When Arby’s acquired Buffalo Wild Wings in 2018, it became Inspire Brands. It went on to acquire several more restaurant brands, including Jimmy John’s, SONIC Drive-In, and most recently, Dunkin’ Brands, making it the second largest restaurant company in the U.S.
The question facing CIO Raghu Sagi when he joined the $14 billion company in 2019 was: “How do we deliver digital capabilities across our distinct consumer brands, quickly and at scale?” I recently spoke with Sagi who explained that, to meet this challenge, he and his team are developing a multitenant platform architecture while also driving a full-scale cultural change. What follows is an edited version of our interview.
Martha Heller: What does “digital technology” mean to Inspire Brands?
Raghu Sagi: We refer to our digital technology strategy as our North Star, which includes three pillars: The first is providing the best guest experience at every touchpoint. The second is improving the productivity of our team members inside the restaurants. And the third is delivering innovative technologies to our brands at scale.
What are some examples of innovation in the guest experience?
In the past six months, we’ve built out more convenient payment options for guests, including contactless and curbside pick up. Developed within an agile framework where we test, learn, and scale, these guest experiences are integrated into our ecosystem.
At Buffalo Wild Wings, we have rolled out contactless pay to more than 600 stores. Rather than requesting the check and waiting to pay, with contactless pay, guests get a QR code or a text message, depending on preference, and can pay via their phone.
How about innovation in the second bucket, team productivity?
We are building an advanced analytics data platform in the cloud, which we call the Bionic Model. Because we are a multibrand company, with team members working in seven different restaurant brands, we have a real opportunity to use technology to help with productivity, scheduling, time keeping, and inventory levels. We recently rolled out a self-learning chatbot as part of our help desk to boost productivity and deliver internal support to employees in our support centers.
By building a data platform that provides analytics for each brand, we are able to pilot a solution that uses labor modeling to forecast employee scheduling. We are also piloting an application that runs on a tablet to let restaurant operations managers use predictive analytics for team scheduling and inventory management.
How have you evolved the IT operating model to deliver these capabilities at scale?
Prior to my joining the company, they were just Arby’s. Inspire was formed about three years ago. As we acquired more restaurant brands, each came with its own technology stack, team, and culture. When we thought about the technology strategy that would move us toward that North Star, we decided to move away from fragmented technologies across multiple brands and create a global, digital factory, with a multitenant architecture. Restaurants have not been in the forefront of digital innovation, so we knew that in building this digital factory, we would have to transform our IT operating model.
Instead of having technology teams and platforms, segmented by brand, we asked: “What are the platforms and skills that every brand requires? What is the right organizational structure for a multibrand approach?” We identified digital, data, security, engineering, DevOps, cloud technologies, reliability engineering, and project management as shared services across all of our brands. For example, order ahead is a shared platform capability. It’s also a differentiator for our brands, in addition to personalization and driving the guest experience through data. We continue to add capabilities as part of our operating model.
But we also had to account for the fact that some of the brands require technologies that are specific to their own restaurants. We could not push the same point of sale system, for example, into every brand, because that would require tremendous investment and change. So, we decided to leave some dedicated technology teams in place for each brand, and these teams work closely with the shared services team to improve the guest and operator experience. That is our current operating model.
What architectural changes have you made?
We are building a true multitenant service-oriented architecture for digital capabilities, powered by a data platform to personalize the experience for a particular customer at a particular brand. This way, as we add more brands to the platform, we can deliver new features faster and cheaper, because we have already developed services around menu creation and pricing, for example.
We can deliver digital capabilities to a new brand in weeks—previously this would have taken several months. In the previous model, each brand would have had to develop new digital capabilities themselves, which they could not do because of the amount of investment required. We could add features to the platform, turn on for a single brand to A/B test/pilot and expand to all other brands or turn on that feature to all brands at once. We are talking about serverless functions, Kubernetes, containers, APIs, and services, all hosted in the cloud.
What was key to the cultural change necessary for this transformation?
We received a tremendous amount of support from leadership who knew that if technology, personalization, and data would be differentiating, we would need to build a new team. Eighty percent of my direct reports were hired in the last 18 to 24 months, and they come from a diverse list of industries, including hospitality, retail, and healthcare.
The brand leadership is critical to the cultural change as well. Each brand has a chief marketing officer, who oversees the guest experience. If you’re the SONIC CMO, you are thinking about how to engage a SONIC customer through the drive-in, which is very different than how the CMO at Buffalo Wild Wings, which is casual dining, is thinking about the customer. The CMOs ensure that the technology that goes into the brands enables brand uniqueness.
Another important part of our new culture is the “test and learn” approach, which has to happen in IT and in the brands. For contactless pay, for example, the brand had to get comfortable with the fact that the pilot solution would not be a fully integrated experience at first, and would be different from what they will experience when the solution is delivered at scale.
In moving to the new operating model, what would you have done differently?
When we acquired each brand, that brand had its own small IT team, and everybody knew each other. Looking back, I might have spent more time socializing the new operating model with the brands, so that they got more comfortable with the change before it started. In a three-year period, we went from the fifth-largest restaurant company in the U.S. to the second largest restaurant company in the U.S., which meant a lot of change for everyone. Knowing this, I would have done a little bit more upfront work, and shown the brands that we were not taking anything away from them—we were actually giving them more resources. I would have spent more time showing them how the model would benefit their employees and guests.
What advice do you have for CIOs looking to drive this kind of digital transformation?
You have to be able to tell the story of the new model in a way that makes sense to your stakeholders. If you were a business stakeholder, what story would you tell your customers or franchisees? The customers or franchisees don’t need to know that you are breaking down a monolithic application into a microservices architecture or going to the cloud for agility. They couldn’t care less. What they will respond to is: “How does it help the customer and your business? How can we make minimal investments to test out the concept before investing millions? But once we deliver it at scale, this is the value it will bring to your customers, employees, and your business.” Tell that story.