Strategic Information Management in McDonalds

This assignment delves into the application of strategic information management within the context of McDonalds. Students are tasked with analyzing how McDonalds aligns its information systems (IS/IT) with its overall business strategy. Key areas of focus include understanding the role of data in decision-making, exploring the impact of IS/IT on operational efficiency and customer engagement, and evaluating the effectiveness of McDonalds' strategic information management practices.

Running head: MCDONALDS 0
Strategic Information System

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Table of Contents
Introduction................................................................................................................................2
Analysis of McDonald’s Structure, Products, and Services......................................................3
McDonald’s Operations and Functionalities..............................................................................4
Requirement of Information System Strategy in McDonald's...................................................5
Information System Strategy Challenges...................................................................................6
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
Due to digitalisation, modern corporations are facing fierce competition, and they implement
strategic policies to gain competitive advantage in order to sustain their future growth. The
management of companies uses strategic policies to improve their operations’ efficiency in
order to increase their profitability. The role of strategic information system is growing
between modern firms, and they use it to improve the efficiency of their business activities.
This report will focus on analysing the information system of ‘McDonald’s’ to understand its
influence on business operations. Information system enables different departments of an
enterprise to share data with each other which assist in improving the decision-making
process.
Most of the leading firms strategically implement Information System to gain and maintain a
competitive advantage in the industry. McDonald's is an American fast food chain which was
founded in 1955; the company offers its services worldwide through more than 35 thousand
locations. This report will analyse McDonald’s structure, products, and services to evaluate
its operations and functionalities. The report will create an information system strategy for
McDonald's after analysing gaps in its business structure. Further, the challenges which occur
during implementation of information system strategy will be discussed, and various
recommendations will be provided to address such issues.

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Analysis of McDonald’s Structure, Products, and Services
McDonald's was founded in 1955 as an American fast food chain restaurant; the head office
of the firm is situated in Oak Brook, Illinois, United States. The company operates in ‘fast
food restaurant’ industry, and it offers its services worldwide. McDonald's is known for
offering high-quality food products at reasonable prices; the firm maintains a similar feel
throughout its restaurants worldwide. The enterprise is one of the world’s largest fast-food
restaurant chains with operations situated in more than 35 thousand location. The corporation
generated revenue of US$24.622 billion in 2016 financial year. The company has more than
375,000 employees spread throughout its restaurants globally; in Australia, the firm has
employed more than 90 thousand workers, and it is one of the largest employers in the
country (McDonald's, 2017). The products offer by McDonald's include hamburgers,
chicken, soft drinks, desserts, coffee, milkshake, French fries, salads and many others.
The corporation provides family friendly services in its restaurants, and it maintains
similarity throughout its restaurants worldwide. The similarity in restaurants is appreciated by
the customers since it is easier for them to book their orders. The primary competitors of the
enterprise include Subway, Burger King, KFC, Starbucks and Yum Brands. McDonald's has
gained a competitive advantage due to its effective supply chain and positive relationship
with suppliers. The company has successfully franchised its business, and it allows small or
medium businesses to open their own McDonald’s restaurants. According to Hitt, Ireland,
and Hoskisson (2014), McDonald's serves around 1 percent of the world’s population each
day which is more than 68 million people. The company fulfils its corporate social
responsibilities while performing its business functions by maintaining diversity in
employees and uplifting local communities’ development.

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McDonald’s Operations and Functionalities
McDonald's is known for incorporating technological advancements into its operations in
order to improve customers’ experience; the firm use technology to improve the efficiency of
its supply chain functions. The enterprise has incorporated ‘Information system strategy’ into
its business structure which assists in improving company’s functionalities and transforming
its supply chain operations. As per Rashid et al. (2013), the corporation has introduced a
number of services which focus on improving its customers’ experience. For example, a large
number of McDonald’s restaurants provide ‘Drive-thru’ facility which allows its customers to
purchase their order directly from their cars. The company has introduced touchscreen self-
ordering machines ‘Kiosk’ in various locations of New York and Singapore which allow the
customer to customise their burger and individually select its ingredients manually. The gap
in this system is that company have to provide training to employees and customers in order
to teach them how to use the machine properly.
Sinhmar (2014) provided that McDonald's use cloud computing technology which assists in
reducing company’s operating costs; the firm use ‘SaaS model’ to get software licenses
without any issue which enable them to focus on their core competencies. After moving to a
cloud-based platform, McDonald's has reported 50 percent improvement in performance of
products. The gap in this system is that corporation is not using it to improve its supply chain
operations. The new system can fix issues of wastage and reduce products manufacturing
costs which assist the company in providing better services. McDonald's use Transaction
Processing System (TPS) strategy to perform various business functions such as employee
record keeping, payroll, compensation and many others. The TPS collects transactions’ data
of the firm and provides relevant information, such as supplier name, address, quality and
quantity of items purchased and many others, which improve the efficiency of company’s
operations.

