Windows NT Server, SQL Server Dish up a Business Solution for Restaurant Chain

Dianne Calvi

March 10, 1995

In the volatile restaurant business, keeping customers satisfied is a formidable challenge. But it is critical to success. For more than 30 years, Chart House Enterprises, Inc., has upheld a reputation for excellence at its upscale restaurants. The result: Chart House operates 65 restaurants across seven time zones and reports annual sales of $150 million.

The management of the Solana Beach, California-based company attributes much of its success to loyal customers. To reward their patronage, Chart House launched the Aloha Club Frequent Dining Program in October 1993.

Because the program was experimental, Chart House turned to an outside fulfillment house for processing membership applications and dining transactions. Every day, all 65 restaurants had to overnight forms to the fulfillment house by courier. The data was then entered manually from the hard-copy forms into a minicomputer.

From the start, customer-service problems plagued the project. Membership packets took 12 weeks to arrive, applications were lost, and dining transactions were improperly credited because of illegible forms. Worse, customer-service representatives answering Chart House's toll-free number had no access to customer data, which resided on the fulfillment house's minicomputer. To respond to a customer inquiry, they had to fax a request to the fulfillment house and wait—often two or three days—for a response. Recalled John Townsend, director of information services for Chart House, "We did a disservice to customers, probably driving them away from the restaurant rather than encouraging them to come in more often."

Redesign, re-engineer

The Aloha Club problems put Chart House at risk of losing its biggest competitive advantage: excellent personalized customer service. So the firm decided in March 1994 to turn to WinResources Computing, Inc., a San Diego-based Microsoft Solution Provider, to redesign the Aloha Club completely. "Time was critical," said Bob Karp, president of WinResources. "Chart House management realized that the success of the program would be jeopardized if we didn't move quickly, because customer satisfaction with the program was very low."

In less than a month, WinResources completed the requirements analysis and suggested a complete redesign of the system. It identified four key objectives: improve access to the data; develop a system that could easily integrate with future accounting and point-of-sales applications; create an integrated reporting and analysis process; and minimize training costs.

Because Chart House had already installed 486/66 computers running Microsoft Office Professional and a Visual Basic-based menu application at the restaurants, WinResources suggested a Windows NT-based client-server solution.

The Windows NT Server operating system offered 32-bit processing for speed and capacity, along with the data security, reliability, and administrative features found on many high-end minicomputers. It also offered the same Windows-based APIs on both the client and server, which meant that Chart House developers wouldn't have to learn two sets of APIs to develop applications. All this would help Chart House keep development, training, and administration time to a minimum.

SQL Server steps up to the plate

Chart House then evaluated Microsoft SQL Server for membership transaction processing. Because of the scalability of SQL Server and the relatively low cost of the hardware and software, Chart House decided to get SQL Server and a Compaq ProLiant Dual Pentium 90-MHz computer with 128 megabytes (MB) of memory and seven 1-gigabyte hard disks to run the Aloha Club database. The 300-MB Aloha Club database contains 225,000 member records and more than 500,000 dining transactions.

At the time of the Aloha Club system evaluation, Chart House was also making plans to migrate all the company's data from the Honeywell Bull minicomputer to a central server by the end of 1995.

To accommodate the company's mission-critical applications, Chart House needed a powerful and secure relational database management system. "With symmetric multiprocessing support and 32-bit capacity and performance, Microsoft SQL Server provided us with the right combination of power and flexibility," said Townsend.

By the end of 1995, Chart House expects to migrate all the company's accounting and financial data from the Honeywell system to SQL Server. Townsend expects no degradation in server performance. "By taking the approach we did, we didn't have to make a huge investment up front. It's much easier to invest in a $15,000 server than a quarter-million-dollar minicomputer," he said.

Taking advantage of reusable components

After Chart House finalized the decision to build the back end on SQL Server, WinResources chose to develop with the Visual Basic programming system and Microsoft Access. "From the beginning, Chart House realized that having a development tools strategy is very important. It wanted to leverage what it already knew, and it wanted to develop applications across the corporation using a standard set of tools. It also wanted to take advantage of reusable components, including VBX controls and, in the future, OLE Controls," said Karp.

Assigning two full-time developers and one part-timer to the project in April 1994, WinResources identified five major development modules of the new system: new member application entry; restaurant dining transaction entry; posting and exceptions reporting; executive information system; and the customer service desk.

The Frequent Diner Management System.

The first development module entailed distributing new member application entry from its central location to the individual restaurants. Instead of sending membership applications to a single location for data entry, staff at each restaurant now enter the information daily into a local Microsoft Access database. To input the data, the restaurant staff uses a membership application developed in Visual Basic. The application data is then extracted from the Microsoft Access database into a text file, sent by modem to a telecommunications server at Chart House headquarters, and posted to the SQL Server database. Before the data is processed, Microsoft SQL Server performs exception reporting and error checking.

