Spearheading growth with IT: Frank Bandura, financial director of Carluccios

Squid ink pasta is one of the glories of Italian cuisine, with a subtle and delicate flavour that is entirely its own. But it is also jet black in colour, and this is sometimes a bridge too far for restaurant customers, even the sophisticated urbanites who frequent the rapidly growing Carluccio's chain of restaurants-delicatessens.

Squid ink pasta is one of the glories of Italian cuisine, with a subtle and delicate flavour that is entirely its own. But it is also jet black in colour, and this is sometimes a bridge too far for restaurant customers, even the sophisticated urbanites who frequent the rapidly growing Carluccio's chain of restaurants-delicatessens.

"It is an innovative dish, it fits in with our credentials of being different and unusual, but it did not do as well as the dish it replaced," says Frank Bandura, Carluccio's financial director. It might seem unusual for the finance director of an Aim-listed company to get involved in decisions about pasta, but the IT systems Bandura has set up allow him to track the performance of each individual dish.

"Because we are able to track we were able to make a decision we tried it, and we took it off," he says.

Bandura runs a lean operation. As well as being the financial director, he is also the IT guy, having outsourced everything else to a variety of providers. But that does not mean he underestimates the importance of IT.

"I have always seen IT as a way of delivering productivity and growth, and have always seen it as as a way of understanding the business."

Bandura's defining moment with IT came early in his career. After training at KPMG as an accountant, he moved to Poland to join Pizza Hut (then owned by Pepsi) as finance manager as it began an "experimental" launch which eventually grew to 22 stores.

"It was my first experience of an organisation with literally nothing - I had to build it all from scratch," he says. "All the training I had received, all the audits I had done in big banks with all their resources - it was almost irrelevant. I had to really think about what to make visible and by the end of it I really understood the business processes," he says.

After 18 months the Polish experiment was clearly a success, and Pizza Hut invested in a "proper" accounting system from JD Edwards.

"After all the effort I had been putting into IT, it was suddenly transformed," Bandura says. "This big system gave you the ability to categorise information, you could easily get the information you wanted. I though, 'wow, this is what you can do' and I have always carried that with me, always seen IT as a route to productivity."

Bandura stayed with Pepsi for a total of seven years, then had a spell with Italian pasta maker Barilla before joining Carluccio's in 1999. At that point the company turned over slightly more than £1m a year and consisted of a single store, but was already planning the growth that has taken it to 36 stores and £64m in turnover. The company was operating with some fairly basic systems and Bandura's first priority was to put in a new accounting system.

"By the time we put in the system in 2001, our turnover had grown to £5m to 6m, which is not a massive amount of money," he says. "So it was quite a difficult sell to outline the benefit of what was our first large investment that was not focused on the operation."

"I am non-technical, so I explain things in a way that does not talk about hypertext links or XML, but in terms of business processes and business improvements in as plain English as I can," he says. The lack of integration between existing systems was leading to expensive debt write-offs as well as creating problems managing suppliers. "I was able to justify the investment in a way people could understand: if you cannot pay your creditors efficiently and effectively they will be less willing to give you credit, which could affect your ability to open a new store."

In the early stages, funding was a big issue. Carluccio's had a "modest" business plan to grow to 20 stores by 2004, but had only secured funding for the first three.

"Decisions were much more difficult back then, but we soon realised we were going to blow it out of the water," says Bandura. ""We had started the right thing at the right time: people wanted a less formal way of eating out, but with a better quality of food and with a strong brand."

By the time the third store opened the concept proved successful enough to secure the funding to continue to grow profitably. Currently, the chain is set to expand at five new stores per year, but this brings with it new challenges. A successful restaurant chain is by its very nature scattered over a wide area, and many growing businesses have struggled to keep control over cost, quality and concept as their empires expand. Many well-known high-street names have solved this problem by franchising, but although Carluccio's is prepared to franchise internationally, the UK stores are all company-owned.

Timely, accurate information is therefore key to maintaining control, and Bandura has developed his own portfolio of systems to provide this.

"This sector has not attracted a significant level of IT development, so there was not a plethora of off-the-shelf systems out there," says Bandura. "But the web has helped us - what we have now is a couple of web-based systems that help us look at labour scheduling and stock control."

Labour scheduling is key in a business that spends around a third if its turnover on people: get it wrong and you are out of the game.

