Case Study Research Team #7
SIUC Campus Carbondale, Illinois 62901
Telephone (618) 555-1212
Memo
Date:
February 17, 2010
To:
Dr. Nancy Martin
From:
John Emery, Eric Agnew, Lynn Caravello, Robin Crombar
Subject:
Proposal for Infrastructure Projection and Goals for DELL
Purpose
The purpose of our proposal is to remediate the current infrastructure of Dell by utilizing
research and technology trends to adjust the future goals and ambitions.
Summary
With the current decline of Dell’s market share, the responsibility of Dell’s management
increases to produce a solid projection of company growth and innovation. Our case study
team is providing a needed outline proposal of analysis and review for suggested avenues of
change in both personal and business systems.
Introduction
We are seeking approval to present options for projected changes to the infrastructure of the
internal and external business environment. This goal originates from the current decline in
market shares and the awareness of economic changes that have negated a need for change
and restructuring of the missions of Dell.
Changes that are taking place at Dell include Best Quality Services, Management Values, Market
Leadership—micro environment, JIP—Just in Time inventory, market cheapest laptops, SWOT
Analysis, PEST Analysis, Customer Feedback Surveys, single sourcing, and quality customer
support and service.
Recent modifications to the internal environment of Dell are further enhancing this
organizational structure by forcing it into account management and account service. Specialists
in storage, networking, and systems management are being trained and certified. There is a
significant shift from PC sales to solution sales.
Changes taking place with their external business environment include three areas: Remote
Environment, Industry Environment, and Operating Environment. Dell’s Remote Infrastructure
Monitoring (RIM) included in the Remote Environment provides a comprehensive solution that
helps IT departments meet the challenges of monitoring and managing remote IT assets, and
can help with the following:
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Incomplete information on remote assets
High cost of manual monitoring and remediation
Patch management of assets in remote locations
Security compliance
In the Industry Environment Dell works with many industry groups to participate in global
incentives:
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American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE)
Business Applications Performance Corporation (BAPCo)
Climate Savers Computing Initiative (CSCI)
Distributed Management Task Force (DMTF)
Energy Conservation Center Japan (ECCJ)
European Computer Manufacturers Association (ECMA) International
Minimum Efficiency Performance Standard (MEPS)
Standard Performance Evaluation Corporation (SPEC)
SPEC power
SPEC Graphics and Workstation Performance Group (GWPG):
EPA Project: http://www.epa.gov/dfe/pubs/projects/pcb/index.htm
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High Density Packaging User Group (HDPUG) Halogen-Free Projects
International Electronics Manufacturing Initiative (iNEMI)
Information Technology Industry (ITI) Council
Digital Europe
Tech America
Dell’s Operating Environment is changing from proprietary Unix to standards based which will
simplify operations and can reduce costs. They follow three phases: assessment (evaluate
needs), design (fulfill needs), and implementation (run the new system).
Recent modifications to the external environment of DELL include:
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Sold its manufacturing plant in Lodz, Poland to Taiwan-based electronics company
Foxconn Technology Group back in December 2009.
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Computer maker Dell Inc declared the launch of the USD2m Dell Youth Connect
program in Beijing, China in November 2009.
Dell Youth Connect is a global program designed to support education and digital
inclusion initiatives for underserved young people.
The company has donated USD2m in cash and in-kind grants to two non-profit
organizations, the China Education Development Foundation (CEDF) and the China
Youth Development Foundation (CYDF).
In November 2009 Dell announced the launch of six new inkjet printers for home or
office use.
Acquisition of the Texas-based outsourcer Perot Systems' shares
Dell plans to launch a new unit, Dell Services, into which it will integrate Perot's tech
and business services offerings. The merger could be a boon for enterprises looking to
implement new architectures like virtualization and cloud computing—but those
benefits will only be realized if Dell can successfully manage the integration challenges
that will arise upon the deal's closure.
Agreement to buy Kace, maker of KBOX IT systems management appliance. The product
fits with what Dell learned from acquiring Equal Logic in 2008: that it needed to make
its hardware easier to use, quicker to set up, and with fewer tasks to run it.
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Proposed Goals
Reestablish customer loyalty and appreciation for Dell products and service.
Setup a highly effective Demand pull system
Establish and maintain a strong value chain model with suppliers
Utilize the power of virtual integration to enhance velocity throughout the supply chain and
ensure integrated electronic commerce
Establish an aggressive integration of supply companies and integration software
manufacturers
Mission Research Analysis Review
Dell’s mission will be to setup a highly effective Demand pull system. Dell must either share its
ecommerce data directly with its manufacturers or it can setup an automated system to
contact its supplier each time a product reaches a certain level. Based on this new work
environment, dell must make its ecommerce site evolve. Dell must differentiate its website
from all other competitor by implementing features no other site has.
Site Must
Allow for system customization.
Provide an accurate estimate of cost.
Provide a product in a timely fashion
Update inventory in real time.
This means turning inventory into information. Data which can be shared with suppliers.
Perhaps a real-time view or Demand Pull.
Mission goals include creating a smart database that has its own checks and balances (keep
track of inventory). Setup a secure way to explain Dell’s needs to suppliers with virtual
integration.