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McDonald's also use Management Information System (MIS) which allow them to share
relevant information at the right time which reduces the time of decision-making process.
Rijmenam (2016) stated that the firm also uses big data technology to become a more
information-centric company which allow them to take business decision according to
customer preferences. The company uses big data technology to select which restaurants
require ‘Drive-thru’ option based on customer predictive analytics. The gap in use of big data
technology is that corporation is not using it to share detailed reports with its line managers.
New information system strategy can enable company to provide drillable reports to its line
managers that can assist them during the decision-making process.
Requirement of Information System Strategy in McDonald's
Information System (IS) strategy is used by modern corporations to improve the efficiency of
their operations and gain a competitive advantage over competitors; it focuses on aligning
information system along with firm’s business strategy. Laudon and Laudon (2016) stated
that the IS strategy analyses the data that is required in company’s strategic, operational and
tactical levels in order to achieve organisational objectives. Many enterprises transform their
IT infrastructure through IS strategy and reduce their operating expenses. The IS strategy
enables multinational companies to share data between different departments in order to
simplify their procedures. McDonald's uses cloud computing technology to improve its
customers’ experience and share data between different departments. The company can use
Information System strategy to improve its supply chain and many other business operations.
McDonald's can use Information System strategy to implement automated replenishment in
its supply chain that can assist them automatically book order when food supplies are low.
The firm operates in more than 35 thousand locations, and most of its franchisees buy
ingredients from local suppliers; a successful Information System can be implemented by the

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firm to connect franchisees with suppliers, and automatically book orders when the supplies
are short. Effective Information System strategy can enable McDonald's to assess its
customers’ demands and develop new products based on their requirements. McDonald's is
required to establish systematic monitoring and evaluation program to analyse its customers’
requirements and implement them into business strategies. Vivek, Beatty and Morgan (2012)
provided that the firm can also improve interaction between different restaurants and
management by improving its MIS strategy that will allow line managers and top-level
executives to share critical information with each other that assist in decision-making
process. The company can use information system strategy to transform its business strategy
as per rapidly changing business environment.
Information System Strategy Challenges
Modern firms implement information system strategy into their business in order to improve
the efficiency of their operations, but, they face various issues while aligning it with business
strategy. The companies face various issues while implementing information system strategy
into their business structure because of rapidly changing marking conditions. McDonald's
deals with a larger number of franchisees who are situated in different countries and
implementing an information strategy that covers each of them is difficult for the
organisation. The company has to evaluate its business environment and culture before
implementing an information system strategy to ensure that employees are ready for new
technological advancements. Galliers and Leidner (2014) stated that many employees might
oppose new IS strategy by providing that it is useless and ineffective. The corporation has to
ensure that employees are comfortable with new IS technologies, and they are able to use
them correctly while performing daily operations.

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Similarly, the customers might also get frustrated by the implementation of new technology
such as the use of touchscreen system to place orders. Continuous frustration and opposition
are signs that company has failed to implement an effectively align its business strategy with
the information system. As per Issa-Salwe, Ahmed, Aloufi and Kabir (2010), the complexity
of information system strategy can decrease company’s sales and increase employees’
retention rates. McDonald's operates in more than 35 thousand locations globally and it can
difficult for management to supervise each division. Lack of management supervision can
increase the problem for McDonald's since it might be difficult for them to implement
Information System strategy for each restaurant. Lack of effective relationship between
employees and management can create various problems in the implementation of IS
strategy. Due to a large number of locations, McDonald's also face difficulty in collecting and
assessing MIS data from different restaurants.
By monitoring and assessing MIS data, the corporation can provide drillable reports to its line
managers that assist them in taking appropriate business decisions. The firm collects a larger
number of customer data from its global operations, and it might face difficulty in assessing
such data properly. McDonald's might face issues relating to employee engagement because
it deals with more than 375,000 employees; it is difficult for a corporation to train each
worker about information systems and it also increases its operating costs. According to
Poister (2010), Information system strategy works properly if the employees are able to
utilise it while performing their day-to-day business activities properly. McDonald's also face
difficulty in identifying errors in information systems because in some cases, staff did not
have the technical knowledge to fix the issue which disrupts the entire IS strategy of the firm.

