INFORMATION TECHNOLOGY: MCDONALD’S
EXECUTIVE SUMMARY
Application of the information systems is essential for the organizations in the modern business environment. It signifies the methods which can improve the operational efficiencies of the business and at the same time assist in innovating new practices which may differentiate and create a competitive edge for the business. Application and effective use has been analyzed in this report using the example of McDonalds which is a leading player in the fast food industry. Innovating new methods helps the businesses in sustaining the competition from the competitors and proposing new methods which enhance customer satisfaction. The use of the information systems helps the managers in designing the strategies which align the workforce and motivate them to work for enhancing the satisfaction of the customers.
This report includes a discussion of the information systems used by McDonalds. An elaborate discussion provides the details of application of the information systems on the organization. The most frequently used information systems are the TPS and the MIS. Details of these are shown which explain the impact of appropriate application on the success of the organization. Evaluation of several of many information systems used by the organization helps in concluding the benefit and critique on the application of the models on McDonalds. This will create an understanding of increasing need of the organizations for applying the information systems. This enables the appropriate monitoring and implementation of processes which will enhance the operational efficiency of the organization. In this modern technological era the businesses require adapting new methods which create value of the organization for its customers. This reform in the business practice has eventually led in the development of the businesses. Study of all these facts prove that the organizations require applying new and innovative methods for enhancing the efficiency of the businesses.
INTRODUCTION
The modern organizations and the methods of doing businesses have evolved. Earlier the business functions focused highly on competition and technological advancements were not so common. With the passage of time and development of MIS and IT related systems resulted in revolutionizing the entire operational practices of the businesses. The emphasis of the businesses today is on enhancing the use of technology so that efficiency may improve. This provides competitive edge to the businesses and is considered as being sole key factor which differentiates the businesses. Higher the use of technology, higher will be the operational efficiency (Wade and Hulland, 107-142).
Management information systems are described as essential tools for the managers for organizing and decision making. An effective MIS process improves the communication and enhances the connectivity which makes accomplishment of goals easier. Earlier the managers emphasized on collaboration of the workforce together for improving its core business functions. This has promoted the use of internal knowledge management practices within the organizations. Several software’s and applications are designed by the organizations for this purpose. The first step for this process is the initiation of the computing processes and second is the development of the software’s for effectively promoting the businesses (Wade and Hulland, 107-142).
An analysis of application of the MIS systems and IT related technologies on the businesses will assist in understanding its significance. For this purpose application of MIS and IT related technology by McDonald’s will be assessed. McDonald’s, as a company, strives for professional excellence which it aims to acquire by providing the best quality and services in the industry. McDonald’s has defined the goals which are more ambitious than any other restaurants. The business takes pride in operating as a community partner and a model business for other restaurants around the world. The business seeks new ways for accomplishing their brand promises and this requires that the best level of qualities, services and values are delivered to the customers. With this practice the goals of promoting cleanliness which may enhance the value of the business for the customers may also be improved (McDonalds, a).
In this report a discussion of the MIS and IT related systems used by the organizations will be discussed. An elaborate detail of the business profile and the system functions which are used for enhancing the IT and MIS systems will also be discussed. The impact of the MIS systems and criticism of the modern practices will also be discussed for elaborating the businesses. Application of the hardware and software related tools will also be discussed which will show the development of the business practices. All these practices help in acquiring the competitive advantage for the business which improves the sustainability of the business in a competitive environment. The modern businesses require the application of latest technology for improving and enhancing their functionality. These tools are used so that the operational excellence can be acquired along with a competitive advantage which increases sustainability of the business. This also helps in accomplishing the future goals set by the organization.
McDonald’s has a huge history which goes back in time to show the development of the organization over the years. McDonald’s is a huge chain of restaurants operating globally. More than 32,000 stores located across the globe shows the measures using which the company has expanded. The development of the business took place in the 20th century (McDonalds, a). Over the years the business has developed a prominent position in the industry. It has succeeded in doing so by acquiring a competitive edge and sustaining a prominent position in the industry with the application of new technology for managing the operations. The first restaurant was opened by the two brothers Richard and Maurice McDonald in 1940 (McDonalds, a). By 1948 the business practices were reformed and the full scale traditional menu presentation was cut down (McDonalds, a). This initiated better management of production and at the same time it also made managing the staff easier. Over the next five years the business developed excessively and this led to measures using which the business is still sustaining a prominent position in the industry. McDonald’s chain of stores kept on developing over the years and since then the business has continued to expand in more and more countries. Till 1971 the business has expanded in more than 117 countries. Over the years the business has developed and sustained the competitive edge (McDonalds, b). Travelling this distance was only possible through the application of effective information systems and applying the information technology in the most effective manner possible. The operational efficiency of the business is because of the application of innovative systems which will be discussed in the later portions of this report.