In continuation with Dell’s need to differentiate, dell must also extend its website to include
knowledge based support/ troubleshooting. This can be in the shape of forums, as well a online
technical documents provided by a knowledge based team, which will allow for easy, quick,
collaboration with Dell’s customers. You can also provide productivity tools to help user
maintain their system over the lifetime of the product. This will allow for much more accurate
CRM Data and knowledge. In order to keep track of this information each unit must have its
own individual product code and each product that is assembled must have its order
information stored.
Revised Organizational Structure
Vice President,
Operational Services
Information
Services
Developmental
Systems
Computer
Operations
Operational
Research
Technical
Services
Operational
Services
Telecommunications
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The current IS organization structure did not address the need for continuous
communication. The adjustment of the Developmental and Operational Research
needed to be stepping stones into the steps of computer operations, technical services,
and operational services. These key areas then can focus on telecommunications. All of
these areas need to be instantaneous in their communication for the new system to
flow correctly. The connection of Operational Research directly to Computer
Operations, Technical Services, and Operational Services allows for the direct influence
needed for efficient data flow. The same concept works for Developmental Systems
connecting to these three areas. Develop and Research need to be key elements for
strategic operations and adjustments.
Competitive Force and Value Chain Research Analysis Review
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The threat of substitute products or services and the probability of customers switching
to that substitute based on the likeness in comparison to the original, in this case, Dell
systems. If there is another company that can come up with a product that has many of
the same features as Dell there would be a possibility that it could overtake Dell in the
market. A way to ensure this doesn’t happen is to always be on the watch for what the
‘other guy’ is selling and stay ahead of the tech wave.
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The threat of entry of new competitors goes hand in hand with substitution only now,
pointing towards a new company, which would compete face to face with Dell. A good
way to combat this theory, is one, take the AT&T approach and buyout all the
competition, which in some sense would be a more expensive way of doing it. Two,
align the company, Dell, with enough strong feedback so that customers know it was a
mistake and give them the positive reinforcement they need to come back to Dell.
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The intensity of competitive rivalry is a very important step to remember. The
customer has to be ultimately aware of where it is, one would get the best quality and
product in a way that they need to complete all satisfaction and to keep the customer
coming back to Dell to get that product. A lot of companies try to offer the same things
at the same costs, when their business model allows, but to be successful, Dell has to
stay ahead of the gap in order to make sure to be out all of the other companies.
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The bargaining power of consumers is a way to understand that no matter what Dell
does to improve its model, the ultimate decision as to whether or not something works
is in the power of the buyer. If people are not buying the product, then Dell is losing
money. There is no time for a down time in today’s market. If there is no growth, then it
is all in jeopardy. Have to make sure the customer is spending the dollar in order to
ensure for a dollar tomorrow.
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The bargaining power of suppliers is one that is often overlooked. When planning on
building a product for customers and charging a certain amount to ensure that Dell is
making money, one can’t forget about paying the supplier for the parts needed in order
to successfully build the machine in question. A way to ensure this is, to partner with a
particular company and make them the ultimate supplier to just Dell. This will ensure
that both companies are equally satisfied and can succeed.
Recommendations
(1) To keep the advantage in favor of Dell, the company should develop different strategies for
their two sets of clients, individual and corporate.
(2) For corporate companies, Dell should focus more on enterprise solutions that medium-sized
companies are implementing and concentrate on storage and servers for larger companies. The
government’s move to overhaul the health care system will play a big part in the integration of
storage and server capabilities.
For individuals, the capabilities through the direct model are more related to high-end
products. The entry into the low-end should be done in a more thoughtful manner, by
combining the direct model with the retail model.
Dell’s buyer profile is tilted towards the tech-savvy customers who are looking to upgrade an
old machine or buying a second, and for these customers Dell’s selling model works perfectly.
Conclusion
With the current changes in health care reform, governmental information technology
establishment of growth, and the cloud computing explosion; the need to stay ahead of these
changes requires constant organizational review and adjustment. The IT focus needs to be
shifted to the reengineering of current models of infrastructure and business processes and
work towards a unified integrated supplier to customer relationship. This then will align with
the ERP focus of coordinating computing resources which incorporates faster balance with
supply and demand. By reviewing the suggested analysis of Dell, there is a belief that future
market share and product demand will progress to the high levels of success that a company
strives to achieve and maintain.
Works Cited
Content. (2010, 2 16). Retrieved 2 17, 2010, from Dell:
http://content.dell.com/us/en/corp/d/corp-comm/earth-product-environment-industrialgrp.aspx
DELL. (2010, February). Retrieved February 16, 2010, from Recent Press Releases :
http://content.dell.com/us/en/corp/about-dell.aspx?c=us&l=en&s=corp
InformationWeek. (2010, February 17). Retrieved February 16, 2010, from The Business Value
of Technology :
http://www.informationweek.com/TechSearch/Search.jhtml;jsessionid=KQBXKY2MRTYVRQE1G
HRSKHWATMY32JVN?search=Search&site_id=InformationWeek&personality=category&cid=iw
k-header-search&queryText=Dell+
Ivythesis. (2010, 2 16). Retrieved 2 17, 2010, from Typepad:
http://ivythesis.typepad.com/term_paper_topics/2008/01/dell-computers.html
Job Functions. (2010, 2 16). Retrieved 2 17, 2010, from bnet:
http://findarticles.com/p/articles/mi_m0ECZ/is_2009_Nov_24/ai_n45034716/?tag=content;col
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Private Writing. 2006. 16 Feb 2010
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