3.

IT OF MCDONALD’S
The information technology is linked to an optimized process of collecting, processing, storing,
and transmitting relevant and necessary information to support all management functions in any
organization. Mcdonald’s IS Department is led by Valerie Ashbaugh Senior Vice President Global
Engineering and Operations at McDonald's. She was responsible for the development of the company’s
IT systems as well as taking over the existing structure and providing adequate IT resources. This move
was made in order to allow Mcdonald’s to concentrate its efforts on its main area of expertise—the
making and selling products of Mcdonald’s. The iconic golden arches are recognized around the world
not only as a symbol of fast food, but also of technological progress. McDonald's, the world's largest
restaurant chain, was an early adopter of technology-driven innovation, from drive-thrus to self-service
kiosks. Mcdonald’s decided that a partnership with a world leading IT outsourcer would benefit the
company far more than designing and maintaining their own IT systems. Emirates Fast Food Co. which is
under of Seidor Middle East & North Africa, SAP's largest Platinum Partner, that provides end-to-end
SAP solutions, were chosen because of their substantial experience within the Fast food industry. The
needed to modernize operations with mobile and scalable cloud solutions and turned to channel partner
SEIDOR MENA to adopt SAP S/4 HANA Cloud ERP, SAP Analytics Cloud, and SAP SuccessFactors for talent
management through a unique offering which was built specifically for their needs. The implementation
of SAP S/4 HANA Public Cloud, an intelligent, integrated ERP system, has virtualized McDonald’s
infrastructure, reducing ownership and maintenance costs. By automating finance and sales processes,
McDonald’s using real-time data to organize suppliers, monitor supply sources, and manage inventory.
In addition to optimizing IT infrastructure costs, SAP Analytics Cloud enabled McDonald’s UAE to
communicate operational data to all restaurants, including kitchen serving times and relationships with
third party operators.
3.2 INFORMATION TECHNOLOGY PROBLEM
For its overall operations, the company had used a number of software applications, including
the Human Resources Management system (MENAMI) for all human resource functions such as
attendance records, leave management, payroll calculations, and end of service benefit management.
Performance Development System (PDS) for employee performance appraisal, accounting and finance
were on a different software platform, warehousing and inventory management were managed with a
warehouse management system (WMS), and the entire procurement process, order management
including vendor management, and logistics were managed with a separate software application. In
addition to the foregoing, the company managed SMS applications for restaurant operations with the
help of a principle. Ordering and management of mobile applications for customers who order with
mobile phones (Shiraj, 2021). The main technical and system problems that Mcdonald’s has
encountered have been with the accuracy of data. The new system requires the retrieval of old data
from the legacy systems that has to be normalized, screened and stored in a sensible data format within
the new systems data repository. The duplication of data was a major concern that Mcdonald’s had to
address. Point of Sale (POS) Systems is also issues related to the operation and integration of POS
systems, which are crucial for processing orders, managing inventory, and tracking sales. Mobile
Ordering and App issues with the increasing reliance on mobile apps for ordering and payment,
technical glitches or security concerns related to mobile platforms can pose challenges. Supply Chain
Management managing the technology infrastructure for an efficient supply chain, including inventory
management and supplier communication.

3.3 ERP (SAP) IMPLEMENTATION LIFE CYCLE

McDonald's ERP (Enterprise Resource Planning) implementation undergoes a structured life

cycle, beginning with the Initiation and Planning phase. Followed by design and configuration,
development and testing, deployment, monitoring and optimization, and lastly, ongoing
support and improvement.

1. Initiation and Planning: McDonald's ERP implementation begins with a detailed

initiation and planning phase. This involves a thorough analysis of the company's existing
processes, identifying pain points, and determining specific business requirements. Key
 stakeholders collaborate to set strategic objectives and align ERP goals with McDonald's
long-term business strategy. During this phase, a cross-functional project team is
formed, comprising individuals with expertise in different areas of the business. The
team works closely with ERP consultants to choose an appropriate ERP system that can
support McDonald's global operations, taking into account scalability, compatibility, and
functionality. A detailed project plan is developed, outlining timelines, resource
requirements, and risk mitigation strategies.

2. Design and Configuration: In the design and configuration phase, the chosen ERP system
is tailored to meet McDonald's unique business processes. This involves customizing the
software to align with the company's specific needs, ensuring a seamless fit with existing
workflows. System architecture is designed, data models are developed, and
configurations are applied to address McDonald's requirements. This phase also includes
the critical task of data migration from legacy systems to the new ERP environment.
McDonald's must ensure that historical data is accurately transferred to maintain
business continuity and support informed decision-making.