McDonald’s has managed to define the strategies which have aligned the workforce to the mission vision and values of the organization. As discussed below
Mission: The mission of McDonald’s is to become one of the best restaurants across the globe which is an epitome of interest for the customers. Besides this the business also strives in becoming one of the leaders amongst the competitors in the global food industry.
Vision: The vision is to provide the best levels of quality and services to the customers in a clean environment. Deliverance of these values is considered most important by the business for sustaining the competition and acquires maximum level of customer satisfaction.
Values: Q, S, C and V are the letters using which the value deliverance elements have been derived. This requires that maximum level of quality and services are provided to the customers. This is related to the value deliverance goals which have been set by the organization. Providing a clean environment to the customers enhances the values of the customers so that they can enjoy their meal and promote the values in such a way that the customers leave the place smiling.
Understanding all these will determine the application of the business in the industry. These are the basis of understanding the development which has been made by the organization over the years. The mission of the company is to become one of the favorite places for the customers. This can be done by implementing effective worldwide operations (McDonalds, c). This requires the business to align to a global strategy which will improve the customer experience. This requires that an extensive emphasis is given to the four P’s of marketing which are product, price, place and promotion of the business. This makes it necessary for the business to improve the operations and enhance the customer related experience.
The business values emphasize on maximizing the customer experience, commit to the employees, believe in the organizational systems and values, operate ethically, give back to the community and engage with CSR, increase the profitability of the businesses and pursue the measures which improve the businesses. According to the information presented in the annual report the global comparable sales growth of the business was estimated as 3.1% (McDonalds, 2). The net earnings per share growth were estimated as 5% and the average number of customers served every day was 69 million (McDonalds, 2). The unique taste and quality of the business along with the ingredients which were used are classified for the success of the business.
(Bloomberg)
The elaboration of the income statement for McDonald’s shows the details of revenue, net income and profit margin of the business for the ending quarters of 2012 and 2013. The detailed analysis of the business also shows the utilization of the franchise units located globally.
(Entrepreneur)
McDonald’s has an attractive story about its development and progress in the industry. This is related to the description of the products and services which the organization provides. This is linked to the operations of the business and the global perspectives which the organization has developed for dealing with the competition. McDonald’s over the year has acquired the position of a number one food retailer in the world and with the passage of time the business is successfully growing. Besides being a global leader in the fast food industry McDonald’s strives for achieving quality, innovation, products and sustainability. The business has its retailers located in more than 34,000 locations serving more than 69 million customers in more than 118 countries each day (McDonalds, d). Emphasis on different kinds of food products and service is made for enhancing the product quality and services of the business. This helps it in developing and meeting with the global requirements.
(McDonalds, 2)
In the chart shown above the financial position of McDonald’s can be analyzed. The operating income which has been generated by the business in the financial years 2010, 2011 & 2012 clearly shows the strength of operational success of the business. Similarly the compound annual total returns have also been shown which shows the prominent position the business has gained in the industry. This depicts the supremacy of the measures which the organization has taken over the years.
(McDonalds, 3)
The details of the operating margins, earning per share and dividends which have been paid by the organization from 2010 – 2012 have also been shown in the graphical representation above. The discussion in the later portion of this report about the application of the information systems shows its importance in the success of the business.
FUNCTIONS OF INFORMATION SYSTEMS AND ORGANIZATIONAL IMPLEMENTATION
Information systems within the organizations are independent components the use of which helps the organization in accomplishing its particular objectives. This includes assessing the inputs, processes and outputs using which the businesses perform their operations. The understanding assists in developing the gains associated to the resources which are vested for the operations of the business. The term processing is changing the inputs into outputs. The role of the information system is associated with people and enabling them for making the appropriate use of the technology. All forms of information systems are used for certain purposes. This is the philosophy on the basis of which the communication gap between the workforces has been reduced. The information systems like TPS, MIS and Executive Information Systems etc. are used by the organizations (Delone, 9-30).
