THE ERP SYSTEM IN MCDONALD COMPANY

ERP at Mc Donald's

ERP at Mc Donald's

Introduction

The strategic impact of ERP systems varies among industries, companies and, over time, within an individual company. Throughout the ERP system selection and implementation process, a strategic business perspective emphasizing cooperative and cross-functional approach should be clearly communicated across functional areas by the top management of the company.

ERP systems or certain modules of such systems may be more significant to some business units and/or some functional areas within a business unit than others. The importance of IT in an individual company can be considered by looking at two aspects, the dependence and the degree of dependence on the existing system, and the strategic importance of the IT development initiatives for the company. Thus, companies can be divided into four categories according to whether the strategic impact of these two aspects is high or low. The company's core competencies direct the decision to make/own versus buying an information technology solution pertaining to a functional area or the whole enterprise. In house development of ERP solutions may be ideal from the point of best fit, but it has to be kept in mind that individual companies may not be able to develop them quickly. Companies where IT is in the support role should consider customizable predefined solutions rather than make/own philosophy.

ERP system needs to have the flexibility to provide Information Technology (IT) solutions irrespective of the line of business and the strategy the organization uses to compete in the market. Further more, ERP system needs to support the strategy of each of the functional areas based on the business strategy and it needs to be sensitive to both external (customers, competition) and internal (management, workforce) environments. For example, ERP System offered by SAP uses the latest advances in information technology and provides a solution to meet the unique needs of each industry. The system is designed to fit any industry and has predefined solutions that are based on the best industry practices (the customers also have the option to customize the solution to their requirements). Managers can use SAP solution maps and the business framework to develop and customize their own individual solution maps, which can be used as a plan to integrate best of breed industry solutions into their existing IT environment. Further, SAP provides flexible interfaces to interact with other vendor software and also provide regular updates to the software based on best industry practices (SAP, 1998).

Thus, SAP addresses specific strategic needs through the process of design/classifications based on customer order, i.e. make-to-order production and repetitive manufacturing. One or more of these process flow strategies can be associated with an organization based on its business strategy. SAP's emphasis on the process oriented structure requires a company to define the operation function as to how things are done, what should be done, who should do something and what information is needed for doing it. Defining and modeling every small part of the business helps SAP dissolve any discontinuities in ...