This report explores the successful integration of Enterprise Resource Planning (ERP) and business analytics at McDonald’s, the world’s largest fast-food restaurant chain. Through the fusion of ERP technology and advanced business analytics, McDonald’s has harnessed the power of data to drive growth and enhance customer experiences.
About McDonald’s:
As a global fast-food giant, McDonald’s serves approximately 70 million customers daily across 119 countries through over 36,000 outlets. McDonald’s unique business model encompasses affiliates, franchisees, and corporate-operated restaurants. With annual revenues of $27.5 billion in 2012, McDonald’s boasts the second-largest global workforce after Walmart. The company’s diverse business models across various countries contribute to its unique and complex operational structure.
Integration of ERP and Business Analytics and Intelligence:
McDonald’s initially relied on an ERP system to manage its global business processes. However, the integration of ERP with business analytics and business intelligence solutions marked a transformative shift in their data utilization. This integration empowered McDonald’s to glean valuable insights from data originating from a multitude of sources, including transactions, social media, online platforms, and various databases.
The company leveraged these insights to make data-driven decisions, ranging from optimizing menu offerings to orchestrating billion-dollar marketing campaigns. The implementation also involved the development of simulation models for restaurant traffic management, using 3D simulations and video analytics. This modeling aimed to enhance efficiency and customer experiences. Notably, the integration extended to McDonald’s smartphone applications, enhancing features like nutrition information and store locators.
Issues Faced:
The complexities of McDonald’s global business process, which includes diverse business models such as franchisees, affiliates, and corporate-managed restaurants, posed a unique challenge. The need for a cohesive global business intelligence strategy was imperative. Initial implementation hurdles included performance issues, particularly concerning 24/7 access. Data quality issues within the Oracle E-business suite were also exposed during the project.
While McDonald’s emphasized adherence to industry best practices and stringent quality standards, the project team encountered and resolved issues related to data quality and best practices.
Benefits:
The final implementation of the integrated ERP and business intelligence environment delivered multiple benefits to McDonald’s:
Validation of data conversion within the business process.
Identification and resolution of data quality issues in the existing Oracle E-business suite.
Improved data quality, system performance, and scalability.
Adoption of industry best practices.
Enhanced user adoption rates, ensuring 24/7 availability.
A scalable and efficient solution.
A 24/7 global business intelligence strategy.
A customizable 24/7 customer satisfaction strategy.
Efficient ETL (Extract, Transform, Load) processes.
A proof-of-concept for financial analytics supporting the company’s global business processes.
Conclusion:
The integration of ERP and business analytics has propelled McDonald’s toward rapid growth. By leveraging a unique, scalable, and robust business analytics solution, McDonald’s has successfully harnessed data-driven insights to enhance its operations, customer experiences, and decision-making processes. This case study underscores the pivotal role of data integration in achieving growth and excellence in a global business landscape.
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TITLE PAGE
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Table of Contents
Introduction ..................................................................................................................................... 3
About McDonal’s............................................................................................................................ 3
Integration of ERP and Business Analytics and Intelligence ......................................................... 4
Issues Faced .................................................................................................................................... 5
Benefits ........................................................................................................................................... 6
Conclusion ...................................................................................................................................... 8
References ...................................................................................... Error! Bookmark not defined.
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Introduction
The aim of this report is to present information on how an integration of ERP or Enterprise
Resource Planning solution and business analytics have helped McDonald's to use their business
data for better analysis and to increase the growth of the business.
About McDonald’s
McDonald’s is the largest global food chain of fast food restaurants that started from the US.
Their main product is hamburger. Currently, McDonald's is service around 70 million customers
daily. Their business is spanned over more than 36 thousand outlets in more than 119 countries.
The business follows a diverse model. It is operated by either an affiliate, a franchisee or the
corporation (Rijmenam, 2013). The revenue comes from the fees, royalties, rent, and other fees
collected from the franchisees. It also collects revenue from the restaurants operated by the
company itself. The annual revenue of the company was $27.5 billion in the year of 2012. The
profit was around 5.5 billion in 2012. After the Walmart, McDonald’s is the company having the
largest chain of business and the number of people working for them (Rijmenam, 2013).
The business model of McDonald's is a bit different than the business models of other fast food
chain businesses. It operates on a franchise model and also rents its properties. Rest is calculated
based on the sales. In different countries, it also runs with collaboration with government and
corporations (Rijmenam, 2013). For example, the business model used in the US is different than
the business model used in the UK and so on. So, there is a lot of diversity and differences in the
global business chain.
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The main products that are sold by the business are, different types fast foods including different
types of burgers, french fries, chicken, meals, breakfast buckets, soft drinks, desserts, milkshakes
and various kind of side dishes like wraps, salads, smoothies, fish, seasoned fries and fruits
(Rijmenam, 2013).
