P I LOT S O F T WA R E
PILOT SOFTWARE
All About Serving,
Not Waiting PRODUCTION: Manelesi Dumasi
Pilot Software is one of the leading ePoS technology providers in southern Africa. As the company looks to continue growing after almost 30 years of success, it is beginning to look at new industry sectors and new geographical markets. MD, Glenn Miller talks to Enterprise Africa about the plans for development with this innovative and important business.
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South Africa’s culinary offerings are some of the world’s best. It is well-known that the creativity of chefs and abundance of high-quality ingredients makes for a truly inspirational restaurant sector. The country is in fact home to the Restaurant of the Year 2019 according to the international World Restaurant Awards where a panel of 100 industry experts judged Wolfgat in the Western Cape to be ‘a small, remote haven of purity and good taste in every sense’.
The hospitality and restaurant sector employs hundreds of thousands of people and is a big contributor to economic performance. And now, with ordering of food deliveries more convenient than ever, the restaurant sector has many opportunities for growth. But you cannot operate an effective restaurant environment without a management system that helps staff and managers streamline day-to-day administration tasks. Historically, chefs and restaurant owners completed
paper spreadsheets by hand, recording everything from stock, recipes, orders, costs, bookings, staff hours, and many more important numbers. This was time consuming and inefficient, so technology has been created to make the whole process much more friendly. One of the leaders in this sector in South Africa is Pilot Software. Founded in 1991 in Cape Town, the service offered by Pilot has become integral to the work of its customers and the company has built a strong reputation over almost three decades.
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INDUSTRY FOCUS: TECHNOLOGY
BY RESTAURATEURS, FOR RESTAURATEURS “The company was started by a couple of Spur restaurant managers primarily because they were sick of doing manual spreadsheets for balancing daily stock and performing daily processes within their restaurant. At that time, there was no such thing as an electronic point of sale (PoS), specifically one that dealt with back office complexities,” details Pilot Software Managing Director, Glenn Miller. “They started building the product out based on the need of themselves in the restaurant. That gained the interest of a few of their fellow franchisees to the extent that they could run it is a business instead of running the restaurant. “Eventually, some of the area managers of Spur and Spur as a corporation became interested
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in the product and they decided that it was something they could successfully implement as a standard in all of their restaurants.” The Spur Corporation is one of the continent’s leading restaurant franchise networks, with more than 570 outlets across Africa and with exposure in Australia and the Middle East. Growth with Spur helped Pilot to reasonably quickly take a position among the market leaders in South Africa with key competitors being mainly international companies or those focussed more on front-ofhouse operations. Eventually, Pilot’s innovation and success was noticed by other big-name players in South Africa’s software industry. “In 1997, a company called Softline, a local accounting and tax software
// OVER THE NEXT THREE YEARS, WE WILL BE FOCUSSING ON WHERE WE ARE NOW AND OUR EXPANSION INTO THE FACILITIES SECTOR // business, was looking to list and they needed acquisitions to boost their offering. They saw Pilot as a vertical market that they were not in and it was software so they were interested. They acquired 100% of the product along with all of the 400-odd sites and the staff count,” explains Miller. “Softline listed, and carried the company for five years,” he adds. “In 2002, Softline were approached by Sage International to do a buyout and delist from the stock market. Softline had been on a buying spree and had acquired several software companies in different markets and different verticals. Sage asked Softline to trim the product portfolio and only focus on accounts, tax and payroll products. “At Pilot, a Management Buyout Opportunity came up and I was approached to assist thanks to my knowledge in the industry and experience with Softline. I became MD and we have been running independently since then. There have been a few changes but we are still a software business focussed on the restaurant industry.” Pilot offers software, hardware, mPoS solutions, staff management programmes, accounting products, and all of the maintenance and support that any restaurant business could ever need. But it is the back-of-house solutions which separates the company from its rivals, and this stems from the ideas installed by the founders back when electronic PoS was still a novel concept. “We focus on the back end, meaning recipe stock and food cost
INDUSTRY FOCUS: TECHNOLOGY
