Management Information Systems for Tourism Hospitality Organisation

Using Management Information Systems for Tourism Hospitality Organisation

CONTENTS

Introduction to the Project                                                                                                     2

Introduction to McDonald                                                                                                     3

Role of MIS within Tourism and Hospitality context                                                               4

Importance of Management Information System for Hospitality and Tourism Industry             6        

Use of IT System in an Organization to attain Competitive Advantage                                    7

Type of Database and Data warehousing in Tourism and Hospitality                                      9

Use of E-Commerce and MIS in the Industry                                                                       11

System Design Requirements of Tourism and Hospitality Business                                         14

Use of IT to Support Customer Relation Management                                                          16

Role of Enterprise Resource Planning in Tourism and Hospitality                                           18

IT Security Issues within the Tourism and Hospitality Industry                                               20

Ethical and Privacy Issues on Use and Storage of Data.                                                        21

REFERENCES                                                                                                                   23

Introduction to the Project

The hospitality industry includes a broad category of fields within the service industry including restaurants, theme parks, lodging and additional fields within the tourism industry. The basic purpose of this project is to explore a wider understanding of the use of Management information system and Information technology and various other emerging concerns for a globalised company like McDonald. The project also explores the need of strategic Customer relationship management and the use of Enterprise resource planning in the attainment of the overall business strategy of an organization.

Objectives of the Project

        i.            To explore the nature and need Management information system and Information technology for Tourism and Hospitality based organization

      ii.            To analyze Information technology plans and policies of the company

    iii.            To identify the emerging issues related to Information technology for Tourism and Hospitality based organization

    iv.            To understand the need of the need of strategic Customer relationship management and the use of Enterprise resource planning for attaining overall business strategy of an organization

Research Methodologies

This project makes an extensive use of secondary sources of data. The information has been collected through the official website of Mc Donald’s, news and articles related to the hospitality industry,  news and journals of the company provided through various websites, reference books of human resource management and so on.

Introduction to McDonald

McDonald is the world’s largest chain of fast food restaurant, spanning over 119 countries and serving around 68 million customers daily. The company had its installation in 1940 as small hamburger stand in California by Richard and Maurice McDonald. Initially operated as barbecue restaurant, it was reorganized in 1948 to offer hamburger as a product. Later on the company witnessed a period of massive growth after Ray Kroc joined the company as a franchise agent in 1955 and purchased the chain from the McDonald brothers. The first filed U.S. trademark for Mc Donald’s was on 1961 which provided the “Drive-In Restaurant Services”. With the global expansion of McDonald, it has been a symbol of globalization and has spread the American way of life across the world.

The primary products of Mc Donald’s are hamburgers, cheeseburgers, chicken items, French fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies and fruit. It’s headquarter is situated in the United States, operating in more than 34,000 restaurants worldwide where more than 75% are operated by independent owners, creating an opportunity of employment to about 1.7 million people. McDonald is often referred as a benchmark for its standard policies and practices relate to human resources, social responsibility and moral and ethical values. A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion.

McDonald’s has become emblematic of globalization, sometimes referred to as the “McDonaldization” of society. The Economist uses the “Big Mac Index” as a measurement of purchasing power of countries. Where Big Mac Index is the comparison of Big Mac’s cost in various world currencies which can be used to informally judge the purchasing power parity. The index varies from Norway (highest) to India (lowest).

McDonald global success has been empowered by the use of sophisticated technology and Information Systems. McDonald makes use of Management Information System for overall management and accessing of the information. Similarly the use of service friendly Information Technology systems and the adaptation to appropriated Customer Relation Management has enabled McDonald to cater the needs of large base of customers in a prompt and appropriated way. The use of advanced IT and MIS systems has not only enabled McDonald to increase its revenue in the global market, but also create a strategic position in the market in contrast to that of its competitors.