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Recommendations
Following policies can be implemented by McDonald's in order to address various challenges
related to implementing Information System strategy into its operations.
 The company should hire IT experts to provide appropriate training to its employees
about new information systems which can assist in reducing their opposition towards
new technology. Trained employees can properly use new information system in the
business which assists in increasing company’s efficiency. It can also reduce the
frustration of customers since employees can teach them about new technology.
 The corporation should increase top-level management commitment towards the
implementation of Information System strategy by providing them more
responsibilities and increasing their engagement with franchisees and employees. An
effective relationship between IT specialists, employees and management can assist in
the proper implementation of information system strategy in the firm which provides
them a competitive advantage.
 McDonald's should establish a dedicated, systematic monitoring and evaluation
program which assess the data collected by the enterprise from its global operations
and use it to formulate business strategies. The company should create detailed
reports by using customer insight data that can be used by line manager while taking
business decisions.

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Conclusion
From the above observations, it can be concluded that modern corporation uses Information
System strategy to improve the efficiency of their operations which provide them a
competitive advantage. Organisations can align their business strategy along with information
system to improve the efficiency of supply chain and operations. McDonald's use various
information system strategies to effectively operate its business operations such as cloud
computing, MIS, big data, TPS, and others. The company can improve its supply chain
operations and increase its customers’ experience by implementing a successful Information
System strategy. The firm might face various difficulties while implementing IS strategy such
as employees opposition, high expenses, lack of management commitment, lack of technical
expertise, non-detection of errors, and others. In order to address these issues, the enterprise
can implement various policies such as training its employees, hiring IT specialists,
establishing effective relationships, increasing top-level managers responsibilities,
establishing systematic monitoring system and others. McDonald's can sustain its future
growth by effectively implementing IS strategy in its business operations.

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References
Galliers, R.D. and Leidner, D.E. eds. (2014) Strategic information management: challenges
and strategies in managing information systems. Abingdon: Routledge.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E. (2014) Strategic Management: Concepts:
Competitiveness and Globalization. 11th ed. Ohio: South-Western College Pub, pp. 3-5.
Issa-Salwe, A., Ahmed, M., Aloufi, K. and Kabir, M. (2010) Strategic information systems
alignment: Alignment of IS/IT with business strategy. [PDF] JIPS, 6(1), pp.121-128.
Available at https://www.researchgate.net/profile/Abdisalam_Issa-salwe2/publication/
220635737_Strategic_Information_Systems_Alignment_Alignment_of_ISIT_with_Business
_Strategy/links/09e41513d69426f770000000.pdf [Accessed 12th January 2018].
Laudon, K.C. and Laudon, J.P. (2016) Management information system. Delhi: Pearson
Education India.
McDonalds. (2017) Macca’s People. [Online] McDonalds. Available at:
https://mcdonalds.com.au/about-maccas/people [Accessed 12th January 2018].
Poister, T.H. (2010) The future of strategic planning in the public sector: Linking strategic
management and performance. [Online] Public Administration Review, 70(s1). Available at
http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6210.2010.02284.x/full [Accessed 12th
January 2018].
Rashid, A., Zamzuri, M., Ahmad Izzuddin, T., Abas, N., Hasim, N., Abd Azis, F., Aras, M.
and Shahrieel, M. (2013) Control of Automatic Food Drive-Through System using
Programmable Logic Controller (PLC). International Journal of u-and e-Service, Science and
Technology, 6(4), pp.41-50.

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Rijmenam, M.V. (2016) From Big Data to Big Mac; how McDonalds leverages Big Data.
[Online] Datafloq. Available at https://datafloq.com/read/from-big-data-to-big-mac-how-
mcdonalds-leverages-b/403 [Accessed 12th January 2018].
Sinhmar, S. (2014) Consequence of information technology in business. International
Journal of Education and Management Studies, 4(2), p.156.
Vivek, S.D., Beatty, S.E. and Morgan, R.M. (2012) Customer engagement: Exploring
customer relationships beyond purchase. [Online] Journal of Marketing Theory and
Practice, 20(2), pp.122-146. Available at
http://www.tandfonline.com/doi/abs/10.2753/MTP1069-6679200201 [Accessed 12th January
2018].