3. Development and Testing: The development and testing phase involves the creation and
validation of the ERP system. Customizations and configurations are implemented, and
integrations with other systems are tested to guarantee smooth data flow across various
business functions. McDonald's conducts extensive testing, including unit testing,
integration testing, and user acceptance testing, to identify and rectify any issues before
the system goes live. User training programs are developed and delivered to ensure that
employees are proficient in using the new ERP system, contributing to a successful
transition.

4. Deployment: The deployment phase marks the actual implementation of the ERP
system across McDonald's operations. This may occur in phases or all at once,
 depending on the company's implementation strategy. McDonald's carefully monitors
the system during the initial deployment to address any unforeseen issues promptly.
System performance, data accuracy, and user satisfaction are closely monitored during
this critical stage.

5. Monitoring and Optimization: Post-implementation, McDonald's shifts its focus to

monitoring the ERP system's performance and optimizing its functionality. Continuous
feedback from users is collected, and any necessary adjustments or enhancements are
made to improve system efficiency. Regular updates and patches are applied to keep the
ERP system aligned with technological advancements and security requirements.
McDonald's also ensures that the ERP system supports evolving business needs and
adapts to changes in the competitive landscape. 6. Ongoing Support and Improvement:
The final phase involves ongoing support and continuous improvement. McDonald's
establishes a support structure to address user queries, troubleshoot issues, and provide
assistance as needed. This phase emphasizes the long-term sustainability of the ERP
system, with a focus on maximizing its benefits. Regular reviews and audits help identify
opportunities for further optimization and enhancements, ensuring that McDonald's ERP
system remains a strategic tool for driving operational efficiency and supporting
informed decision-making across its global network of restaurants.

6. Ongoing Support and Improvement: The final phase involves ongoing support and
continuous improvement. McDonald's establishes a support structure to address user
queries, troubleshoot issues, and provide assistance as needed. This phase emphasizes
the long-term sustainability of the ERP system, with a focus on maximizing its benefits.
Regular reviews and audits help identify opportunities for further optimization and
enhancements, ensuring that McDonald's ERP system remains a strategic tool for driving
operational efficiency and supporting informed decision-making across its global
network of restaurants
3.4 CHALLENGES IN IMPLEMENTING ERP

Implementing an Enterprise Resource Planning (ERP) system can pose several challenges
for employees in any organization, including those in the fast-food industry like McDonald's.
While specific challenges can vary depending on the nature of the ERP system and the
organization's unique circumstances, some common challenges include:

1. Training and Learning Curve: Employees may face challenges in adapting to the new ERP
system, especially if it involves unfamiliar interfaces and processes. Comprehensive
training programs are essential to help employees understand and use the new system
effectively.

2. Resistance to Change: Employees may resist the changes introduced by the ERP system,
especially if it alters established workflows or job responsibilities. Overcoming resistance
to change requires effective change management strategies and communication.

3. Integration with Daily Operations: Integrating the ERP system into daily operations can
be challenging, particularly if there are disruptions to regular workflows during the
implementation phase. Balancing the need for continued productivity with the
requirements of the new system is crucial.

4. Data Accuracy and Quality: The success of an ERP system relies heavily on the accuracy
and quality of data input. If employees struggle with data entry or do not understand
the importance of maintaining accurate information, it can lead to issues downstream in
various business processes.

5. Communication and Collaboration: ERP systems often involve multiple departments and
functions. Effective communication and collaboration are essential to ensure that
different teams understand how the system impacts their work and how they need to
interact with the system to achieve overall business goals.
 6. Technical Issues and Downtime: Technical glitches or system downtime during the
implementation phase can affect employee productivity and cause frustration. It's
crucial to have a robust IT support system in place to address issues promptly.

7. Customization and Flexibility: Employees may find it challenging if the ERP system lacks
customization options or flexibility to accommodate specific business needs. A balance
between standardization and customization is vital to meet the organization's unique
requirements.

3.5 HOW THE EMPLYOEE ADOPT THE ERP

Companies often face challenges during ERP implementation, and the solutions they adopt can
vary based on their specific circumstances. However, I can provide some general strategies that
organizations, including McDonald's, might consider to address common ERP implementation
challenges:

Customization and Flexibility:

Solution: Collaborate closely with the ERP provider to customize the system to match
McDonald's unique processes and requirements. Ensure that the ERP solution is flexible enough
to adapt to the changing needs of the business.

Data Migration:

Solution: Develop a comprehensive data migration plan, including data cleaning and validation.
Conduct thorough testing to identify and rectify any issues during the migration process.

Employee Training:

Solution: Invest in extensive training programs for employees at all levels. Provide on-site
training, workshops, and access to educational resources to ensure that users are proficient in
using the new ERP system.

