Information Technology at McDonalds - Case Study Example

Running Header: Report on Leveraging IT in Business Name: Course: Institution: Tutor: Information Technology at McDonalds Introduction Information technology is considered a key as aspect of organizational management because of the ability to improve communication and variability of customer demands. McDonalds is one of the most successful and famous brands in the entire world. Improving the application of Information Technology on the menu of corporate goals and strategic vision is considered one of the company’s corporate priorities. Transaction processing, recording and financial management are some of the most important aspects of the company’s business operations where information technology is applied on a daily basis (Boyer & Rohit, 2009). This has helped improve customer relationship management, marketing activities and sales by enhancing real-time transmission of restaurant inventory and financial data. This paper will focus on the different aspects of McDonalds about its use of Information Technology to support operations. Use of IT at McDonalds In a number of ways, McDonalds Corporation, the world’s largest food restaurant, has revolutionized the use of information technology in the fast food and restaurants industry. Throughout the years, the company has maintained a steady determination to advance technology in various aspects of its business operations both locally and in its subsidiary companies and franchises world wide. In the 1970s for instance, the burger chain giant spearheaded the restaurant industry’s transition from the old-fashioned use of cash registers to computerized point-of-sale systems, which could help track huge amounts of data in a matter of seconds. The transition was a strategic move by the company and helped the company gain competitive advantages in the industry (Boyer & Rohit, 2009). Again, in early 1990s, McDonalds was the first quick service chain to use touch screen computers, making it easer to input orders. This strategic initiative completely enhanced McDonald’s way of doing business and solidified the company’s leading position in the industry, which it has maintained up to date. Since then, the company has kept the wheels of information technology innovation in motion, with tests involving mobile point-of-sale devices and touch-screen self-ordering centers. Considering the immense benefits that the company has gained by pioneering the use of IT in business processes, there is no doubt that the use of IT has been and shall continue to be of great importance to McDonalds (Post & Anderson, 2005). Essentially, McDonald’s use of IT is all about improving the efficiency of its business operations while giving customers a great experience. According to McDonald’s Corporation (2006), the use of IT has great potentials to improved McDonalds’ businesses by simplifying business operations and this has made it possible to serve fresh food with relevant customer experience. Currently, the company is conducting pilot tests on the use of mobile point-of-sale tools which can reduce long queues and allow customers with young children to remain in play areas while making orders. One system involves the crew taking their orders using hand held devices that are remotely connected to wireless printers. The customer then presents the order receipts when paying for orders that have already been transmitted to the kitchen a head of time. McGee, (2003) has noted that information technology applications are applied at McDonalds to enhance efficiency and fast processing of customer orders and to facilitate payment. Data captured can then be gathered in the company’s point-of-sale system and this helps keep track of important information such as customer buying behavior. Additionally, financial data obtained from the company’s point of sale systems is used to determine the performance of individual stores and the company’s overall performance. McDonalds was the first restaurant to use the Internet and Intranet to get connected to stakeholders including suppliers and customers. The company uses the internet to launch various marketing strategies and to get connected to potential customers. On the other hand, the intranet serves as a private communications tool for the company’s internal stakeholders such as employees, shareholders and suppliers. McDonald’s management information system focuses on three different functions: technical, operational and strategic. The strategic function focuses on facilitating the company’s strategic plans, key ratios and marketing analysis and helps in the establishment of further strategies. The technical aspect of McDonald’s information technology focuses on performance analysis and technical reports and helps compare the company’s performance based on past performance. The operational information system helps the company maintain current information such as customer orders, invoice, sales and stock records (McDonald’s Corporation, 2006). In addition, there are various functional units that are responsible for generating important information such as human resource department, financial department and purchasing department. The financial department serves an important function of recording and generating financial information. Management information systems are routinely used by the company’s Human Resources to capture and keep information about staffing needs, absenteeism and skill shortages. Additionally, use of information technology has helped improve