Role of MIS within Tourism and Hospitality context

Management Information System is a general term for the computer systems in an enterprise that provides information about its business operations. It typically includes computerized systems to gather relevant data continuously, from both the internal and external environment of an organization. Its objective is to design and implement procedures, processes and routines that provide suitable detailed reports in an accurate, consistent and timely manner. For e.g: MIS application in McDonalds directs managers in the management of the employees and the ordering and tracking of hamburgers, buns, potatoes and soft drinks. Because restaurants are consistently busy throughout the day, the MIS is called upon to assist the manager in maximizing the scheduling of individuals to cook and serve the food. The MIS further helps track restaurants cash flow and guard against inaccuracy and waste.

MIS are typically computer systems that are used for managing of five primary components: hardware, software, data and information for facilitating decision making, procedures for design, development and documentation of data, people in the form of individuals, groups or organization. In the most basic term, MIS is the term used to define how individuals, groups and organizations evaluate, design, implement, manage, and utilize systems to generate information to improve efficiency and effectiveness of decision making.

Management Information System relates to the organized and systematic:

1)      Collection

2)      Organization

3)      Distribution

4)      Storage of wide information

5)      Managerial Control and analysis of data and information pertaining to a business operation of an organization.

Role of MIS

For an organization like McDonald, the use of MIS is basically focused on the following areas:

1)      Organization-wide information: for a customer-focused industry like tourism and hospitality, MIS provides a big picture regarding the overall organization wide information. It ensure updated and strategically important information in the form of data and reports

2)      Decision-making process: the output of MIS is available in the form of reports which can be used extensively in the decision-making in the organization. It also helps the organization to prepare strategically for the upcoming business endeavor.

3)      Managerial control and analysis: Better formulated, integrated and centrally consolidated data and information provides a manager with an insight regarding the overall managerial process of an organization. It enables a manger to have a firm control over the managerial activities and process.

4)      Computer-based system: MIS being a computer based process enables a tourism and hospitality industry to provide a swift and effective service to its customers. Real time information about the organization is available which enables the organization to cater to the needs of the customers’ in a prompt and effective way.

  

Importance of Management Information System for Hospitality and Tourism Industry

McDonald is basically focused on service as a product offering, MIS enables it to provide information for a decision support process of management. It facilitated the organization to achieve the business goals in a most efficient manner. Since the decision making is not restricted to a particular level, for a globalised company like McDonald, the MIS is expected to support all the levels of the management in conducting the business operations.

1)      It enables McDonalds to strength themselves and identify and address weaknesses due to the presence of revenue reports, employee performance report, sales report and so on.

2)      Availability of strategic reports at a right time will help McDonalds to tap the opportunities at the real time and address the weakness, finally giving an organization a competitive advantage.

3)      Properly generated reports will help the management to identify the emerging challenges and thus prepare the company before hand to tackle with those challenges.

4)      Meaningful use of strategically formulated reports will enable global company like McDonalds to maximize the benefit of the opportunity coming from the external environments and minimize the effects of the harmful events.

5)      MIS system also gives a big picture of the company and acts as a communication and planning tool.

6)      It also help to eliminate the delays and ineffectiveness in the handling of the customers as a updated report is available regarding the taste, preference of the customers.

7)      Similarly, McDonalds has been able to ensure that the effective management of customer data can help the company to perform direct marketing and various promotional activities.

8)      MIS also helps the Tourism and hospitality industry like McDonalds in strategic planning, management control, operational control and transaction processing by providing with appropriate reports and information.

9)      MIs also helps the junior management by facilitating with the operational data for planning, scheduled control and helps them further in decision-making at the operation level to correct an out of control situation.

10)  Besides assisting the middle level and the top level in execution of their tasks, MIS also plays the role of information generation, communication, problem identification and this finally assisting the decision-making. Hence MIS plays a vital role in the overall management, administration and operation of a global Tourism and Hospitality based organization like McDonalds.

Use of IT System in an Organization to attain Competitive Advantage

McDonalds is undeniably a boss in the food chain industry and also in technology. It uses information technology for various functions. Its technology system is highly innovative. They keep relation with others by using a global virtual network.