control,” says Miller. “Our view is that if a restaurant can’t tell you what their food cost is (and it’s surprising how many can’t) then they are losing money hand over fist. We are focussed less on the front of house system as everyone has a touch screen and biometric PoS, and we look for on how restaurants manage their stock and how everything works behind the scenes. We have always focussed on that part of the business and that has helped us differentiate against new cloud and tablet-based products as they literally have no backoffice whatsoever.” Today, the company boasts an experienced development team and an account management team made up of ex-restaurant managers who know and understand the intricacies of running a successful operation. “Our customers need flexibility and so we have to have resources available. We run 24/7 telephonically, remotely and on the road. “With sales and account management, we tend to hire from restaurants. We look for people who have worked in front of house and can engage customers, and preferably they will have worked with our product. Because of the churn in the market, we can get access to some very good restaurant managers and they become the drivers of the product. They have worked in restaurants and they
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understand restaurants so they can talk the right language with potential clients,” explains Miller, who has a history in computer hardware sales. TARGETING CUSTOMERS For Pilot Software, not every restaurant is a perfect customer. The system has roots in the franchise model and is well-suited to independents. The very essence of the idea is about helping restaurateurs take control of their business, making their lives easier. That is why you will find Pilot Software at traditional-style restaurants with table service and higher value per transaction. “It’s 95% restaurants and specifically sit-down restaurants,” says Miller. “We prefer to stay away from the quick service market as that is overtraded, and we stay away from the hotel integrated market as that is very competitive with international companies. We look at independent and franchise chain restaurants and the rationale there is that it is typically a more stable environment. People typically spend more money on a sit-down restaurant rather than a QSR so we prefer that profile because of the stability.” When targeting franchises, Pilot looks for individual franchisees and helps them to build a perfect package that works seamlessly before demonstrating to the regional franchise managers and, eventually, the franchise HQ.
// OUR VIEW IS THAT IF A RESTAURANT CAN’T TELL YOU WHAT THEIR FOOD COST IS (AND IT’S SURPRISING HOW MANY CAN’T) THEN THEY ARE LOSING MONEY HAND OVER FIST // “Having built the product over the past 25 years, we believe we have most of the features that anyone could want – but there are always new requests in terms of digital integration, whether its loyalty or mobile payments etc. If we can get a few franchisees on board, we can then approach the franchisor and showcase the work we have done with the franchisees, hoping to be approved as a supplier of PoS products. “We only have one product and there are iterations around that product depending on the customer requirements. Sometimes the user might want a specific loyalty programme integrated and we can work with third parties to deliver that functionality. Third party functionalities talk to the core product through APIs (application programming interface),” Miller explains. Pilot has grown its capability enough, crafting its product perfectly, so that its reputation has spread across southern Africa. Today, you can find Pilot Software in more than 2500 South African restaurants and many across the borders in Mozambique, Zimbabwe, Botswana, Kenya, Zambia where the company has representation partnerships. “We do 10% of our business outside of South Africa. The call centre and administration is handled in Johannesburg and sales and on the
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INDUSTRY FOCUS: TECHNOLOGY
ground support is handled regionally from our local offices. “Johannesburg is our most popular region just because of its size,” says Miller. “There’s also no seasonality in Joburg whereas some of the other regions slowdown at various times of the year but Johannesburg is constantly busy.” In the future, Pilot is investigating expansion opportunities outside of Africa. In a push for continued growth, Miller and his team have identified opportunities with franchise partners in Europe. “We dipped our toes in the water with franchise groups in Cyprus and we hope to grow there. We’ve touched Australia, and we previously had a number of sites in the UK but that franchise has withdrawn from the market. Being a Rand-based product, the exchange rate is in our favour and we can make the product very affordable for any of those Dollar or Pound-based markets. It’s a question of how we can break into the markets affordably, without having sales infrastructure on the ground. It’s certainly something we’d like to do, but