Resistance to Change:
Solution: Implement change management strategies, involving employees in the process,
communicating the benefits of the new system, and providing support during the transition.

Integration with Existing Systems:

Solution: Work closely with the ERP provider to ensure seamless integration with existing
systems. Establish effective protocols for data exchange between the ERP system and other
systems in use.

Cost Management:

Solution: Conduct a thorough cost-benefit analysis before implementation. Budget not only for
the initial implementation but also for ongoing maintenance, updates, and support.

Vendor Selection:

Solution: Choose an ERP vendor with experience in the food and beverage industry and a
successful track record of implementations. Conduct thorough evaluations and reference checks
during the vendor selection process.

Scalability:

Solution: Select an ERP system that is scalable to accommodate future growth and changing
business requirements. This ensures that the ERP system remains effective in the long term.

Regulatory Compliance:

Solution: Ensure that the ERP system is designed to help the company comply with regulatory
requirements in various countries. Stay informed about changes in regulations and update the
ERP system accordingly.

Continuous Improvement:

Solution: Treat ERP implementation as an ongoing process. Regularly assess the system's
performance, gather feedback from users, and initiate continuous improvement initiatives to
optimize the ERP system over time.
3.6 ADVANTAGE AND DISADVANTAGE OF ERP

Advantages of ERP

I. OPERATION
 Cost Reduction
 Labor cost (headcount) reduction
 Inventory cost reduction
 Administrative cost reduction (e.g. printing, office supplies, travel)
 Cycle time reduction: faster project delivery
 Cycle time reduction in customer support activities
 Cycle time reduction in employee support activities
 Cycle time reduction in supplier support activities
 Cycle time reduction in support activities with other external partners or stakeholders
 Productivity improvement
 Quality improvement
 Error reduction
 Duplicates reduction
 Accuracy or reliability rate improvement
 Improve customer services and retention
 Ease of customer data access and inquiries
 Improved ability to retain customers
 Reduce business risks
 Better risk forecasting
 Improved response and responsiveness to risk occurrence

II. MANAGERIAL
 Better resource management
 Better asset management
 Better inventory management
 Better production management for optimized supply chain and production schedules.
 Better workforce management
  Few physical resources/better logistics
 Improved planning and decision making
 Improved strategic planning and decisions
 Improved operational decisions
 Improved customer decisions
 Better performance measurement and control
 Improved financial management
 Improved financial budgeting and analysis
 Better management of financial assets and liabilities
 Centralized and real-time financial reporting and performance evaluation

III. STRATEGIC
 Improve alignment of strategies and operations
 Support business growth
 Support business alliance
 Consolidate newly acquired companies into standard business practice
 Collaborate with external parties for joint projects
 Build business innovations
 Enable new market strategy
 Build new process chain
 Create new business
 Build cost leadership
 Achieve economies of scale
 Generate or enhance product differentiation
 Build external linkage (with customers, suppliers, contractors, collaborators, etc.)
 Enable worldwide expansion and operations
 Enable e-Business

IV. IT INFRASTRUCTURE
 Increased business flexibility
 Reduce or optimize IT spending
 Increase IT in
 V. ORGANIZATIONAL
 Support organizational changes and corporate governance
 Facilitate business learning and broaden employees’ skills
 Empowerment
 Changed culture with common visions
 Changed employee behavior with shifted focus
 Better employee morale and satisfaction with improved retention of top performers

Disadvantages of ERP

I. DIRECT COST
 Software purchase or licensing
 ERP solutions
 Database management system
 System software
 Security software
 Additionalapplications

 Hardware acquisition or upgrade

 Servers & database machines
 PCs, workstations, printers, scanners, and other computer peripherals.
 Network equipment
 Installation and configuration of hardware
 Otherfacilities

 Professional services by external consultants

 Customization
 Data conversion
 Installation and configuration
 System integration
 Testing and troubleshooting
  Other technical support

 Internal staffing
 Additional permanent hiring
 Additional temporary hiring
 Staff turnover

 Instruction and training

 Maintenance and mandatory upgrades
 Administrative and miscellaneous costs
 Overheads
 Travel
 Contingency

II. INDIRECT COST

 Disruption to ongoing projects (strains on resources, additional change orders, delays, etc.)
 Temporary loss in productivity
 Temporary decline in quality of work
 Business process reengineering
 Organizational restructuring
 Shift of management focus and dedication
 Use of management and employee time
 Job role redesign & reassignment
 Decline in employee engagement and morale
 Culture changes
 Conflicts and frictions among organizational units
 Transition from legacy system to the ERP system
Impact on relationship with key stakeholders