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Four Things I Learned About Digital Transformation from a Stop at McDonald’s

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We were two hours into a foodie road trip, and I was ready for coffee. As my high-tech responsibilities faded in the rear-view mirror, the subject of digital transformation prepared to cram its way into my conversation again!

Lonesome roads skirting California's Edwards Air Force Base took us through small and unremarkable towns. Edwards is huge—it's 12 square miles larger than Los Angeles! My coffee radar had been on for many miles. I'm not sure if I was more concerned about the very real possibility of gas station coffee or my wife's predictable reaction to it.

Then, I spotted the familiar Golden Arches of a bright McDonald's restaurant.

As we entered, it seemed calmer than expected—more like a table-service restaurant. Several welcoming kiosks intrigued my inner geek. Using the touch screen to order was a new experience. Pictures on the screen made it easy, and the print was large enough that I didn't need my glasses—McDonald's put some thought into this! Wait, they now have breakfast all day? The transformation I began to observe stretched far beyond a couple of kiosks. I began to sense real innovation had occurred since my last burger.

It's Not Real until It's in the Restaurants

McDonald's founder Ray Kroc used to say, "It's not real until it's in the restaurants.'' It's obvious—actual transformation demands a full-scale rollout. Technology sandboxes and pilots are important. Yet, they often consume excessive calendar time, delaying benefits. When ongoing investigation results in bloated requirements documents, it delays transformation. Innovation must be deployed to all users—the sooner the better.

Simple Scales and Complex Fails

From the user's perspective, the McDonald's transformation is simple. It's intuitive and requires no training. Esri's pioneer software guru, Scott Morehouse, often stated, "simple scales and complex fails. Give customers what they want—all day!" Breakfast all day didn't cannibalize burger sales as some feared; it increased revenue. Genuine transformation appears simple and obvious.

We should never overthink it.

Digital Transformation Changes Behavior

Hungry customers adopted new behaviors. They now order at the counter, the kiosk, or on a McDonald's app from their phone. They pick up their order inside or at the drive-through window, or they have it brought to their car when they arrive. Of course, the app guides users to the closest location, but it also monitors a user's location in real time. When app customers drive within 90 seconds of the pickup location, this location intelligence immediately triggers employees to assemble their order. They do so at just the right time, absolutely maximizing freshness. Location intelligence matters!

Digital Transformation Is Good for Business

The McDonald's transformation focused on improving the customer experience, and now the company also makes more money. McDonald's stock shot up nearly 27 percent. The options to get what you want—when, where, and how you want it—are astounding. Most of the ordering stress is replaced by a culture of hospitality and table service. Gone are the piles of ketchup packets handled by dozens of other customers. A polite server personally delivered the two creamers we specified at the kiosk, directly to our table along with a clean, individually wrapped coffee stirrer. Maybe it was my perception of quality, but the coffee tasted better too! My father was right—the customers aren't always right, but they are kings.

Wrap-Up

As we consider utility digital transformation, we should ask ourselves, what does this level of consumerization in society do for customers' expectations? McDonald's customers will also turn on/off electric service. They will install solar panels on their homes, complain about their high utility bills, and wonder why a crew is digging up their street. Customers rightfully expect simple, intuitive digital solutions from their utility providers.

Worldwide, McDonald's serves 71 million meals a day—which is more than the population of the United Kingdom. By preparing meals in 90 seconds, McDonald's is a just-in-time supplier of food. The company's digital transformation, while fantastic for customers, also transformed its business processes and cost-effectiveness.

Utilities are just-in-time enablers of electric power for the same customers. Many utility processes are optimized for something other than the customer. They are often optimized for employees or for legacy reasons.

How long does it take to initiate a new electric service? Would McDonald's customers be impressed? How would their view change if they were notified 90 seconds before a troubleshooter arrived to address their problem?

Finally, location intelligence is central to digital transformation for utilities. Location is a common thread between customers, utility assets, outages, and employees. The ArcGIS platform offers a complete GIS solution that helps utilities work better. Simple apps and web maps are easily deployed to communicate the important information to everyone. Everyone understands a map

For more information on how the ArcGIS platform enables breakthrough improvements in safety, customer relations, asset management, grid modernization, and innovation, download our free e-book.

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Esri
Esri, the global leader in geographic information system (GIS) software, builds the most powerful mapping and spatial analytics technology available.

Discussions

Doug Houseman's picture
Doug Houseman on January 23, 2019

So I had time to sit and watch at McDonalds when the order boards first came out. My wife needed to do something and the closest place to wait was there. I had a full hour on a Sunday morning to watch people come in and order. Both the 3 order boards and 1 cash register were open. 

My observations:

1) On average it took the customer 3 times longer to order from the board. Even folks who had used it before (I asked). 

2) about 20% of the people who started an order at the board went to the cash register to do the order, abandoning the board. 

3) At least 10% of the people who used the order board ended up with something in their order that they thought they had cancelled or that they thought they had not ordered.

4) Anyone over about 60 avoided the order boards and when to the counter, the same was true of children under 10 who were just going to get something more, with cash from their parents. 

5) Even regulars took time to navigate the sub-menus to add or remove ketchup and other items from the sandwiches

6) Order processing by the kitchen was slower than I was used to, probably because of the customization.

While self service is a great idea, see the self service checkouts in grocery stores and at the gas pump (yes there used to be people who pumped your gas for you). McDonalds and other eateries have a ways to go to get it right. 

If you are going to offer self service to your customers - test it with all age and education groups to find out who will and will NOT use it - understand what is confusing and fix it. Do not assume everyone is like you and will want what you want in the way of self service. 

Realize self service will cost you some customers. Two couples came in for coffee and were so intimidated by the boards, they walked back out and left. 

Art Bjornson's picture
Art Bjornson on January 23, 2019

But, McDonalds failed. Five days after the start of the "Pick Two" promotion you could not use the kiosk to place your order.

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