We have been screening our initiatives based on their customer impact and their

We have been screening our initiatives based on their

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"We have been screening our initiatives based on their customer impact and their ability to deliver financial benefits to the system in the near term," Skinner wrote in the memo. "With that in mind, we have made the very difficult decision to immediately stop all work on Innovate." Immediately canceling Innovate meant that between 100 and 200 contractors and McDonald's employees working on the project would be pink-slipped or reassigned. And the $170 million spent in 2002 specifically for the Innovate project was lost. McDonald's current CIO Dave Weick says most of that $170 million was spent on the "research and development" of Innovate. BearingPoint and PricewaterhouseCoopers (now part of IBM Global Services) consulted on the project and provided the initial analysis and framing used to determine the project's viability and likely return on investment (ROI). "As far as the ROI, candidly, I don't want to go into specifics," says Weick of measuring Innovate's possible profit return. "We did have some numbers but I'm not able to discuss them. I can tell you that we viewed Innovate as a five-year plan to get [implemented] in our major markets. Clearly, with that kind of expense, we were sure we would have seen substantial ROI had the project gone forward." PricewaterhouseCoopers (PWC) would not comment about its work on Innovate. BearingPoint spokesman John Schneidawind says the consulting services firm will not comment on McDonald's nor will it say whether or not McDonald's is even a customer. However, McDonald's CIO Weick did say that BearingPoint played a key role in Innovate's development (see Dossier, p. 54). Jim Carlini, president of information technology consultancy Carlini &
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Associates, says BearingPoint, PWC and McDonald's executives likely sat down in the initial stages of Innovate's development to determine what benefits the company hoped to gain from the system. "I'm sure they wanted to know basic information like sales per restaurant, service times, the number of crew members working a particular shift and all the other data you'd want to improve your operations," he says. "I'm sure they spent millions just determining what platform would work best in all the stores and, possibly, some prototypes and initial software licenses to test it in some capacity." Carlini, however, is skeptical that $170 million was spent entirely on consulting fees and some early-stage hardware and software. "I'm guessing they buried several other pet technology projects in there as well," he says. "But those consulting fees can add up in a hurry." The rest was apparently spent on Sun Fire-class enterprise server hardware from Sun Microsystems to host the Oracle 11i software that would form the backbone of Innovate. The fate of that hardware is unknown, though sources at Sun indicate that another project is under way at McDonald's involving Sun hardware. "We're not at a point where we can talk about anything because it's still in the middle of things," says Aaron Cohen, a Sun customer public relations spokesperson.
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