Capgemini & Publicis.Sapient to develop McDonald's digital solutions

31 August 2017 Consultancy.uk

The international consulting firm Capgemini have entered into a multi-year agreement as IT strategic providers to fast-food giants McDonald’s. With support from Publicis.Sapient, another global professional services provider, Capgemini will work to overhaul the restaurant chain’s digital capabilities. The plan to accelerate McDonald’s digital transformation of their restaurants comes as employees of UK branches took the historic decision to strike for improved working conditions and an end to zero-hour contracts.

Global technology consulting specialists Capgemini have been unveiled a new multi-year IT strategic provider agreement with McDonald’s Corporation. Publicis.Sapient, another global leader in consulting services, will cooperate to provide McDonald’s strategic IT solutions for their evolving restaurant and digital capabilities. The international food and drink behemoth has launched an aggressive transformation strategy aimed at improving profitability through implementing digital technologies to the core of their business.

Capgemini plans to open a new Global Digital Retail Center in Chicago to support the relationship, develop and showcase industry-applied business innovation, and attract talent to its growing North American operations. With the agreement to involve Capgemini in the process, McDonald’s will hope to leverage the companies’ combined expertise to accelerate digital technology innovation and transform the restaurant experience for customers, however the move will also fuel further speculation that the restaurant is aiming to demobilise staff looking for improved pay and conditions.

Capgemini & Publicis.Sapient to develop McDonald's digital solutions

According to Paul Hermelin, Chairman and Chief Executive Officer, Capgemini Group, “As we continue from the foundation of our strategic relationship that goes back 10 years through our IGATE heritage, we appreciate McDonald’s vision and trust. We look forward to supporting their growth plan by developing new ways to dramatically enhance the customer and employee experience, and restaurant operations.”

“As a strategic provider, Capgemini enhances our ability to bring speed, scalability and disruptive innovation across our restaurant and digital technologies as McDonald’s continues to transform the customer experience through greater convenience and personalization,” said Jim Sappington, Executive Vice President - Operations, Digital, & Technology Systems, McDonald’s Corporation. “Capgemini has proven its ability to understand our business, our industry and our customers, and has the ability to deliver the highest levels of scalable technology innovation.”

Arthur Sadoun, Chairman and CEO of Publicis Group meanwhile said, “The McDonald’s brand has been a household name for generations and has continued to lead in its category by introducing new products that are uniquely informed by the needs and wants of its customers.”

Automation race

Last year McDonald’s saw global comparable sales increase by 3.8%, including positive comparable sales across all segments, while returning $2.2 billion to shareholders through share repurchases and dividends in the fourth quarter and $14.2 billion for the full year. This marked the successful achievement of the Company's targeted return of $30 billion revenues for the three-year period ending 2016. In spite of this, the corporation continues to strive to cut back on spending, with labour expenses earmarked as one key front on which to do so, in line with the increasingly competitive food and drink sectors of the UK and US. Automation is seen by the company as a long-term method of delivering these savings, with innovative technologies becoming decreasingly expensive as corporations across all sectors invest in digital and AI solutions, from finance to airlines – both areas Capgemini are already involved with projects in.

Average UK wages meanwhile were reported in the same year to have fallen by as much as -10%, and workers at two McDonald’s restaurants in the UK will go on strike on 4 September, the US Labor Day holiday, in an attempt to coordinate action against the fast food giant with allies around the world, while calling for £10-an-hour wages and an end to controversial zero-hour contracting. As fast-food workers across the US took action in order to improve their conditions, former McDonald’s CEO Ed Rensi, sparked fears of a race to the bottom, by claiming that if low skilled employee insist on having an increase income in the US, their employers would be forced to replace them with more productive and cost-effective robotic innovations. Plans for automation of some 2,500 restaurants across the world later confirmed in 2017, with McDonald’s looking to meet its "Experience of the Future" drive by year-end, including digital ordering kiosks which will target a decrease in human labour across its restaurants.

Some research has suggested that rather than making employees obselete, AI in the workplace could boost their efforts. Data, gathered between February and March 2017 by Capgemini themselves, found that 40% of respondents believed machine learning would likely have a positive impact in the workplace along with 32% expecting the same from robotics. Only 10% of respondents felt  that automation would have a negative impact.

An exhaustive 150 page analysis published by consulting firm McKinsey & Company, meanwhile, concluded that by 2055, just under 5% of jobs would likely be completely replaced by technology, while over 60% of all work activities could be automated by 2055. While the report suggested that this might lead to an overhaul of labour relations that could lead to greater leisure time, with the global workforce still conceivably being well paid for its lessened responsibilities, leading to an improvement in quality of life as well as productivity and profitability. However, the combative tone of McDonald’s past and present executives suggests this will not be the case here.

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