McDonald’s is a well renowned fast food chain which has utilized the applicative systems of IT for enhancing their overall business performances. Application of different forms of information systems is used for improving the day to day functionality of the businesses. The Transaction Processing Systems (TPS) is used when the hamburgers are ordered to the suppliers. The system records the names, address and quantity ordered in its system. Recording all this information helps in managing the inventory efficiently and secures the proof for the transactions which took place. Similarly the application of the MIS system helps in producing the daily record of employees work schedule and compares the budget and efficiency of the employees. This will help the manager in designing the plans for the future and control the operational success of the business accordingly (McDonalds, f).
This shows different methods which can be used for categorizing the business functions. It also helps in understanding the effectiveness which the businesses can acquire from the use of this business and at the same time calculate the impact of the information systems on the business. Application of MIS helps in measuring the success of the business. This improves the performance of the business and enables the management in proposing the incentives which may enhance the individual efficiency of the business. The application of the MIS and TPS system which are the most excessively applied systems used for acquiring the efficiency for the business will be discussed in this report. From amongst many systems applied by McDonald’s these two methods are used excessively. Elaboration the impact of these processes on the business will help in developing an understanding of the process. All the applied methods have the sole objectives of improving the business processes. Applying these systems appropriately enhances the business process and gives it the required competitive edge to sustain competition. Application of the information systems has become extremely significant for the businesses in the modern environment.
IMPACT OF MIS ON THE ORGANIZATION
The role and the performance of the organization towards its business process has enhanced due the excessive use of technology. McDonald’s only aims at enhancing the businesses. This aim is facilitated by the use of the information system. The sole aim of the business is maximizing the efficiency of the operations. This leads to future development and recognition of the entire organization (McDonalds, e).
The impact of the application of the MIS is related to the management of the system. If the application of the MIS on the system is efficient then its marketing, finance and production operations automatically improves. This shows that McDonald’s has acquired its efficiency through application. The MIS system has made tracking and monitoring of the operations easy. The system defines a relationship between the managers and the workforce. This collaboration is used for delivering the goals which the organization wishes to accomplish. The progress and the shortfalls disrupt the activity of the targets. The manager collaborates as they are involved about the problems and they require that the problem is appropriately dealt with. The managers usually do this for forecasting the future prospects and determining the long term goals which are required to be accomplished. An information system which is appropriately equipped and a database are created for all the people which are part of the organization. The significant use of the information system is structuring the information in such a way that it can be used straight away and save the valuable time of the workforce. This application by McDonald’s brings it one step closer towards its goals.
Another major impact of MIS system on McDonald’s is that a strong applicative of understanding the business takes place. MIS is a dictionary of database in which all the relevant information is available. All these applications bring clarity and develop an understanding of the organizational goals and objectives. The MIS system designs the operational system of the business so that they are stream lined towards attaining the goals of the organizations. This increases the administration of the business and makes everyone follow the procedures which have been set. All these processes integrate professionalism within the system. The goals of the MIS system implemented at McDonald’s are designed to improve the workforce efficiency of the business. All the logistics and other functional operations are managed using the MIS system. An appropriately designed system is managed in such a way that the managers can connect the employees and notice the efficiency of their performances. Information pool of the workforce enables the managers in implementing and experimenting new methods which can ensure achieving of the goals. The ultimate objective of the MIS system is to motivate the managers and align the workforce towards the organizational goals and objectives.
MIS is used by the organizations for providing the information needed for managing the information directly. The primary resources available with the organizations for managing their entire systems are technology, information and the people (Alavi and Leidner, 107-136). As discussed above McDonald’s relies too much on its people. This is because they are the ambassadors of the business and while operating in such businesses the workforce plays a very important and prominent role for the success of the business. This system helps in managing the day to day operations and it supports the routine decision making which is part of the functional areas of the business. In McDonald’s the MIS system is applied so that the periodic assessment reports can be generated. This assesses the progress of the employees and helps the management in assessing their efficiency and proposing the level of targets which are been met by the employees. Using this system the operational budget of the organization is also assessed. The use of MIS system is the basis of profitability. The information which is available is crucial for the managers and staff for understanding the business performance and establishes future goals and targets for the organization.
