Reigning supreme

By Ben Thompson

Pop quiz: how many different ways are there to order a Whopper meal? “More than you might think,” laughs Burger King CIO Raj Rawal. “The different permutations are mind-boggling once you get in to all the various ingredients, styles and ways of cooking that are possible. Operationally, providing the customer with exactly what they want, the way they want it, is a pretty big challenge.” He’s not kidding. The answer, for all you trivia buffs out there, is 221,184.

With annual revenues of over $2 billion, the fast food firm is the world's second largest hamburger chain with more than 11,100 restaurants spread across 65 countries. Every day, 11.8 million customers consume close to a million pounds of beef while over 37,000 staff - plus many tens of thousands more employed indirectly in the 90 percent of Burger King restaurants that are operated as franchises - work tirelessly to ensure the customer can 'have it their way'. "The hamburger business is essentially a commodity business, and it's primarily driven by operations, says Rawal. "So when you go to Burger King, you want a Whopper Sandwich the way you want it in every single Burger King, regardless of where you are."

To this effect, Rawal has implemented a number of measures designed to bring in an element of operational consistency across the organisation. Indeed, on assuming the CIO role in 2005, Rawal faced a number of pressing challenges. One of his fist tasks was to prepare the company for its impending (and subsequently successful) IPO. He then began a process of technology standardisation that would enable the company to grow its global capabilities, and cites the example of the firm's point-of-sale (POS) system as indicative of the considerable progress that has been made in recent years - and of how far the company still has to go.

"In many ways the register in the restaurant is the key piece of equipment for us, and yet until January 2006 we had no company-wide standard as to what register or system should be used," he explains. "We've now established the very first standard POS across the company and the franchise restaurants, and are in the process of migrating to that standard - as a brand, we're over 40 percent moved over to the new POS and have set January 1, 2014 as the date by which all restaurants must be on that new system."

With the standard POS in place, Rawal explains that the company can now start driving further system and process consistency across the organisation as a whole. "We're implementing what we call a standard naming convention, so that a Whopper, for instance, has the same number identifier across any Burger King restaurant, whether company or franchise. That wasn't possible with the old system," he says. "This then allows us to do more in terms of collecting and analysing information, and enables us to see what we need to do to be better, to be faster, to be more successful as a corporation and a brand. Being able to really understand how the business is doing compared to last week, last month or last year, for example - by time of day, by a particular product or by a particular geography - are things that are very logical and reasonable to expect, but up until now we have not had the basics in place to be able to do that."

The ability to drive higher operational efficiency in the restaurants is another area set to benefit. "Labour scheduling, inventory management and many other things that were not previously available at the branch level are now becoming possible as a result of this focus on standardisation," says Rawal. "If you look at a restaurant, food and labour are the top two costs. So if we can help manage that better - which is what we'll do with the new inventory and labour management systems - we'll be making a dramatic impact to our bottom line."

As well as revamping the customer-facing side of the business, the back office is also set for an overhaul. "One of the initiatives that we're very actively engaged in is laying the foundation for consolidating what has historically happened in different parts of the world at each of the Burger King offices," he explains. "We don't need different people, different processes, different technologies - and all the associated costs - when we're doing very similar functions, such as financials, HR, fixed asset management and other back-office processes. Now we have a platform in place to manage all of that centrally, we can absorb the work that was happening outside into that platform, leveraging the process capability and a shared services environment. That is making a huge impact to the corporation."

A key decision was to embrace the concept of outsourcing, which has long been a key strategic area for Rawal, a 20-year exponent of the model. "We all have limited resources, whether that's measured in dollars, people or time, so we need to think about how best we want to apply those resources," explains Rawal. "And if I can get more value for my company by applying my limited resources to do something strategic rather than just keeping the lights on, then I have no problem outsourcing certain of those day-to-day functions. My view has long been that if they're not core competencies, then we don't necessarily have to expend the time, effort and resources doing them. It's worked successfully at other organisations I've been involved with, so I've seen first-hand the kind of results that are possible.

"At Burger King, we have outsourced the data centre, the helpdesk and the break/fix support; we've also outsourced all the software maintenance and development," he continues. "As a result, the IT team we have here is now primarily focused on project management and business analysis."

It's an approach that has served Rawal well; outsourcing non-core systems and parts of the IT operation allows him to concentrate on delivering the long-term roadmap for Burger King's reorganisation of its technology function. As he puts it, you need to "clean up the essentials" before embarking on anything bigger. "While innovation obviously has a huge role to play in the longer-term, I feel a responsibility to clean up the basic things that need to be done first - standardise systems and processes, maintain cost-effectiveness and deliver stability on that over a period of time - before I feel able to jump into the latest buzz topic out there. We have to lay the foundation and then demonstrate success with that foundation before the business will seriously consider doing anything more ambitious."

Nonetheless, he is conscious of the fact that such restructuring, whilst important in terms of putting the right building blocks in place, is not in and of itself going to deliver significant value-add over the long-term. The second part of the challenge is to become a partner that develops and delivers new ideas. "Innovation is not just about technology, it's about people," insists Rawal. "It's about having people with the capability to build a relationship to influence the business in a very credible way. It's developing and selling ideas and having them become a part of the organisation's own idea of itself and what it is possible to deliver on. To this end, I've developed a training programme where I hire people and run them through four assignments over six months - three in IT, one outside of IT - to develop different skills and ways of looking at the same problems. It's about the people being transformed themselves; if you get that right then ultimately, the team will deliver on the innovation end of things."

As Rawal points out, this sense of teamwork is a key reason for Burger King's success - and thanks largely to the efforts of its softly spoken CIO, IT is an increasingly important part of the company's corporate team. "Credibility is extremely important," explains Rawal. "It's important in everyday life, whether it's at church or school or at home; it's important at work. And I think it's the foundation of any good relationship. It allows for a lot more opportunities once you have a decent relationship in place based on credibility, and so a major part of my focus has been on pushing the IT organisation to be more of a business partner. Of course, we still have full accountability and responsibility for the services delivered, but we are increasingly looking at improving the relationship management aspects of our role and what we can bring to the table in terms of business value."

Even so, he concedes Burger King still has much to accomplish. "We need to catch up before we start saying we're going to lead," he says. "A few years ago we didn't even have a standard POS and didn't collect any data in our restaurants; I could not have told you how many Whoppers we sold in the last hour in a particular restaurant. When you're so far back in the pack, to start shouting, 'Wait, I'm gonna lead' is pretty crazy."

One area he is committed to looking at, however, is how to better engage the consumer. "We need to consider engaging them in every which way we can before they come into the restaurant, when they're at the restaurant, and as they start leaving the restaurant," he says. "And I think mobile apps and social networks are going to be the means by which we reach out and touch consumers. For example, we are already the leader in terms of allowing our guests to have their sandwich exactly the way they want it. But what we want to do now is allow that guest the opportunity to have it their way before they arrive, through their mobile device, via the internet at their desk, wherever; to start looking at, to start thinking about, to start planning their sandwich so it is just the way they wanted it when they come in; to really have the experience enhanced with things that we can provide based on their preferences from the past or other demographic information that they made available to us previously. And then how do you maintain that structure so it stays upright when people change, when menu items change, when price changes, when restaurant managers and marketing managers change? So we need to do everything so that it is sustainable long-term."

For Rawal and his team, such attention to detail is a no-brainer; after all, it's an essential part of ensuring that the customer - as well as the burger - remains king.