The new procedure eliminated courier costs, reduced the time needed to enter member information, and required almost no training. "The restaurants were already using our Visual Basic menu application, so we were able to leverage what they already knew. That is one of the nice things about Microsoft technology," noted Karp. "We were able to develop an application that looked and acted a lot like the other applications they had on the desktop, thus minimizing training."

To improve the data reliability, magnetic-strip readers now enter dining transactions electronically at the restaurant. Each member has an Aloha Club card that is put through the reader at the time of purchase. Dining transaction data is batch uploaded nightly to a telecommunications server at headquarters before being posted to the SQL Server database. Chart House has virtually eliminated dining transaction errors by using stored procedures to enforce business rules built into the database. For example, the data is checked for transactions under $10, which do not qualify for Aloha Club.

In addition to Veriphone automatic entry, Aloha Club dining credits and other transactions such as gift certificates can be independently posted by customer-service reps.

The third module of the system—a Visual Basic posting routine—was developed for use on both membership and dining transaction data. Data from the telecommunications server is posted to the SQL Server database; during this posting, SQL Server performs exception reporting. In many database systems, exceptions are simply written to a log. By taking advantage of SQL Server's mail-enabled extended stored procedures, WinResources could integrate the exception-reporting system with electronic mail. As Karp explained, "We developed a Visual Basic program that finds transactions of closed accounts, automatically creates a Word customer letter using OLE Automation, merges the account data from the SQL Server database into the letter using mail merge, and automatically sends the letter via Microsoft Mail to the administrator. The letter notifying the customer of his closed account is then immediately sent out. All this with only a few lines of Visual Basic and five lines of WordBasic."

From this screen, customer-service reps can view membership information and respond to members' questions.

Management reporting was another critical component of the new system. Chart House management wanted to track the activity of the program and perform financial analyses. To develop the activity reports, WinResources used Microsoft Access. Because users at Chart House were already familiar with Microsoft Access, they can now modify the existing reports and develop new reports on their own.

To perform the financial analyses, WinResources developed an executive information system in Visual Basic for Applications using Microsoft Excel PivotTable technology, which enables Chart House management to bring in the data from the SQL Server database and examine it from a "bottom-line" perspective. "With the new EIS system, our executives can now effectively assess the financial performance of the Aloha Club Program," Townsend said.

To improve Aloha Club member satisfaction, customer service was completely redesigned. After defining the new parameters, developers created a "customer-service desktop" in Visual Basic. Using standard data-aware controls included with the database engine in Visual Basic, they readily created an easy-to-use front end to the SQL Server database. The new interface allows customer-service representatives to get the data they need in a matter of seconds and respond immediately to member inquiries.

As soon as development was completed, WinResources began the conversion from the minicomputer at the fulfillment house to the in-house SQL Server. According to Townsend, SQL Server's administration tools made the migration relatively painless. The conversion of the 225,000 membership records to the SQL Server database was accomplished in just two days.

Aloha Club increases sales

The new Aloha Club system was fully deployed by early July 1994, two months ahead of schedule; the time needed to deliver membership packets has decreased by 70 percent; and members get answers to their inquires in a few seconds rather than a few days. Member dining transactions are accurate and timely. As a result, members have shown their satisfaction by returning to the restaurant more often. "Using the Microsoft Excel incremental sales PivotTable, we have tracked an eight percent increase in sales thanks to the Aloha Club," said Townsend.

Chart House is also saving money. The fulfillment house fees, courier and fax bills, and costs of correcting data-entry mistakes added up to a hefty sum. Before moving the Aloha Club program in-house, Chart House was spending more than $750,000 a year to maintain the program. The entire new system, including hardware, was developed in less than four months for a cost of $170,000. Maintenance costs are now minimal, and Chart House expects to save approximately $400,000 a year.

Aloha Club is just the beginning for Chart House; technology will play an increasingly important role in the way the company does business. Later this year, Chart House plans to deploy a Windows-based point-of-sale system from Hospitality Systems, and has already installed it in 16 restaurants. By year's end, the firm hopes to move all its accounting data from the Honeywell Bull system to SQL Server. "Our strategic decision to establish the Microsoft family of development tools as our corporate standard continues to fulfill our needs to rapidly deploy scalable, competitive applications," Townsend said.

For more information

For more information about Microsoft products, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Customer Support Centre at (800) 563-9048. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To contact WinResources, call (619) 689-1200.

Dianne Calvi is president of ITHAKA International, a marketing consulting firm serving high-tech companies. In her spare time, she enjoys skiing, reading, and playing hide-and-seek with her two kids.