McDonald's is trying to make the choice for you with McPick 2 - the fast-food giant is integrating decision technology into its menu to reduce customer hesitation when ordering. McDonald's goal is to make fast food faster.

Last month, the burger chain acquired$300 millionacquisition of personalization and decision logic technology companyDynamic Yield, which the two companies called the first deal of its kind in the fast-food industry. A week later, McDonald's also investedPlexure$3.7 millionin mobile app developer. These investments align with McDonald's larger strategy.

"The reality is that technology spending will remain high for some time," McDonald's Executive Vice President and CFOKevin Ozansaid at a conference in March. Technology is a competitive weapon, and McDonald's is willing to bear the cost. "We like this kind of spending because it's spending for business growth."

"We like this kind of spending because it's spending for business growth." - Kevin Ozan, McDonald's EVP and CFO

So, between flipping burgers and frying McNuggets, McDonald's has entered the tech arena. So have Domino's and Starbucks - customers get a hot pizza or espresso along with a side of tech service.

McDonald's investments are putting pressure on CIOs at other restaurant companies. Today, the responsibilities and composition of a restaurant CIO's role are less focused on internal infrastructure and more shifted toward consumer-facing technology, inventory and labor management systems, e-commerce, social commerce, cybersecurity, and M&A activity.

Technology drives competition, and the restaurant industry is widening "the gap between the haves and have-nots," founder and chief strategist of global restaurant consulting firm Aaron Allen & AssociatesAaron Allensaid in an interview with CIO Dive. Companies with technological capabilities often loudly tout their gains, which is "what McDonald's calls building a 'moat' through technology."

This technological "moat" separates the Big Mac maker from competitors and is reinforced by acquiring young tech companies.

The new CIO prerequisites

Influenced by McDonald's investments, restaurant companies are looking for CIOs with experience in acquiring new technology or who have been part of acquisition teams requiring integration or merger, Allen said.

McDonald's Global CIODaniel Henryworked at American Airlines for over a decade before joining the fast-food chain. According to LinkedIn, Henry served as Vice President of Customer Technology and Enterprise Architecture at American Airlines from 2012 to 2017, coinciding with American's historic merger with US Airways in 2013.

Consumer technology that the restaurant industry is exploring or investing in also requires professionals beyond the tech field. Unique customer experiences stem from a seamless blend of data, digital products, and marketing expertise.

"If you can identify the customer, even if the food is pretty bad, they'll still come back," CTO of restaurant and hospitality software provider FourthChristian Berthelsensaid in an interview.

Marketers skilled in personalization are partnering with CIOs to create digital space experiences. WhenChris Andrewsbecame Pei Wei's first CIO in November, he was responsible for digital innovation, reporting directly to Pei Wei's Chief Marketing and Digital OfficerBrandon Solano.

"If you can identify the customer, even if the food is pretty bad, they'll still come back." - Christian Berthelsen, Fourth CTO

Andrews said the intersection of technology and marketing emerged about five years ago. "Brands are now looking for people with digital capabilities who can partner with marketing" to streamline omnichannel experiences. Without unified planning between technology and marketing leaders, conflicts over responsibilities can arise. If a CMO sends an RFP to vendors, the CIO will want to be involved. There have been past battles over "controlling budgets," and the lines between technology and marketing have become "blurred."

The Panera model

Whether a technology product development team can inspire trust among stakeholders or shareholders in processes and investments is almost as important as the technology itself. Without such talent or transferable skills, restaurant companies struggle to justify technology investments, especially when corporate boards lack digital literacy.

Allen said the restaurant industry has long held a "wait-and-see" attitude. Digitally literate companies instead hold the attitude that "this is an important strategic lever," thereby elevating the CIO's value.