McDonald exercises various IT components to enlarge its service to the consumers. Different customized software and software components are used by this corporation. A large section of distribution is also automated. Information Technology is also used in promotional activities. Through its technology improvements such as FTP’S help desk service, network and application consolidation and other technology achievements which are deeply enhanced and eventually benefiting to McDonald’s millions of customers in global world.

Use of IT system in an organization brings various opportunities to an organization. While ensuring that the company achieves various benefits from the use of IT system, the company also makes sure that such advantages add-up for attaining competitive advantage to the organization. Basically, IT system implementation in an organization provides following benefits that enables an organization to strengthen its core competencies.

·                        Globalization is the most basic benefit of IT system installment. McDonalds has been empowered by IT system to span all over the world, with its target customers scattered throughout the globe.

·                        Company like McDonalds can ensure lower operational cost as it makes communication cheaper, quicker and more efficient. Use of internet has enabled direct communication from different part of the world in a most cost-effective way.

·                        Computerization of the business process has brought cost effectiveness by streaming business to make them extremely cost effective. It helps McDonalds to increase productivity which ultimately gives rise to profit that means better pay and less strenuous working conditions.

·                        For a global company Hospitality and tourism based company like McDonalds, Radisson, etc, the use of IT helps to bridge the cultural gap by helping people from different culture to communicate with one another, and allow for the exchange of views and ideas.

·                        Business never sleeps these days. For hospitality based industry accessibility is an important weapon to survive in the market. IT has made it possible for businesses to be open 24*7 all over the globe. People can access the service of a company in a country by sitting in another country.

·                        Use of modern and sophisticated IT system can enhance the customer service and providing a company an edge in what it offers hence ensuring competitiveness.

·                        IT helps McDonalds to improve internal performance, infrastructure performance and thus increasing product quality at a reduced cost. It can help streamline and integrate channels to market, create new channels and integrate multiple channels.

·                        IT concepts and issues are ever emerging. For McDonalds, Use of IT in training and knowledge sharing can enhance the performance of knowledge of workers and enhance organizational learning. It also helps to establish a strong rapport to customers, suppliers and other stakeholder’s thus ensuring effective supply chain and customer relationship.

  

Type of Database and Data warehousing in Tourism and Hospitality

There are variety of Database management system used in a tourism and hospitality industry each of them providing unique advantages and disadvantages. The use of a particular database model is based on the need of the organization, its size, the volume of data to be mentioned, cost installation and so on.

A data warehouse is a relational database that is designed for query and analysis rather than for transaction processing. It usually contains historical data derived from transaction data, but it can include data from other sources. It separates analysis workload from transaction workload and enables an organization to consolidated data from several sources

Types of Database in Tourism and Hospitality Industry

1)      Hierarchical databases

Hierarchical Databases have been used for a long time. It is one of the oldest methods of organizing and storing data and it is still used use by Tourism and Hospitality based organizations for making travel reservations. This mode of database management is organized in pyramid fashion, forming a structure like that of branch of tree extending downwards. Related records are grouped together which form the higher level records and lower-level records. Hierarchical databases work by moving from the top down. A record search is conducted by starting at the top of the pyramid and working down through the tree from parent to child until appropriate child record is found.

For a Tourism and Hospitality based industry, the advantage of Hierarchical model is that they can be accessed and updated rapidly because the tree-like structure and the relationships between records are predefined.  However, this model of database is criticized as the relationship between the lower level records is not permitted if they are form different parents. Also this model of database management is so old and rigid that addition of a new field record requires that the entire database be redefined.

2)      Network databases

This model of database is similar to hierarchical model in the use of hierarchical structure. However, there are few differences. Instead of looking upside-down tree, a network database looks more like an interconnected network of records. The advancement over drawback of Hierarchical model is that, each child or member at lower level can have more than one parent or owner. This model of database allows more connections between different types of data and hence is considered flexible and more useful. As like to the hierarchical model, network databases must be defined in advance.