APPLICATION AND BRIEF DISCUSSION OF ALL THE MIS SYSTEMS ADOPTED BY MCDONALD’S
The information system is very useful for the business. The aim is to design a structure where all the aspects of the business can be studied and appropriate policies can be designed for dealing with those processes. There are a number of processes which are used and implemented for enhancing the overall efficiency of the business. The details of the TPS and MIS systems have been elaborately discussed above. Naming a few of the other systems which are implemented and are used for supporting the business operations are as following (McDonalds, f):
Decision Support Systems (DSS): It is a system designed for making quality decisions based on the data available. The DSS are computer applications with the effect of human component on the application. This enables the management of large amounts of data and pick between the choices available for making the right decision. This application is designed for assisting with the making of non-routine decisions. The implementation of this data is done as the individuals are provided with the small wireless services so that the information about the customer usage can be analyzed and sales level and decision implementation can be managed within the restaurants.
“Made for you” system: This is the system in which modern technology is used for managing the systems. This system is very effective and it assists with the operations. Using this system when the order is placed the picture appears immediately on the monitors of the kitchen staff along with an indicative tone. This alerts the kitchen staff for starting the business process (McDonalds, f).
POS system: This system is also referred to as the scale of point system. McDonald’s is a busy restaurant and for this purpose the POS system is used. This system prioritizes the experience of the customers by offering their orders promptly. This system is applied for speeding up the business process. With the use of this system massive data can be tracked in seconds. Using this system the data of the order placed is transmitted instantly. The enables the cashier for assessing the payments which he has to collect. The kitchen managers also instantly become aware of the orders which are coming. They entire process makes the individuals aware of the time the customer has been waiting. This is a very effective process for enhancing the overall efficiency of the business (McDonalds, f).
Hyperactive Bob system: This system was implemented so that the employees are prepared when they are about to become busy. This system is designed in such a way that the computer and the roof cameras is used for monitoring the traffic and assess the parking tickets which are offered to the customers in the parking lot or in the drive thru. This system prepares the workforce of the customers which are about to come or if the flow of the customers is also high (McDonalds, f).
All these systems applied by the organization show the optimum use of information technology. The sole aim and purpose of the application of the information system is to enhance the productivity and efficiency of the people so that customer satisfaction can be achieved. The elaborate details of benefits of application of the information systems are shown below.
BENEFITS OF INFORMATION SYSTEMS ON THE PERFORMANCE OF THE BUSINESS
Use of the information system benefits McDonald’s in many ways. This provides the organization with an assessment of its strengths and weaknesses. This enables them in improving the business processes and operations. The use of the information system at the same time is essential for enhancing the productivity of the organizations. The time and effort vested by the workforce is reduced by the use of this practice. According to the use and application of the system the POS system is chosen as the best applicative form of the information systems. This assessment has been developed from an understanding that McDonald’s is considered as one of the best restaurants amongst other at the places it operates. The benefits associated with the use of these systems are that the management becomes efficient and timely production can be done. This increases the sales and reduces the chances of error. This also makes the transaction process efficient. Using this system efficiently attracts the customers and makes it easier for the management in providing a memorable experience to the customers in the easiest possible manner.
All these benefits associated with the use of the information systems show the role of advancements in information technology. This shows that the management can attain the set targets and they can define the goals which the organization wishes to accomplish to the employees. McDonald’s operates in the fast food industry. This is a place where efficiency is the key for acquiring maximum customer satisfaction. This requires the application of the processes for the efficient management. Application of all the information systems which have been discussed earlier shows adopting new technology for improving the businesses. For acquiring the competitive edge it is essential that the businesses utilize all the resources and keep introducing new innovation to the systems for sustaining the excessive competition exercised by the competitors.
A DISCUSSION OF HOW THE SYSTEM IS USED TO GAIN COMPETITIVE ADVANTAGE
The application and initiation of the new information systems are essential for the organizations as it is a key for acquiring the competitive edge. The competitive edge is acquired by the business when they acquire the ability of performing better than other players of the same industry. This allows the firms to provide a better understanding of the customer needs which allows them to attain higher level of satisfaction (Gunasekaran and Ngai, 269-295). The fast food businesses require being strategically aligned and proposing the methods which ensures providing a competitive edge.
The firms obtain a competitive edge by creating values and forming strategies which improve the operational management better than that of the competitors. The businesses constantly compete within the same industry for managing the edge and retaining the customers of the business. This requires innovation and advancements in the systems. In the modern age the businesses acquire this with the appropriate use of information technology. The advancements in the practices and efficiently fulfilling the needs of the customers help in sustaining competition. Competitive edge is also essential as it provides customer loyalty. All the resources which are available with the organization play a key role in managing and sustaining the acquired competitive advantage.