Integration of ERP and Business Analytics and Intelligence
The global business process of McDonald’s has different types of implementations of their
business models. The company used to have an ERP system for running and managing their
global business process. Later on, it integrated the ERP system with various business analytics
and business intelligence solutions. These integrations of the ERP and business intelligence
projects, helped the business to analyze the important business insights from the critical business
data coming from diverse sources like the business transactions, social media, online websites,
and databases from different business units and so on. The business has used the critical business
insights to tale decision on the core business processes like offering different menu combinations
to customers, taking decisions on their billion-dollar marketing and advertising campaigns and so
on (Booker, 2013).
Based on the integration, the company developed simulation models for their restaurants. It used
advanced computing technologies like 3D simulations and video analytics that helped it to
analyze the incoming and outgoing traffic to and from the restaurants. One of the main goals of
this integration and simulation model was the improvement of the efficiency of the business
process and the traffic flow in the restaurants. So, the primary focus of the integration was to
improve the customer experiences at the restaurants. The simulation model was applied to a few
restaurants for the testing purpose (Booker, 2013).
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It turned out, that the power of business data analytics and the integration of the same with the
ERP system help the simulated restaurants in faster decision making for selection of food for
customers, testing in new cooking processes, equipment or sales processes. A restaurant was
simulated as a single system. Thus, the business analytics were applied to optimize the
interconnected processes of the restaurant. A variety of data sources were used for the business
analytics. Some of the important data sources are, (Booker, 2013)
• Transactional data from the Point of Sales of the restaurants.
• Data from the global data warehouse of the company
• Data from the business intelligence platform
• Data from the information systems used for storing the data about the performance and
business processes of the individual restaurants.
• Data collected from primary and secondary market research, crew experiences, customer
experiences, marketing, and operations.
• Data from the supply chains
• Third party data sets for different demographics and so on.
• Third party data for store-level business analytics
The integration was also expanded to cover the smartphone applications of the company. It
works behind the features like nutrition information details and store locator available on the
app.
Issues Faced
McDonald’s is a giant global chain of fast food restaurant business that also operates other
brands of similar restaurants. Their own business process has lots of diversity in the business
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model and processes followed in different business units like a franchisee, affiliates and the
restaurants managed by the corporation itself. So, with the growing complexities of the global
business process, it was difficult to set goals for all restaurants and improving the sales at each of
the restaurants (KPI Partners, 2015).
The business needed a global business intelligence strategy for their global business chain.
During the implementation of the business analytics and the integration of the same with the
existing systems and ERP system, the consultancy team faced a number of issues. The initial
implementation was not successful. It failed to meet the requirements of the company's 24x7
global business intelligence strategy. The performance was a serious issue that has a great impact
on the implementation of the integrated BI platform, adoption by the targeted end users and the
availability of the platform for 24x7. The primary data source was Oracle E-business suite. The
primary data set had a number of serious issues with the data quality that was exposed during the
project (KPI Partners, 2015).
The company was interested in ensuring that the business intelligence implementation project
gets completed by following the industry best practices. It was also very strict about the quality.
So, during the project, issues related to quality and best practices were present but those were
resolved.
Benefits
The final implementation of the business intelligence environment on the ERP system of the
McDonald's global business process was started from the assessment of the initial
implementation of BI at the finance department. Then, based on the findings a clear roadmap
was prepared for the project. It helped McDonald's to get their unique solution for the BI. The
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final solution was a simulated ERP and BI platform deployed over Oracle EBS or Oracle E-
business suite, Oracle BIEE or Oracle Business Intelligence Enterprise Edition and Oracle BIA
or Oracle Business Intelligence Applications. The benefits achieved from the integration of the
ERP and business intelligence platform are (KPI Partners, 2015),
• Utilization of the BI platform for validation of the data conversation of the business
process.
• It helped to expose the data quality issues in the instances of the existing OEBS.
• It helped to elevate the quality of the implementation of the OEBS suit.
• The implementation was done by following the best practices in the industry
• It helped to have a significant improvement of the data quality, performance of the
restaurants and scalability of the system. It covered the deficiencies in the initial
implementation that failed (KPI Partners, 2015).
• The company got a 24x7 global BI strategy for their business.
• The performance issues were resolved and that helped to improve the rate of user
adoption.
• It improves the availability of the platform for 24x7.
• It gave a 24x7 customer satisfaction strategy that is also easily customizable.
• The solution was scalable
• It gave an efficient solution for the ETL process
• It was a proof-of-concept for the financial analytics used for the global business process
of the company.
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Conclusion
In this report, there is a discussion on how McDonald’s integrated their existing ERP solution
with a unique, highly scalable and robust business analytics solution that helped their business to
grow rapidly.