Want Wireless With Your Fries?

Taiwan is actually the first country in the McDonald's empire to implement such a wide-ranging project, to benefit both internal operations and customers alike. In the United States, just a few stores are experimenting with wireless access, and most don't have a real-time data connection back to any regional headquarters.

"We have become the benchmark country for other countries that are trying to do this," says Julian Huang, head of the information services department at McDonald's Taiwan. "We have had better than 99.5 percent uptime so far. This will help us to extend our brand and keep up our leadership in the crowded Taiwanese fast-food marketplace."

Scope of the Project
McDonald's Taiwan had been using ISDN to connect all of its properties. It found the huge bill and skimpy bandwidth a double challenge. It wanted to bring in new online applications that would give sales managers better feedback over regional promotions and the tools to react more quickly to changing customer preferences and new menu choices. That required building a new network infrastructure to enable near real-time customer management. Doing so would also cut overall monthly WAN costs and boost throughput.

At the same time McDonald's was considering these new applications, it also wanted to demonstrate its leadership in the marketplace and provide wireless Internet access to its customers in Taiwan, who are more apt to stick around the golden arches as a destination than fellow U.S. diners. So the company thought Internet access would be a big draw and would ultimately boost food sales as customers lingered around their laptops.

"We have found that wireless service attracts more businesspeople and widens our customer base," Huang says.

With a combination of in-house IT staff in addition to strategic ISP and vendor partners, McDonald's managed to complete the project for all of its restaurants in less than a year. Several factors that helped get things under way was the cut-rate price of ADSL broadband networks in Taiwan, brought on by competition from several national ISPs, and a heavy investment and large footprint of broadband networks in the country.

"One year ago, we used an ISDN network for connecting our restaurants," Huang says. "The new ADSL network is saving us NT$9M per year over the next five years, which is a big savings." Even at about NT$35 to the U.S. dollar, that works out to a lot of Big Macs--and goes right to McDonald's bottom line.

McDonald's also needed to pick the right ISP and vendor partners, including one that could collocate its data center and build the necessary Web-based management tools to monitor the new network. It chose Easy-Up.net, a Taiwan-based ISP that specializes in wireless, to help deploy the new WAN links across the country.

"We worked together with Easy-Up as a team to do the installations because our equipment is collocated with them," Huang says. "We identified a standard process flow and scheduled build-out. First stage was a five-store test for three months last November. Then we did some fine-tuning with any exceptions that we found and worked on procedures on how we escalated and resolved problems."

McDonald's also had to upgrade its firewall portfolio to handle the wireless users running across its ADSL network so that customer traffic would remain separated from the internal store systems. "Security is the first priority for us," Huang says. "We needed to create VPNs between each store and headquarters."

The company considered products from Check Point, Cisco, NetScreen and SonicWall, then ultimately picked NetScreen as its supplier. "NetScreen was the easiest to manage, the easiest to implement, had the best price and also had very capable redundancy and high-availability features," Huang says. "It has enabled us to accomplish our goals by securing our network infrastructure, so that we can be focused in growing our business and in expanding our service to all our customers around the country."

To create a secure environment, McDonald's built three different layers using the tools offered by NetScreen and its wireless access point vendor, a local Taiwanese company. First, VPN tunnels were implemented between each store and the central data center, collocated at Easy-Up's control room. NetScreen remote clients run on each of the one or more PCs located in each store. Second, NetScreen tools were used to isolate the in-store network while having a private subnet that is logically separate from the subnets used by its wireless customers. Finally, the private network was restricted to the VPN configuration and specific MAC addresses of the in-store computers, so that only those PCs can gain access.

Cross-Promotion Opportunity
McDonald's also made the strategic decision to hook up with Intel just at the time the company was making a major push with its Centrino brand of wireless laptops. Intel was happy to work with McDonald's and cross-promote the venture.

"We are doing some joint promotions with Easy-Up and Intel/Centrino in our stores," Huang says. According to surveys done in Taiwan, more than 3 million people there and the majority of McDonald's customers have wireless laptops. That made it a nice opportunity for both Intel and McDonald's.

For the time being, restaurants are selling one-time access cards to customers for NT$50 (about US$2) for up to an hour of access. The card requires a user name and password, which a user types in to authenticate to the network. "We are still in the first stages of awareness; by year's end we will have more discrete pricing for our cards and more flexibility for our customers," Huang says.

While wireless is nice, the main focus of the project, was to provide better feedback for sales management; the company's IT department designed a series of Web-based applications that can track sales data per-region, per-day on their PCs and even on their data-enabled cell phones as part of this application.

"This means our sales managers can be smarter about what they are trying to manage. We also provide dynamic queries so managers can check particular promotions, such as our current focus on hamburger sandwiches," Huang says. "They can really see the effects of various pricing changes and promotions. We will be working on getting as granular as tracking updates every 15 or 30 minutes. This will help us to extend our brand and keep up our leadership in Taiwan."