an AI platform is a resource-intensive endeavor requiring very specialized skills that are already in high demand. You will need to hire or contract a team of top-tier developers for a significant period of time, perhaps years, before launching the application. Then once available, the AI program will need maintenance, the staff using it will need support, and ultimately the solution will need to scale overtime as the business grows. This creates an expensive recurring cost.

Considering the resources required, there are two more questions to ask yourself. Does your business have the resources to build an AI solution? And then perhaps more importantly, ask yourself. Can my business afford to be left behind while we develop an AI platform?

The building route is not impossible, but it requires perfect conditions within the business. For many restaurants, it will simply be beyond their means. There are already numerous AI solutions for the restaurant industry on the market, forcing new developers to play catchup.

Buying Your AI Solution

Let’s your business leverage proven solutions faster. An AI partner has already fronted the investment and has experts constantly refining the tech. So, you benefit from the immediate ROI and ongoing improvements.

For most restaurants, the answer lies in scalability. Buy the solution and build on its value through data. It’s about agility, not reinventing the wheel.

The alternative route to deploying an AI solution for your restaurant is by licensing an existing software solution from an established developer. While this gives the restaurant owner less control over the final product, buying a solution comes with many benefits.

First and foremost, the solution already exists and is ready to be deployed. The AI partner has already fronted the capital investment, hired a team of developers, and did the hard work of creating something new. Their team will now own, maintain, and refine the solution over time to bring more value to their customers. The restaurant owner gets to benefit from immediate ROI and ongoing improvements.

For most restaurants, the true value here lies in agility. AI is shifting the industry landscape quickly. By partnering with an existing provider, organizations can seize on an existing, industry-leading solution today and compete with the top chains. The biggest risk today is being left behind.

AI Buying Guide: 

If buying an AI solution is the right option for your business, the next step is to enter the AI marketplace and find a suitable vendor. AI is the buzzword of the day, so there are hundreds of providers all trying to position their AI platform as the premier solution on the market. Here are a few strategies to help sift through the noise and find a solution that can deliver results for your restaurant.

Industry Fit

The restaurant industry has particular requirements and use cases that make it distinct from other industries. Seek out a platform built for the restaurant industry over a generalized all-comers solution. A specialized AI tool will cater to the needs of your restaurant better, and the provider will have a better understanding of the challenges restaurant owners face.

• Pro tip: look for success with customers like you, including featured logos, customer quotes, case studies, and reviews relevant to your industry.

Ease of integration

A new AI platform has the potential to revolutionize how you gather, use, and understand data. To do that, it must integrate with your existing technology solutions, so that it can aggregate and analyze data from across your technology environment. Depending on the provider, this could be a smooth, straightforward process, a tangled mess, or even an impossibility.

• Pro tip: in your evaluation, ask about what integration will look like, what support resources will be available to you, and what their recommendations are.

Cost and ROI

The goal of any AI platform will be to create efficiencies and better real-time decision-making. Ultimately, that will have a positive impact on the finances of the restaurant, either through lower costs, higher revenue, or both.

• Pro tip: Compare upfront and ongoing costs against potential ROI of using the solution.

Vendor Support and Reputation

While startup companies offer a scrappy, innovative approach to a new technology, their limited resources may prevent them from providing sufficient training and support. An established leader in the industry brings resources, infrastructure, and a reputation for quality service to the table.

• Pro-tip: Ask what technical support and training programs they offer during evaluation

The Role of AI in the Restaurant Industry: Benefits of Embracing AI

There’s a reason why the industry is so excited about the impact of artificial intelligence. It can provide tremendous benefits to an organization. Namely, it promises to reduce costs, reduce waste, and improve revenue.

Here are some of the leading benefits of embracing AI in your restaurant operations:

• Reducing Cost per Hire: AI platforms can create efficiency in your hiring process by automating many tasks, such as publishing job descriptions, scheduling interviews, and sending follow-ups. Through the use of FourthiQ, our customers are able to hire top talent 90% faster.
• Building Optimal Schedules: FourthiQ can improve demand forecasting by 20% leading to an optimized labor spend. Never overstaff or understaff again by knowing the precise amount of staff you need to meet demand in any given shift.
• Taking Control of Inventory: AI platforms can track inventory levels and automate repurchasing of ingredients as supplies are consumed. More, platforms will monitor shifting prices of ingredients to replenish items at the best price. This both saves operators significant time as well as reduces cost and waste.

The Future of AI in Restaurant Operations

When we look to the future of AI in restaurants, we cannot know what new innovations lie around the corner. However, we can look to see what restaurants are doing today and map out where those trends lead.

AI broadly is delivering the same value to businesses that the digital revolution provided for the last twenty years, but in new ways and in new areas. Restaurant operators are saving time in their day, completing tasks faster, and reducing the cost of doing business.

As AI matures, we will see restaurant operators applying the same formula to new areas of the business. For now, obvious processes like payroll, hiring, and inventory are most ripe for optimization, but in the future, entire restaurant concepts could be devised by AI, menus could be tweaked to perfection using big data, and personalized dishes could become the norm. Restaurant operators will continue to automate and offload tasks, so they can focus on high level strategy for the business and improve the dining experience. Until we reach the next frontier, organizations are seeking a competitive edge by making their operations as smooth as possible.