SaaS point of sale systems are becoming more and more mainstream in the restaurant and retail industries — chances are you’ve heard the term yourself. But what exactly do all those letters mean?
Software as a Service (SaaS) refers to software that’s licensed on a subscription basis; the software is located on external servers, which are made accessible via the internet. Compared to the traditional model of physical "on-premise" software, which needs to be installed and maintained on an on-site computer, SaaS-based POS software is leased to customers and downloaded as an application.
Now that might sound kind of confusing, but let’s take a look at just how SaaS POS systems work through the benefits they offer restaurateurs.
The Benefits of SaaS POS Systems
SaaS technology was first introduced back in the 1960s and is taking over the POS marketplace. In fact, 60% of new merchants ask for cloud-based POS systems, and experts predict over a 50% adoption rate of SaaS technology by 2022.
In the restaurant industry specifically, SaaS technology has made huge waves. Reforming Retail data shows that more than 25% of quick service restaurants, fast casual restaurants, and cafes are now using SaaS, while 35% of full service restaurants and 95% of food trucks are as well.
As cloud-based POS systems become more common in the restaurant industry, there’s a growing realization that cloud-based solutions provide a more cost-efficient and, typically, better experience overall than more outdated legacy competitors. Here are nine ways SaaS POS systems triumph.
1. Lower Cost
Traditional POS vendors require restaurant owners to invest tens of thousands of dollars to acquire computer hardware and software. And after these systems have been purchased, restaurant owners then need an IT professional to come in and set up the computer, implement the back office server, and install the software. In addition, restaurants have to pay to maintain and upgrade the system as it gets outdated or requires new features. These costs all add up in a big way. But those are legacy and traditional POS systems.
Restaurants that use SaaS point of sale systems pay a monthly or yearly subscription fee for the rights to use the software application. While restaurant owners still have to purchase the necessary hardware to run the software, cloud-based POS systems are less bulky and far more cost-effective than the computer systems that traditional POS customers purchase or lease from their providers.
Instead of investing thousands in a POS computer and software upfront, cloud-based POS systems only require restaurants to cover the cost of the tablet hardware (usually between $1,000 - $3,000) and the first month’s subscription fee (typically $50-$150/month) to acquire the system.
2. No Long-Term Contracts or Commitments
Legacy POS providers are often quick to offer customers discounts on upfront costs for hardware and software because they know they’ll make that money back tenfold with the hidden costs of upgrades, support, and other charges over the customer’s lifetime.
As time goes on, restaurant owners spend more time and money maintaining and updating legacy systems. Although legacy POS customers often find a long list of complaints with their systems, they worry that switching providers would take just as much time and money, cost an arm and a leg to get out of their current contract, and result in a similarly unhappy commitment.
When paying a monthly subscription for a SaaS POS system, restaurant owners aren’t stuck in a long-term contract or commitment. If they’re unhappy with the software or provider, they can cancel their subscription at any time without worrying about losing thousands of dollars. Because the vendor is constantly working to keep their business, SaaS models tend to lead to better, more attentive customer service.
SaaS POS vendors earn their customers’ business month after month, so they can’t simply disappear once they acquire a new customer. Instead, they strive to live up to the service aspect of SaaS by troubleshooting and releasing updates with new features on a regular basis, and by making themselves easily and readily available to their customers. This results in a better and more successful POS experience.
3. Easier Installation
Although most SaaS POS vendors are involved in the on-site installation process to make sure new customers get off to a good start with their system, the process is still far more straightforward than what you get with traditional POS systems. While there’s still some wiring and general networking required to set up the system (particularly in a full service restaurant environment), the SaaS POS software doesn’t require an IT expert to be installed.
Instead, once the network is configured correctly and the terminals, printers, and additional equipment are connected properly, the restaurateur can simply download the software to all of their connected devices over the internet. Some POS providers have simplified the installation process so much that it can be done by restaurant staff in as little as 30 minutes. The team at Red Mountain Theatre Company was able to install their cloud-based POS system in just over an hour with remote assistance and online tutorials.