The major drawback in use of network model is the number of connections that can be made between records.

3)      Relational databases

Here the relationships between data files id relational rather than hierarchical. Relational databases connect data in different files by using common data elements or a key field. Data in relation databases is stored in different tables; each having a key filed that uniquely identifies each row. This model is more flexible as it allows the prompt search of data in a real time by making use of the unique key.

For a tourism based industry use of relational database makes more sense as customer information can be linked to specific product information and can be accessed easily.

4)      Object-oriented databases

It is more sophisticated as it makes uses of graphics, photographs audio and video etc. the model can be used to store data from a variety of media sources, such as photographs and text, and produce output in a multimedia format. Hospitality industry makes use of this mode to get incredible multimedia capability. Demerits that it brings are that it is more costly and many organizations are reluctant to install this model.

   

Use of E-Commerce and MIS in the Industry

Information is the lifeblood of an organization. At the contemporary time, more than other resources, organization seems to focus on the tactful collection and use of information for success in the short and long run. As because tourism is an information rich industry, organization focus on attaining quality information of not only the customer domain but the external environment and forces as a whole. In such connection, the development of internet services by players in the tourism industry assists with the goal of attaining valuable information as e-tourism offers opportunities for speedy communication and global access with minimal expense.

The benefit of management of the information via the use of ecommerce and MIS is of paramount to the industry. Basically, among various industry sector hospitality and tourism industry has probably been the most affected industry by the internet. The industry depends on the distribution of information about its product and services.  Also the industry makes use of internet based ecommerce tools and techniques to collect, record, and disseminate information about various stakeholders: customers, public, media, government, and so on.

E-Commerce

Ecommerce is a new way of conducting, managing and executing business transactions using modern information technology. Basically, the internet is the main technology whereby all elements of a commercial transaction(advertising, production, purchase, payment and the delivery of the services) can be conducted on an interactive basis with more than one person, unconstrained by time and space, in a multimedia environment at a relatively low cost.  It is a type of industry where buying and selling of product or service is conducted over electronic systems such as the internet and other computer networks. It makes use of technologies such as mobile commerce, electronic fund transfer, supply chain management, internet marketing, online transaction processing, electronic data interchange, inventory management systems, and automated data collection systems. It makes use of set of technologies, applications, and business processes that link business, consumers, and communities for buying, selling, and delivering products and services. It is also used for integrating and optimizing processes within and between businesses.

MIS

Management Information System is a general term for the computer systems in an enterprise that provides information about its business operations. For eg: McDonald makes use of Transaction Process System to make tactful use of information about customers. Generally MIS details out an organized approach to the study of the information needs of an organizations management at every level in making operational, tactical and strategic decisions. Its objective is to design and implement procedures, processes and routines that provide suitable detailed reports in an accurate, consistent and timely manner.

Benefits in Light of Attaining Short term and Long term Objectives

For information rich industry like McDonald’s, use of ecommerce technologies helps speed up the flow of information and to eliminate unnecessary human interventions by executing routine business transactions quickly and accurately, 24 hours a day. For e.g.:  MIS system is used to produce periodic reports such as daily list of employees and the hours they work, monthly expense report and so on.  Some of them are as follows:

1.      Expand Geographical Reach

Ecommerce enables an organization to acquire customers across the country and around the world. Making use of ecommerce typically means no limits as to whom and where we can sell our products. It enables an organization to go with: sell to anyone, anywhere, anytime.

The global operation of McDonald has been facilitated by ecommerce.

2.      24*7 Open

McDonald has increased customer base as it ensures 24*7 accesses to its product offerings. Customer can access the product offerings of the hotels and other tourism based industry irrespective of time and location constraints. It allows us to have unlimited store hours, giving the customers 24 hours a day, 7 days a week access to shop and buy items. In addition, the cost attached to having of 24*7 open stories much less than maintaining a physical storefront, providing an additional benefit to the organization.

