Bertucci’s Savors Benefits of Applix’s Business Performance Management Solution

Today, the company operates 92 restaurants in eleven states and the District of Columbia.

Built on a passion for quality and authenticity, Bertucci’s secret to success is simple, uncomplicated recipes; a passion for Italian cuisine; and an uncompromising attention to detail.

This attention to detail extends not just to the fine meals served at Bertucci’s but also through the organization. Don Roberts, Director of Financial Reporting and Analysis at Bertucci’s, carried the company’s business approach into the finance department to improve Financial Reporting and Analysis and look at financial data as part of an overall performance management solution, providing insight into the operations of the company that have led to more effective business.

Budgeting and Reporting

When Bertucci’s originally selected Applix’s TM1 OLAP engine, the company never dreamed of the long-term possibilities of TM1 and its evolution to an industry-leading performance management platform.

The main reason Bertucci’s selected Applix TM1 was to significantly accelerate the speed and flexibility of its reporting – most importantly moving away from nightly batch processing. Over the years, TM1 has been extended, enhanced and upgraded, but its core in-memory architecture, which facilitates real-time processing with sub-second responses, hasn’t been structurally changed -- only improved.

Today, Bertucci’s estimates it works with 200 distinct lines in each P&L report per location – meaning the performance management system needs to handle nearly 20,000 lines of data without any performance degradations. Despite this, Roberts says the Bertucci’s team can load cubes and punch out 92 detailed P&L reports within one hour. So, instead of waiting 12 hours for information, the Bertucci’s team and Bertucci’s executive management can look at the company’s financials in its entirety within one hour. The benefit of being able to see data within an hour versus waiting over night for a batch process is that overnight batches sometimes fail and that failure is sometimes not discovered until the next morning.

Additionally, Bertucci’s needs some data updated daily in the cubes, such as credit card summary data used to calculate the rate the company pays the merchant services for credit card processing. Bertucci’s also reviews guest survey data daily to evaluate how guests perceive the experience in their restaurants so they can adjust and improve customer satisfaction. The benefit to those daily updates is that Bertucci’s can perform ad hoc analysis and reporting as needed.

A core characteristic of Applix TM1 is its easy-to-use interface, allowing for effective area, regional and corporate roll ups. This has enabled the Bertucci’s team to create one template for reports, which are generated on a weekly and monthly basis and e-mailed to the managers in the field.

At Bertucci’s, tracking metrics, part of the company’s high-caliber performance approach, finds its way to bonuses. By examining the budgets and plans, Bertucci’s management changes specific metrics yearly to accurately reflect the anticipated business and potential issues.

Bertucci’s regional and restaurant managers are bonused on several metrics:

1. Variance to theoretical food costs, with a goal of a 1% variance;
2. Location sales versus budget;
3. Incremental direct pay – the change in labor in relation to the change in sales; and
4. Level II operating expenses (expenses that are controllable by the managers).

And TM1’s cell-level and administration-level security gives Bertucci’s peace of mind that they have an audit log of changes, dates and agents, ensuring they are meeting SEC standards and Sarbanes-Oxley requirements.

Performance Details in a Non-stop World

The restaurant industry is notoriously difficult: sometimes it lives at the mercy of fickle food fads, the mercurial economy, weather, or simply location choices. The key to not just surviving but thriving in this very tough business is to pay attention to detail and reward excellence.

Since TM1 allows Bertucci’s to easily run real-time, ad hoc reports on the status of restaurants, areas and regions, the financial and operational information that feed into corporate metrics are literally at the finger tips of the Bertucci’s team, enabling the company to make decisions in rapid response to business fluctuations.

The Applix TM1-based performance management application pulls real-time information from several core systems at Bertucci’s, including Epicore for GL; Ultipro payroll software; and a data warehouse. In total, the data directory Bertucci’s uses is approximately 450MB.

By combining operational information with financial results and factoring in corporate metrics, Bertucci’s not only understands the bottom-line, but also understands what and who are directly contributing to that bottom-line.

What-ifs for Expansion, Fine-tuning

Successful businesses like Bertucci’s do not manage on gut feelings, estimates or simple guess work; instead, they gather critical empirical data, research trends and use the latest tools and technologies to maximize opportunities and minimize surprises.

Bertucci’s relies on Applix TM1 for the ability to predict success in a number of ways, particularly for new restaurants and menu items.

For example, when looking at a potential new restaurant, Roberts uses TM1 to perform scenario planning. With its in-memory architecture, TM1 can recalculate on the fly, enabling a rapid scenario planning report.

For new locations, Roberts will average financial and operational data from four similar locations. This predictive capability enables Bertucci’s executives to decide if they want to open in that space or if it is a better business decision to walk away from the opportunity. And if they do move forward, TM1 can, of course, manage and monitor all the construction and opening costs.

Ultimately, though, the “bread and butter” of the restaurant industry is food. And success is not as simple as full tables and sold plates. Instead, it is often about the margins and managing menus successfully.

With TM1, Roberts has built a menu cube that allows management to look at the number of plates sold by type and by restaurant. This helps the team to understand regional variances in sales and consumer tastes. Roberts and the Bertucci’s team also produce reports and data on monthly totals; these totals can be examined in any number of ways – by restaurant, area and region on a monthly basis, and by “Dine In” versus “Takeout.”

Like the Roman God Janus

The Roman god Janus had eyes on both the front and back of his head, able to see in front of him and behind him at the same time. What does this have to do with Bertucci’s? Well, Roberts and the Bertucci’s team realized that financial planning is not always about what might happen in the future, but is also about what did happen in the past.

As a New England-based company, Bertucci’s is well aware of the impact weather can have on sales. One snowstorm can cause a dip in some restaurants’ stores; one bad winter of multiple snowstorms can have a chilling effect on quarterly profits.

But a weather-related dip in sales is a very different situation than a performance-related sales issue. Roberts realized, looking back at sales reports, it’s quite hard to remember when a storm hit last February.

So, putting on his “Janus hat,” Roberts made a small, but incredibly strategic decision. He tracks the weather in key cities with Bertucci’s restaurants. Roberts visits the NOAA (National Oceanic & Atmospheric Administration) web site monthly and downloads text weather reports with daily weather detail to attach in the relevant TM1 cube.

When quarterly and annual business reports are reviewed, the executives then have information on weather-related events that impacted sales, enabling them in a glance to rule out slower sales due to weather and instead focus on true performance issues across the business.

Sweet Endings

In any restaurant, the server’s tip is often determined by how long it takes that server to deliver the check; essentially, forget about the ongoing experience and focus on the last result.

Bertucci’s use of TM1 is similar. “TM1 gives us insight and information on which we can make better, faster decisions. The simplicity, flexibility and speed of reporting is just incredible,” said Roberts. “But in the end, the biggest benefit of TM1 is that it gives everyone confidence in the reliability of the data.”

Since Applix TM1 allows Bertucci’s to easily run real-time, ad hoc reports on the status of restaurants, areas and regions, the financial and operational information that feed into corporate metrics are literally at the finger tips of the Bertucci’s team, enabling the company to make decisions in rapid response to business fluctuations.