4. Remote Access
Since SaaS POS software is accessible online and maintained through the cloud, customers aren’t tied to an on-site computer. Restaurateurs who use cloud-based POS solutions can access all of the data and information stored in their POS system remotely and whenever they want.
They can log in to their accounts from anywhere, using any device that has internet access, and view all of the data stored in their system in real-time. This provides a level of flexibility that traditional POS solutions can’t compete with, and is a huge help to owners and operators who practically live in their restaurants. With cloud-based POS software, they’re no longer tied to their back office.
5. Remote Support
Prior to the SaaS model, POS systems could only be supported on-site. Traditional models require restaurant owners to pay an IT professional to come in to troubleshoot and maintain their systems. Aside from being very expensive, this also requires restaurants to wait around for an IT person to arrive and fix the issue before they can continue using the system. A restaurant’s POS is a mission critical system — if it's not working properly or can’t be accessed during business hours, it can be catastrophic to the restaurant’s operations and the guest experience.
SaaS POS systems, on the other hand, can be accessed and supported remotely, which eliminates the need for on-premise support and allows for more timely assistance. Depending on their level of support, restaurant managers or employees can call a critical support line and have many issues resolved quickly over the phone.
6. Regular Software Updates & Troubleshooting
As the name implies, SaaS POS providers are not simply selling a product — they’re selling a service. Instead of having to wait for and purchase yearly software upgrades, cloud-based POS vendors are constantly troubleshooting their software and releasing updates with bug fixes and new features. Rather than waiting for an IT person to arrive and install the latest software, the system updates can be downloaded to all connected devices and terminals over the internet, in real-time.
Not only are restaurateurs able to update their software without disrupting their ability to serve guests, but these updates are also included in the monthly subscriptions that they already pay for. No need to pay an additional cost just to have the latest and greatest version of the software.
7. Secure Data
Traditional POS systems store all of the data that they collect in an on-premise computer. Some store full, unencrypted credit card information and customer data for months at a time, making them incredibly susceptible to data breaches. In 2019 alone, there were at least 7.9 billion records exposed through data breaches, which costs a company an average of $8.19 million.
In addition, the back office server can only store so much data at any given time, so many traditional POS system customers are only able to save customer data for a few months at a time before it has to be removed from the hard drive completely.
SaaS POS systems rely on cloud-based servers to store data. Because of this, many cloud-based POS providers have implemented strict encryption processes so that credit card and other payment data is never saved in the system. Since these systems are hosted online, there’s also an unlimited amount of storage space. If a customer questions a charge from six months ago, a restaurant can log in to their account and pull up the check in seconds to provide proof of the transaction. Restaurants that use cloud-based solutions are also not at risk of losing any data or information when their system crashes since no data is stored on the physical hardware.
8. Offline Mode
Speaking of system crashes, many cloud-based POS systems have an offline mode that allows for continued use even if there’s a network disruption. Employees can continue to place orders, print tickets and receipts, and take credit card payments while offline, so your restaurant isn’t at the mercy of an unstable internet connection.
Legacy POS systems can’t provide this since all data is stored in one main computer. So if the internet goes out, the restaurant is left in big trouble
9. Easy Modifications and Greater Flexibility
Every aspect of the restaurant industry is incredibly fast-paced. Foodservice businesses need a POS system that can keep up. Once software is installed on an on-premise computer, it’s very difficult to make changes to the system. Even something like adding a new lunch special to the menu can require an entire system reboot.
Cloud-based POS systems are more adaptable. For instance, making changes to the dining room table layout or adding new items to the menu can be done in seconds, and changes instantly sync to all connected terminals and devices. If a traditional POS computer breaks down, it can take days or weeks for an IT professional to arrive and set up a new system. In the event a cloud-based tablet breaks, restaurants can simply add a new tablet and download the software application in seconds — and the same goes for expanding the fleet of devices to allow for servicing more guests.
Many restaurant owners are still struggling to abandon the traditional POS models that they have poured their time and hard-earned money into for years, and we get it. But as modern SaaS POS systems become more common in restaurants, operators continue to realize that switching to a SaaS POS system isn’t simply another POS-related investment, but a smarter alternative — a solution to many of the pain points they’ve endured for years with their traditional restaurant POS software.