3.      Increase Customer Satisfaction

Customers will have an extra access to product updates, shipping details, billing information and more. Also as there is no boundaries, customers can shop from home, work, or anywhere they can make a connection. Also the product booking, purchase and shipments will be faster.

4.      Build Customer Loyalty

Use of ecommerce will help create an easier means for customers to purchase items also facilitating with a unique way to display and describe about the product offering in an informative, visual and interactive way. McDonalds enriches the customers loyalty each time as customer visit them, making ecommerce a great for improved customer satisfaction and visitor loyalty.

5.      Helps to Create New Relationship Opportunities

For McDonalds the use of ecommerce will enable a location free access to the product offerings, the business will avail with the opportunity to establish new relationship with the customers and other stakeholders. Customers will know about the services available, product suppliers will request to add their products, and other business will approach to partner with the organization.

6.      Increase Brand or Product Awareness

By reaching to the millions of customers all over the globe, displaying the site prominently to them will allow McDonalds to enhance and strengthen brand name will also increase awareness about the product line.

7.      Potential to Increase Overall Business Sales

With a web site, a company can automatically become a global provider of goods and services, with an edge over the larger companies. As such internet acts as an effective channel to reach new customers. McDonalds makes sure that its services are available 24*7 via its internet portal.

8.      Potential to Increase Company Profits and Decrease some Costs

Opening an online extension of the business outlet is a great way of boosting sales and potentially profits. As there will be a large base of target customers throughout the world, the chance are high that the company will have large sales volume and hence higher profit margin.

9.      Facilitates easy dissemination of Information

McDonald makes use of Decision Support System that makes use of the customer’s information to conclude to a valid and logical decision. The decision can be routine or of occasional type.

Thus the use of MIS and e-commerce provides an organization with various advantages as mentioned above. Such advantages when tapped righteously, at a right time can enable an organization to achieve the short term goals which further add up to achieve the long term goals in an effective way.

System Design Requirements of Tourism and Hospitality Business        

System analysis defines the system requirements and system design creates the ways to fulfill them. System design is the next step of system analysis which details out the identified criteria are to be implemented. For a giant hospitality and tourism based company like McDonalds, the need of a unique system design is a must. System design requirement specifies system specifications which are given below:

Input: Every process in a system demands input. The quality of the output solely depends in the nature and quality of the inputs and the processing systems. Every system needs some input. Here, input may define as a raw for the system. Customer order for beverages, drinks and lunches etc can be included into input of this company’s system design. Quality of input must be ensured for a effective system design.

User interface: An interactive and easy interface between customer and company is essential. User interface means the interface between customer and company. The web portal of McDonalds can be regarded as user interface. User interface must be simple to use, logical and error free. Complex or sophisticated user interface may lower the customer satisfaction. Website should be easy to navigate, and easily accessible.

Design of database: Database is a collection of large volume of raw inputs that form information when processed. Design of database refers the use of logical data model with possible speed. Input data into database is very easy matter but maintaining them and acquiring them when necessary is not so easy. Tactical sorting and arrangement of the data for the future purpose is must. As such, McDonald must introduce an appropriate file and record to facilitate the use of database.

Processing: Conversion of the data into meaning information is a must. After getting input via the integration of user interface data are kept in database for processing. Data implementation by using various application modules is the main activity of processing. Data gathered form customer will not process automatically. Some kind of processing mechanism is needed for it.  For example, Enterprise Resource Planning (ERP) makes use of various data of the enterprise system.

Output: Output is the processed form of the input that has been generated after passing through the system process and that has gone through certain value addition process. Output refers delivering asked service to customer and earn profit. In output, timing and quality are the major concerns. Availability of quality service (output) to its customer is necessary for McDonalds.

Control system: There must be some control mechanism to monitor the activities stated above. Control in each step of the conversion process is essential. For e.g.: Input must stay in determined limit and reasonable.  Processing of input must be consistence with organizational procedures.  Output may not always be of desired quality.