"When we looked round the business, we had 16 or 17 stores and 16 or 17 ways of tracking those numbers," says Bandura. "Some people had very old spreadsheets that were full of incorrect formulas and percentages. Others had developed their own ways of doing it which were very colourful with lots of information in them, but very hard to follow. "

With the firm's spreadsheets saying one thing and the manual payroll system saying another, it was impossible to get a grip on this vital area of the business.

"As soon as we replaced the system it transformed that part of the business: we saved 2% to 3% of our overall labour cost," he says. "I felt it clearly had to be right to get away from a paper-based system where we received these great big envelopes, compared them with the managers' estimated and ended up scratching our heads. But I had no idea it would save us money."

The other key to success in the food business is achieving the right margin on the food you sell, which sounds simple but is another key point of failure for restaurateurs. Bandura's other web-based system allows him to track actual versus theoretical margins on an item-by-item basis - hence the absence of squid-ink pasta on the current menu.

"We can see on an individual restaurant basis how much is wasted, we can challenge it, and because it is web-based people can see that element of the business wherever they are," he says.

Tracking is also vital because the Carluccio's concept is also very unusual: you can go in for a coffee at 8am or leave after a substantial evening meal at 11pm. In between the store provides a constant stream of snacks, lunches and take-home products from its delicatessen counter. This mixed model certainly sweats the assets, but makes for some tricky decisions about how to allocate resources.

"What you are combining is economic and commercial reality with a philosophy," says Bandura. "The only way you can do that is by tracking. Our IT systems give us the granularity we need to look at it by time of day, by item and by location."

That is not to say that Bandura's tracking system have replaced the creativity and innovation that drive a restaurant business. But when people come up with new ideas for presentation and service, Bandura is able to see the results.

"Very often it is not conclusive, there are many reasons why customers make the decision to go back to a place," he says. "But you need the ideas, you need the gut feel but you also need to know if the gut feel is working. That is how customer-facing people can generate organisational change."

Bandura's role has expanded with the business. Since Carluccio's listed on Aim in 2006 he now spends a lot more time out of the business dealing with analysts and stockholders, which is an additional burden, but one he enjoys.

"Once can get carried away with success, so it is useful to get someone else's perspective," he says. "In our business, everyone is either a customer or a potential customer, they will all have an experience of eating out, good or bad."

This means he will probably need to seek outside help for his next "big project": bringing the systems he has created together.

"We have got these great systems, they are best of breed, and they have helped us achieve great reductions in waste of labour and food," he says. "Now we need something that allows us to see all the various aspects more easily." However, he is not tempted for the moment to either create an in-house IT department.

"If I had an internal resource some things might be easier to manage, projects for instance," he says. "But I am not convinced I would get a better service - with our current suppliers we benefit from their experience of other customers."

Nor does he wish to abandon the long-standing relationships he has with his suppliers and look for a single outsourcer.

"The downside is that you do get creative tensions between these various people, and I am sure I have got a whole load of that to come when I start this project," he says. "But having a single supplier would have an inevitable cost, and I have never found anybody that could do it. I have never been convinced that with an organisation like ours that has so many specific needs that there is an organisation that could deliver an effective one-stop shop."

Although the success of Carluccio's and rivals such as Wagamama and Strada has made the restaurant business more attractive to suppliers, as far as Bandura knows there is still no across-the-board IT product available to address all of the needs of a restaurant chain. So, for the foreseeable future, Carluccio's IT systems, like its pasta, will continue to be hand-crafted.

"A lot of companies want a system that provides everything they need, but when you look around you find it does not exist, or if it does you can't afford it. So you pick off the bits you need," he says. "We have made the core investment, now we need to build on it."

Current Role

Title: financial director for Carluccio's since 1999

Turnover (2007): £64m

Number of stores: 35 in the UK, one in Dublin

Listing: Aim listed since 2005

Responsibilities: strategic direction of IT throughout the organisation

Achievements so far: electronic point of sale throughout each store. Payroll and stock via a web-based system providing visibility and control for operations managers from any PC that has web access.

Next big projects: intranet, data warehouse, telecoms infrastructure

CV

Born 27 June, 1966

Bsc. in accounting, Norwich

KPMG chartered accountant

Finance manager, Pizza Hut, Poland

Various financial roles, Pepsico Europe

Finance Director, Barilla UK




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