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McDonald's offers customers a bigger taste of

technology
11 Feb 2004, Daniel Thomas, Computing

http://www.computing.co.uk/ctg/analysis/1848922/mcdonalds-offers-customers-bigger-taste-technology

Technology is playing a vital role in McDonald's plans to lure more customers into its 1,230 UK fast
food restaurants - as well as driving cost savings and operational efficiency across the organisation.

McSalads are not the only new things on the menu, as the company is also introducing wireless
networking, PlayStation 2 video games consoles, internet terminals, flat screen televisions and music
videos into its revamped stores.

'It's about offering customers more choice and making the restaurants more relevant,' Steve Tiley,
McDonald's head of management information systems told Computing.

'No one single thing will attract customers, but by offering healthier food options, new d‚cor,
entertainment and internet access, people will choose McDonald's over other restaurants,' he says.

The company is introducing BT Openzone WiFi hotspots into 561 drive-thru stores (Computing, 14
January 2003), fixed-line internet terminals from Datavision, PlayStations and specially adapted web-
based games for children.

Tiley says the WiFi roll out is running ahead of schedule, with 350 stores already available for passing
business people.

'Our strategy this year is to attract business users. We've found that drive-thru and service station
restaurants are extremely popular with our business customers on the move. The hotspots will allow
businessmen to check email, access the internet and download presentations while having something to
eat and drink,' he says.

In addition to attracting customers, McDonald's is hoping to cash in by forming revenue sharing

partnerships and advertising deals with its internet service providers and equipment providers.

But Tiley says the main focus is to improve the customer experience. The company is also considering
the viability of offering free internet access with food purchases.

Along with most other UK retailers, McDonald's is evaluating chip-and-PIN payment card readers for its
UK branch network.

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The restaurant has rolled out readers in all its Scottish branches, though a project with technology
provider Ingenico.

Results have been encouraging, with nine per cent of customers using payment cards since its
introduction nine months ago, says Tiley.

'The key is to make paying by card as quick as paying by cash,' he says.

'Customers want the same quick experience as if they were going through a drive-thru.'

Using ADSL broadband connections to authorise transactions, McDonald's has been able to reduce the
time to process card payments from thirty seconds to just four.

But it's not just in the restaurants that new IT is expected to help the company's business.

'This year is about consolidating existing IT systems and introducing new ones to bring cost savings,'
says Tiley.

McDonald's is using wireless technology to make savings in its IT infrastructure and increase
productivity.

'Wireless will have a big impact on how we work this year. It's so much easier than creating new
environments for the laptop, it allows us to integrate devices and business processes and make a real
difference,' he says.

Tiley is replacing the laptops and mobile phones of 225 managers, business analysts and other mobile
workers with XDA smartphones, to make better use of its restaurant and office-based wireless networks.

The company estimates that the change will bring hardware savings of £600 per employee, plus a
reduction in telephone bills through always-on access to GPRS and WiFi.

This initiative builds on McDonald's wireless office environment, introduced last year, which uses
Symbol access points and 128-bit security encryption to improve hot-desking facilities for workers
moving from site to site.

'By wireless enabling every office and meeting room we have slashed support costs, as we don't have to
spend 20 minutes reconfiguring laptops to the office environment,' says Tiley.

'When a person walks into an office the device is automatically assigned to a local printer.'

But Tiley says the high cost of digital phones will prevent McDonald's from using Voice-over-IP over
its virtual private network, installed by IT consultancy Jade.

Tiley believes McDonald's introduction of queue-busting wireless ordering devices (Computing, 17 July
2003) into 500 restaurants is also paying dividends.

The devices use business intelligence software from Business Objects to gather sales information and
marketing data, which is then transferred to an Oracle database for analysis.

'It's managed to significantly reduce customer queuing times, increase drive-thru sales by five per cent

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and 82 per cent of customers believe it has improved service,' he says.

Symbol handheld wireless computers are also saving time in the stock room.

Tiley's IT team has integrated the devices into stock taking to read barcodes and for food safety tasks,
using thermal probes to read temperatures and record food checks.

But McDonald's has no plans to introduce radio frequency identification (RFID) tagging into its supply
chain management system.

'We've looked at RFID twice, but at the end of the day it's not worthwhile at the current time,' says
Tiley.

The high cost of specially designed tags and readers for freezer environments makes RFID introduction
unfeasible, he says.

McDonald's also plans to introduce centralised stock ordering this year, to streamline its supply chain.

The system, being developed by McDonald's and software supplier Manugistics, will take into account a
range of data including previous store sales, customer demographics, special events and weather
forecasts, to automate stock ordering systems across Europe.

'It's aimed at simplifying the process and reducing manual ordering errors,' says Tiley.

To help the company's 40 business analysts and customer support staff, it also plans to outsource more
systems and application development.

Last year, Tiley outsourced back office computer systems to Indian offshore firm Blue Star in
Bangalore.

The system that controls tills, crew scheduling and other management functions can be run more cost
efficiently in India.

'I would be a fool if I didn't look at cheaper solutions, especially considering the quality offered out
there,' he says.

The company has also outsourced its IT helpdesk to Fujitsu.

But Tiley says he is looking at introducing more e-learning and CD-ROM training tools for its staff to
reduce systems downtime and cut the number of calls made to the helpdesk.

Through outsourcing and automating many of McDonald's IT functions, Tiley believes that his team will
be able to spend more time supporting IT managers in the 27 other countries where the company has a
presence across Europe.

This could bring further cost savings by reducing the need for expansion of IT teams in smaller
European markets.

If you're one of the two million customers visiting McDonald's each day, look out for the changes - they
might just be making your fast food experience faster.

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What's new at McDonald's?

z Some 561 drive-thru restaurants will offer BT Openzone WiFi hotspots to attract travelling
business people
z In the US, wireless trials at 400 restaurants in four cities attracted new, mainly older users, 60 per
cent of whom said they wouldn't have visited if it wasn't for the wireless access.
z Touch screen TVs will be piloted in 10 restaurants during the first quarter of this year
z Internet terminals and PlayStations are likely to be introduced this year
z Handheld devices are already being used to take orders and cut queuing times in 500 of
McDonald's UK restaurants

© Incisive Media Investments Limited 2011, Published by Incisive Financial Publishing Limited,
Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and
Wales with company registration numbers 04252091 & 04252093

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