Security: The system should have some security mechanism to preserve data from various IT security issues like password hacking, unauthorized access etc. The system should integrate with anti-malware and anti-spyware and should have the ability of protecting itself from hackers trying in getting unauthorized access. For a company like McDonalds, the assurance of the safety of the customer data and information is required.

Documentation: Every process within the system should be documented. Documentation provides a way to skip form the problems when they arise in the near future. These can also be used as a reference whenever some sorts of changes or advancements are to be made. Documentation is the only solution for any system related problems whenever they rise. So, the system must have some documentation mechanism to record every process. It also helps organization to keep track on employees’ activities of related field.

Being a multinational Hospitality and Tourism a based company, McDonalds must have a simple and easy to use system design with some unique competitive advantage. Basic, logical and easy to interface system design is vital for success at this contemporary world of competition and technological advancements.

  

Use of IT to Support Customer Relation Management

IT system facilitates McDonalds to maintain a database of information regarding the taste, preferences, economic capacity of customers and various other information. An organization constantly keeps on updating such variety of information. Keeping databases of an information regarding enables McDonalds to identify who the target customers are, where they stay, what are their needs and preferences and so on. Identification of valuable information about the customers enables it to serve to their unique needs and wants in a prompt way and in an effective manner. A typical CRM is assisted and supported by IT system that enables a formation of CRM systems.

In McDonalds Customer Relation Management (CRM) keeps a keen focus on customers as the key to success of a business. CRM used information technology to create a cross-functional enterprise systems that integrates and automates many of the customer-serving processes in sales, marketing, and customer services that interacts with a company’s customers.

Benefits of CRM for an organization:

Use of CRM system in McDonalds has ensured the availability of sales reps with the software tools and company data sources they need to support and manage their sales activities, and optimize cross-selling and up-selling.  For e.g.: sales prospect and product information, product configuration, and sales quote generation capabilities.  CRM also gives McDonalds a real-time access to a single common view of the customers, enabling them to check on all aspects of a customer’s account status and history before scheduling their sales calls.

Needless to say CRM also help marketing professionals accomplish direct marketing campaigns by automating such tasks as qualifying leads for targeted marketing, and scheduling and tracking direct marketing mailings. Then the CRM software helps marketing professionals capture and manage prospects and customer response data in the CRM database, and analyze the customer and business value of company’s direct marketing campaigns. CRM also assists in the fulfillment of prospects and customer responses and requests by quickly scheduling sales contacts and providing appropriate information on products and services to them, while ensuring that the relevant data are captured for CRM database.

A CRM system provides service reps with software tools and real-time access to the common customer database shared by sales and marketing professionals. CRM helps customer service managers create, assign, and manage requests for service by customers.

Also, CRM allows business to identify and target their best customers-those who are the most profitable to the business-so they can be retained as lifelong customers for greater and more profitable services. It makes possible real-time customization and personalization of products and services based on customers wants needs, buying habits, and life cycles. CRM can also keep track of when a customer contacts the company, regardless of the contact point. And CRM system can enable a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses. All of these benefits would provide a strategic business value to a company and major customer value to its customers.

Companies like McDonalds these days make use of various technologies to support the CRM. The use of IT in Tourism and Hospitality industry is increasing at a speedy rate. For e.g: McDonald at present time has been installing WI-FI hotspots in most of their restaurants globally. This model targets more young and tech-people into the restaurants. Also McDonald makes use of Electronic Payment Model which quickens the ordering and payments of food, putting in a system that shortens processing time, preparation time and payments.

  

Role of Enterprise Resource Planning in Tourism and Hospitality

Enterprise Resource Planning

Enterprise Resource Planning (ERP) is the technological backbone of e-commerce, and enterprise-wide transaction framework with links into sales order processing, inventory management and control, production and distribution planning and finance. ERP is a cross-functional enterprise system driven by an integrated suite of software module that supports the basic internal business processes of a company. For example, ERP for a tourism and hospitality industry will typically process data from and track the status of sales, inventory, delivery, shipping, and invoicing, as well as forecasting the human resources requirements.

