- Shake Shack's enterprise resource planning systems upgrade, dubbed Project Concrete, has cost about $500,000 in general and administrative (G&A) expenses so far this year, according to CFO Tara Comonte, during the company's Q1 2019 earnings call.
- The burger chain expects its G&A to increase to support Project Concrete-related expenses. Shake Shack expects to spend between $66.4 million and $68.2 million on G&A this year, including up to $3.5 million on Project Concrete in 2019.
- This is "one of the most meaningful" back office investments the company is making, said CEO Randy Garutti, during the call. The project includes implementing systems and processes to support finance, procure-to-pay, inventory and human capital management solutions, according to Shake Shack's latest 10-K report.
Technology is enabling the restaurant industry to focus on personalizing the customer experience. As a result, there has been a slew of new CIOs added to the industry.
Shake Shack also announced the addition of its first CIO, Dave Harris, in February to oversee "all aspects of technology." The CIO role came in addition to a number of other C-suite additions, including chief development officer, chief global licensing officer and chief marketing officer.
Project Concrete was announced during the company's Q4 2018 earnings call as an effort to explain Shake Shack's transformation efforts.
The burger chain spent about $1.3 million in one-time operating costs and $1.1 million on Project Concrete in 2018, though it expected to spend $2.5 million on Project Concrete. This year Project Concrete is expected to account for about $4 million in capital spend, according to the report.
The transformation initiative is "touching every member in every Shack," said Garutti. But while the upgrade will impact all facets of business, it's back-office-facing.
Shack Shack's current back-office computer systems are meant to aid the management of domestic Shack locations and enable real-time labor and food cost management tools, according to the report. The tools in return send data to its headquarters and will automate the time manual labor goes into administrative tasks.