the security and privacy of McDonald’s business issues (Boyer & Rohit, 2009). In another initiative, a computer-based program has been launched as an orientation tool for newly hired employees. The e-Learning program is structured such that employees can receive all the required training inside McDonalds. The program content focuses on individual restaurants and hence gives employees a basis for improving performance (McDonald’s Canada, 2008). McDonalds maintains a strict policy that food be served fresh and that it should not be kept for more than a limited period of time. Management information systems are used to direct managers and assist employees in tracking orders. Because restaurants are not consistently busy throughout the day, MIS are used to assist the managers in scheduling employees to prepare and serve food. The MIS also help track the restaurant’s cash flow and guard against inaccurate information and wastage of resources. While the fast food giant is pursuing various technological innovations, it applies a critical process of considering the effectiveness of each technology. This has been the case for instance with digital menu boards. Although these menu boards have been tested in selected markets, they have not been launched globally. However, the menu boards have been hyped by vendors for their innovativeness and flexibility in modifying texts and graphics on displays to reflect change in food and price offerings. In addition, the digital menu boards have helped build brand awareness besides providing free entertainment to customers as they wait to place their orders. The digital menu boards have been tested in the United States and Japan (McDonald’s Corporation, 2006). According to the information obtained from the company’s website, a major driving force in McDonald’s technology deployment is the strategic objective of wining a strategic roadmap for achieving improved brand reputation and being the customer’s favorite place to eat. The company’s plan to win has five focus areas: place, people, price, product and promotion. Essentially, every technological innovation that the company sets out to accomplish is done with the strategic objective of winning customer confidence. To this end, McDonalds’ created the Store Technology Board. The board consists of franchisee and corporate representatives and is responsible for spearheading the development of technology in McDonalds’ restaurants. The board is also responsible for ensuring cost-effective and timely delivery of high quality technological solutions; providing timely communications with the company’s stakeholders and leveraging technological resources and talents with the company’s strategic objectives. Efforts by the Store Technology Board have enabled the company to move rapidly forward with a clear mission to fulfill critical business requirements across its franchise restaurants (McDonald’s Canada, 2008). In 2001, the company began to modernize and standardize its technology by integrating back-office systems with existing point-of-sale systems in about 15, 000 restaurants in the United States. Currently, the company is investing in a common point-of-sale system for use by all franchises across the world. This will help McDonalds’ improve the productivity of restaurants and enhance customer experience. Moving to this new point-of-sale will create a common platform for the company’s businesses across the globe and hence better allow McDonalds leverage future technology in restaurants.  Conclusion In a number of ways, the use of information technology has had a remarkable impact on the McDonalds decision making process. Through information technology, it is possible for each department to give current and accurate information about their individual performance. This has made it possible for the management to identify weak areas and to implement strategies for improving performance. Moreover, use of information technology has helped coordinate communication in the company, which has in turn helped prevent misunderstanding that can cause huge problems in the company’s business process and transactions. McDonalds’s use of information technology was partly in response to the problem of problems in marketing, human resource development and quality control and standardization of business practices. Accordingly, the company developed an innovative information management system that has helped maintain an efficient and consistent culture of information flow and sharing. With the continuous implementation of information technology, the company’s business performance has been improved to a great deal (Boyer & Rohit, 2009). This includes ability to constantly monitor inventory systems and documents. Information technology has also improved the services offered by McDonalds by ensuring that the company’s store systems in all branches are up and running all the time, making the company maintain its lead in the industry. References  Boyer, K and Rohit, V 2009, Operations and Supply Chain Management for the 21st Century, Boston, Cengage Learning. McDonald’s Canada Says “I’m Lovin’ It” to Juniper’s Network Security Solutions, Juniper, viewed 11 May 2012 from,  McDonald’s Corporation 2006, Edgar Online, viewed 11th May 2012,  McDonald’s Intranet Redesign 2006, Flair Interactive, viewed 11th March 2012,  McGee, M K. (2003), McDonald’s Adds To IT Menu, InformationWeek (23, June), viewed 11th May 2012,   Post, G and Anderson, D 2005, Management Information Systems, New York, McGraw-Hill/Irwin.   Read More