For McDonald the use of ERP plays important role of running system on front. Whatever decision are made, mostly are through the system of ERP. ERP is supported by various other supports. This is the place where major decision making and their execution takes place.

The installation of Enterprise Resource Planning (ERP) has given McDonalds an integrated real-time view of its core business processes, such as production, order processing, and inventory management, tied together by Enterprise Resource Planning (ERP) application software and resources (such as cash, raw materials, and production capacity), and the status of commitments made by the business, no matter which department of unit of business has made an entry of the data. The installation of ERP for a company like McDonald requires the availability of ERP techniques like: EDI, AMS, CAD/CAM/CAE, DMS and so on.

For a tourism and hospitality based industry like McDonalds, ERP implementation typically consists of integrated modules of manufacturing, distribution, sales, accounting, and human resource management applications. For example, during the production of service/product, ERP assist in material requirements planning, production planning, and capacity planning. Some of the sales and marketing processes supported by ERP are sales analysis, sales planning, and pricing analysis, while typical distribution applications include order management, purchasing, and logistics planning. ERP systems support many vital human resources processes, from personnel requirement planning to salary and benefits administration, and assist the execution of the most crucial financial record keeping and planning.

Benefits of ERP to Tourism and Hospitality Industry

ERP when installed in an organization can bring immense benefit. Such benefits help the globalised organization like McDonalds in terms of significant business benefits. Many companies have created major business values via the use of ER.

Some of the benefits that ERP provides to Tourism and Hospitality industry like McDonald are:

1)      Quality and Efficiency:

ERP creates a framework for integrating and improving a company’s internal business processes those results in significant improvements in the quality and efficiency of customer service, production, and distribution of the product offering. The quality service offerings are enhanced at a lower cost.

2)      Decreased Costs

Many tourism based companies like McDonalds make the use of ERP for decreasing the cost in the transaction processing and hardware, software, and IT support staff compared to the non integrated legacy system that were replaced by their new ERP systems.

3)      Decision Support

ERP provide vital cross-functional information on business performance quickly to managers to significantly improve their ability make better decisions in a timely manner across the entire business enterprise.

4)      Enterprise Agility

McDonalds can ensure simplicity in its operation via the use of ERP. For e.g.: Installment of ERP breaks down many hierarchical and departmental barriers of business processes, information systems, and informational resources. Thus results in more flexible organizational structures, managerial responsibilities, and work roles, and therefore a more agile and adaptive organization and human resource that can tap the business opportunities in an effective way.

                                                          

IT Security Issues within the Tourism and Hospitality Industry

The use of the information technology in business presents major security challenges, poses serious ethical dilemmas, and affects the society as a whole in a different ways.

The use of IT in businesses has had major impacts on society, and thus raises ethical issues in the areas of the crimes, privacy, secrecy, individual freedom, employment, and so on. Also IT issues bring concerns about the health, working conditions, etc.

However, IT has had beneficial results as well as detrimental effects on the society and the people in each of the above mentioned areas, at the same time. For instance: computerization of the purchasing process in a McDonalds may have the adverse effect of eliminating people’s job, but also have the beneficial results of improving working conditions and executing the designate tasks with higher efficiency and quality.

Security issues in Hospitality and Tourism based industry are also in paramount numbers. For a giant company like McDonalds with its operation throughout the globe, the security regarding the non-disclosure of information, making use of customers information for different business proposes, making use of the personal contacts for other than business use, tracking the taste and preference of the customers, etc have been a major issues these day. More than this, sending of excess information to the customers regarding various products and service offerings, making frequents calls to them for the business surveys are also the emerging issues regarding the security of customers.

The concerns of privacy and security issues in Tourism industry are debatable as companies go in using massive data and information of its customers for different purposed. The use of such information has been made not only in facilitating the customers with the purchase decision, but also for tracking the need and preference of the customers which has time and again brought constant threat to the privacy issue of the customers.

Ethical and Privacy Issues on Use and Storage of Data.