McDonald’s has acquired its competitive edge through the application of information systems and advancing in the application of effective information technology systems. With the effective application of these processes the business has succeeded in enhancing its performance. Superior performance and understanding what the customers require is the most essential measure for enhancing the success of the business. This gives the organization the ability to stay ahead and propose methods which are unique. A few of the factors which have been discussed above elaborate the importance of innovation for the success of the business. This ensures survival and prominently making a position in the industry which can sustain the excessive competition and ensure market leadership.
CRITICISM OF SYSTEMS USED BY MCDONALD'S
Application of IT and the MIS systems within the organizations aim at enhancing the overall performance of the organization. All these are done by managing the knowledge of the workforce and using it for the benefits of the organization. The two most frequently used systems MIS and TPS within the systems of McDonald’s are destined for aligning the work force so that the managers can determine the strategies which enhance the operational efficiency of the workforce. The TPS is effective for monitoring the transactions which ensures that the systems are managed in an effective manner. Transparency is protected from the use of this system. The use of MIS is for the internal management process. This is for using the information and proposing the methods which can enhance their overall efficiency. Application of both these systems on McDonald’s cannot be criticized. Both the systems are necessary and are used excessively by the organizations so that their organizational goals and objectives can be accomplished.
Effective implementation of the processes require that incremental change is managed, small scale projects and the performance of the associated workforce is noted and face to face implementation of the project is ensured. Application of MIS system on McDonald’s cannot be criticized as it is the reason for the effectiveness of the management and operational success of the organization.
CONCLUSION
McDonald’s is amongst many organizations operating in the industry using the information system processes. This is essential for developing an understanding of the processes which the modern day businesses require. The use and implementation of the information systems along with information technology are essential for the businesses for sustaining in the present competitive environment. Organizations like McDonalds require continuously adapting to change for acquiring a competitive edge. The discussion presented in this report shows the significance of application of the information systems in the modern day organizations. Organizations like McDonalds operate in an environment where competitors constantly come up with new practices. This requires that strategic goals are formed in such a way that maximum benefit and advantage can be realized for the organizations. For this purpose the workforce of the organization is aligned to the organizational goals and objectives.
In this report a description of the applied information systems by McDonalds has been discussed. From amongst the applied methods the most effective ones have been presented effectively so that an understanding of the significance of the methods can be developed. Besides this the discussion presents the impact of the applied systems on the organizations. The system which is applied discusses the effectiveness of the system. The system is so effective that recommendations for improvement of the systems have not been given. The system is very effective and with the passage of time the existing system will not be reformed but new systems will be innovated for further advancement s in the effective management of the workforce.
This report includes the interviews taken from the existing employees and from the strategic management of the organization. Information from the annual reports and the internet has been used for the effective management. The systematic use of information helps in understanding the significance of the information systems. The development in the use of information technology within the organization improves the management and at the same time enhances the production efficiency of the organizations. All the usage of the information in this report is from the evidence of the existing structure of McDonalds. New propositions have not been presented because the organization is already on extreme heights of success. Besides this the business operates globally which requires changing the strategies due to the change in the culture. This report emphasizes on two main information systems which are used by the organization. These are the Transaction Processing Systems (TPS) and Management Information Systems (MIS). Both the systems are excessively used by McDonalds for enhancing the efficiency of the business and acquiring a competitive edge from the competitors. Besides this details of other systems which are also used by McDonalds are also used. The details of several of many information systems used by McDonalds have been elaborately discussed in this report. The appropriate application of the information systems ultimately leads to effective operational efficiency of effective management of the workforce of the organizations. All the aspects of the application of information systems have been appropriately discussed in this report. Benefits and criticism of the application of the information systems also signify the importance of its application.
WORKS CITED
Wade, Michael, and John Hulland. "Review: The resource-based view and information systems research: Review, extension, and suggestions for future research." MIS quarterly 28.1 (2004): 107-142.
Delone, William H. "The DeLone and McLean model of information systems success: a ten-year update." Journal of management information systems 19.4 (2003): 9-30.
Alavi, Maryam, and Dorothy E. Leidner. "Review: Knowledge management and knowledge management systems: Conceptual foundations and research issues." MIS quarterly (2001): 107-136.
Gunasekaran, Angappa, and Eric WT Ngai. "Information systems in supply chain integration and management." European Journal of Operational Research159.2 (2004): 269-295.
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