Panera Bread's board initially couldn't see the return on then-CEORon Shaich'sheavy technology investments. His cutting-edge technology initiatives led to Shaich leaving the company in 2010, returning to the CEO role in 2012. Around that time, Panera "had the opportunity to go against the grain" and "bet on digital, loyalty, delivery," while other restaurants stood still, Shaich said in a 2017 Mad Money interview. Shaich has since stepped down as CEO to pursue personal interests but remains on Panera Bread's board.

Some companies don't view technology as a means to improve overall service levels but merely "follow the crowd in loyalty programs, service tablets, etc.," Allen said.

"If you're still using pagers from the 1980s, it's hard to look cool." - Aaron Allen, Founder of Aaron Allen & Associates

Under Shaich's leadership, Panera Bread developed the Panera 2.0 prototype in 2012, combining "digital access with operational process improvements" to enhance customer experience through technology, according to the company's fiscal 2015 annual report. By 2015, 300 Panera locations had been "converted" to Panera 2.0, focusing on e-commerce, delivery, and pickup solutions. The company noted: "Although these investments require us to bear costs upfront, we are increasingly confident in the wisdom of this decision."

At the time, Panera aimed to boost sales through customer-facing touchpoints such as web, mobile devices, and self-order kiosks. By the end of 2015, 16% of company sales came from digital channels, and 23% of converted store sales came from Panera 2.0. As of December 27, 2016, just before the fast-casual chain went private, Panera 2.0 had been "substantially completed," according to Panera Bread's 2016 annual report.

Where are the quick wins?

Allen said Panera's board initially shied away from new technology due to concerns about high costs and obsolescence by deployment time. Consider full-service restaurants "placing bulky tablets on tables" or old pager systems, "if you're still using pagers from the 1980s, it's hard to look cool."

Self-order kiosks, mobile apps, omnichannel solutions, and delivery were once forward-looking concepts. Allen noted that delivery is a relatively quick way to introduce technology and gain fast returns, as seen with Applebee's and IHOP. But delivery also has costs because "it's not technology they own," and "they're essentially teaching customers to go there" to use delivery options. Delivery is great initially because it doesn't require heavy capital or major infrastructure investment.

Allen said restaurants are now "at the mercy of" delivery-native platforms like Uber Eats and GrubHub, which have transformed the delivery landscape. Restaurants are at a turning point of reinvesting in internal systems to pull customers back to their own services. But innovation and disruption are not without risk.

Although Panera Bread was one of the first restaurants to offer self-order kiosks, other fast-casual restaurants are still experimenting. "Make it as easy as possible to take money from customers," Andrews said, "but you can't always choose how customers interact with you."

Build smarter, not harder

Building technology in-house carries risks. Some companies prefer to take risks, like Domino's, whose IT recruiting website says it "wants the IT department to think boldly" and "forget about cubicles and silos." Building technology in-house is "almost an impossible task," Berthelsen said, "I think very few companies have the deep pockets and deep understanding to do it well."

Typically, experienced CIOs rely on vendors rather than building solutions in-house. Otherwise, "you have to be McDonald's scale, and even they face difficulties," Berthelsen said. Growing companies like McDonald's invest in proprietary technology, bringing short-term sales and customer satisfaction gains, but without guarantees of future sustainability or reliability.

Pei Wei once replaced a fully custom online ordering application because "there are two schools of thought," Andrews said: buying an off-the-shelf product or building around the company's specific needs. Andrews found Pei Wei's custom app "very unstable and costly," so he issued an RFP and chose Olo, a leader in the online ordering industry.

But many restaurants are built on industry-specific systems and vendors, even when not the best choice. Vendors "manage to lock restaurants into hardware and software," Allen said. This lock-in makes it difficult for restaurants to change, scale, and modernize at the pace of consumer technology, leading to integration difficulties, Andrews said. However, over the past three to five years, more POS vendors are opening their ecosystems to more solution providers.

The evolution of traditional POS systems is part of a larger digital narrative. If a restaurant lacks a clear digital transformation plan, it is "fundamentally missing something," Berthelsen said.