Ethical Issues

Business ethics is concerned with the numerous ethical questions that managers must confront as part of their daily business decision making. The issues of intellectual property rights, customer and employee privacy, security of company records, and workplace safety are highlighted because they have been major areas of ethical controversy in information technology.

An employee working in an organization should accept the ethical responsibilities that come with the working activities. Such responsibilities involve properly informing the role of an employee as a vital human resource in the business systems. A manager working in an organization should be aware of his/her responsibilities to make decisions about business activities and the use of the information technologies, which may have ethical dimensions that must be considered.

An employee should promote ethical uses of information technology in the workplace. The issues like: monitoring of an employee work activities and electronic mail electronically, letting employees use their work computers for private business or take home copies of software for their personal use, electronically accessing of the employee’s personnel records, selling of the customer information extracted from the transaction processing system to other companies etc,  are always debatable.  The most crucial things that guide the ethical and privacy issues in a business environment is the stockholder theory that holds that mangers are agents of the stockholders, and their only responsibilities is to increase the profits of the business without violating the law or engaging in fraudulent practices. However, the social contract theory states that companies have ethical responsibilities to all members of society, which allows corporations to exist based on a social contract.

Information technology has created ethical controversy in the areas of intellectual property rights, customer and employee privacy, security of company information and workplace safety.

Equity:

Executive salaries comparable with, product pricing, Intellectual property rights, non competitive agreements

Rights:

Corporate due process, employee health screening, sexual harassment, affirmative action, equal employment opportunity, shareholders interest, employment at will, whistle blower

Honesty:

Employee conflicts of interest, security of company information, inappropriate gifts, advertising content, and government contract issues, financial and cash management process, business practices in foreign land.

Exercise of corporate power:

Product safety, environmental issues, disinvestment, corporate contributions, workplace safety and so on.

Privacy Issues

Information technology makes it technically and economically feasible to collect, store, integrate, interchange, and retrieve data and information quickly and easily. This characteristic has an important beneficial effect on the efficiency and effectiveness of computer based information systems. However the power of information technologies to store and retrieve information can have a negative impact in the Privacy issues of every individual.

Some of the Privacy issues faced by the use of IT in McDonalds are as follows:

·         Accessing individual private email conversations and computer records, and collecting and sharing information about individual gained from their visits to Internet websites and newsgroups

·         Using customer information gained from many sources to market additional business services

·         Collecting telephones numbers, email addresses, credit card numbers, and other personal information to build individual customer profiles, and so on.

The Internet is notorious for giving it users a feeling of anonymity, when in actuality; they are highly visible and open to violations of their property. Most of the internet and it world wide web, email, chat, and newsgroup, are still a wide open, unsecured electronic frontier, with no tough rules on what information is personal and private. For e.g.: information about the Internet user is captured each time a user visits a website or newsgroup and recorded as a “COOKIE FILE” in the hard disk, which is accessed by the service provider later.

Though there are various privacy issues because of the use of the IT, we can still take some precautions to minimize the effects out of such issues. For e.g.: sensitive emails can be protected by encryption, if both email parties use compatible encryption software built into their email programs. Newsgroup postings can be made privately by sending them through anonymous remailers that protect your identity when you add your comments to discussions. Also we can ask the Internet service provides or other service providers to not sell the name and other personal information to mailing list providers and other marketers. Also declining to reveal personal data and interest in online services and websites profiles can lessen the exposure in the electronic snooping.

References:

Books:

Kalakota, Ravi, and Andrew B. Whinston, Frontiers of E-Commerce, Pearson Education, 2002

Kalakota, Ravi, and Marcia Robinson, E-business 2.0, Roadmap for Success, Reading, MA: Addison-Wesley, 2001

Ricky W. Griffin, Management, biztantra, 2009

Wesbsite:

http://en.wikipedia.org/wiki

http://essaybank.degree-essays.com/education/mcdonalds.php

http://en.wikipedia.org/wiki/McDonald's_legal_cases

http://mcdonaldsmis.blogspot.com/p/mcdonalds-is_04.html