we’d like to do it with partners who have infrastructure and can share the revenue in terms of software licensing.” European markets are particularly attractive to Pilot because of the number of similarities with the company’s existing operations in South Africa. Tax structures are similar, many of the countries are English speaking, and the time zones are complimentary. “So, we are confident that the product will meet the needs for the market and we are confident that we can effectively promote the product,” enthuses Miller. Now is the perfect time to be looking at market diversification and risk dispersion considering the economic climate in Pilot’s home market. A TOUGH SERVING 2018 saw the economy in South Africa grow by just 0.8%. The outlook for 2019 is that slow growth rates will continue. Policy uncertainty, power problems, natural phenomenon and a myriad of other factors have all combined to create a challenging environment for all businesses. According to Miller, for those in the restaurant business, things can be
Pilot Software trusts us with their digital Pilot PilotSoftware Softwaretrusts trustsususwith withtheir theirdigital digital footprint. So should you. footprint. footprint.So Soshould shouldyou. you. www.league.co.za
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especially difficult and that can lead to negative impact on Pilot. “It’s not just our customers, it’s their customers too. Eating out is always one of the first things to get cut when times are tough,” he says. “Business confidence is down across the board and we are seeing that knock-on effect where cancellations are up 20% compared to what they would normally be. We are seeing a lot of the smaller sites close and, for the first time, we are actually seeing a few of the franchise sites close. Primarily it’s in areas that are more economically affected than the big metros. As soon as you start removing visitors or luxury spend from these areas, business is greatly affected.” Because of this atmosphere, Pilot is again looking at diversification – this time in its customer profile. Its product is perfectly suited to work across various industries and the company is keen to explore beyond just the restaurant business. “To manage our own risk, we’ve investigated a move into the facilities market and we’ve put quite a lot of research and development into being able to cater for facilities requirements. We’re talking about things like outsourced canteens, outsourced hospitals, retirement villages and similar. Those groups usually choose one of the big four facilities providers and use them to provide services on a contract basis. We’ve provided proof of concept for all of those big four and we are active with them. Instead of an outright sale, it is a monthly service and we set up as monthly fee for which we provide hardware, software, maintenance, support, development etc. It’s a great
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PILOT SOFTWARE
// WE CAN BE NEGATIVE, OR WE CAN GO OUT AND LOOK FOR OPPORTUNITIES – WE CHOOSE THE SECOND OPTION // model for recurring revenue and our long-term results,” details Miller. He sees this sector as one which can provide major growth opportunities and is gearing the business to make a real impact in the facilities management market. “We see two main growth areas,” he continues. “First is facilities where, at this stage, we don’t have a huge amount of competition. We are working hard to get a foothold there before others wake up to the fact it is a viable market, although it does require a lot of development. Second is traditional cash registers. In terms of trying to grow the cash payment base in this country, there is a big problem with cash registers because
nothing gets recorded. If we are to widen the tax base, we will need some kind of electronic PoS – whether it’s through a fiscal printer or legislated by government – we are watching closely as we feel there are more cash register hospitality sites compared to ePoS sites.” Any business that handles over-thecounter transactions between business and customer, which is currently working with a rudimentary cash register, could potentially benefit from the expertise delivered by Pilot Software. REMAINING POSITIVE After 28 years of successful growth, Pilot Software is anchored alongside the industry’s biggest and best, and tasks itself with remaining at the cutting edge of technological advancements. To drive further progress within this expert business, the future strategy will be centred around expansion in the facilities sector and ongoing integration of products. “Over the next three years, we will be focussing on where we are now and our expansion into the facilities sector. Facilities is a massive sector and if we expand how we want we could easily
double the size of our business by building relationships with a few of the key players. “There is a lot of opportunities around integrations – for example, mobile payments and loyalty schemes – but it would need to add substantial value to the product for us to put big resources to it,” says Miller. The restaurant business still provides the company with a host of valuable opportunities and, considering South Africa’s expertise in delivering irresistible food, quality service and a famously warm welcome, it is clear that Pilot has developed a recipe for sustainable success. “We remain positive as we know that our industry is under pressure. We can be negative, or we can go out and look for opportunities – we choose the second option,” Miller concludes.
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