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
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
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