Transcript Slide 1
Business Analysis: SWOT, Gap
Why ERP: Benefits
Constraints in Building Case
1984 Founded by Michael Dell 1996 Listed in S & P 500 Stock Index 2002 #1 US Computer Systems Provider 2005 #1 America's Most Admired Company (Fortune Magazine) Dell Direct Business Model : eliminates retailers that add unnecessary time & cost, or diminish Dell's understanding of customer expectations.
Dell Effect: award-winning customer service, reliability, support, focus on innovation, encourages business process improvement (minor to moderate changes)
Domination of PC Market Share Effective biz infrastructure Shrewd branding 8 year alliance with SAP
Online shopping not a way of life beyond US Lack of solid dealer relationships Lack of engineering expertise Customer satisfaction may suffer due to lack of visible storefront
Standardize processes for global presence Exploit economies of scale Facilitate mergers & acquisitions Diversify into other consumer electronic markets
Stiff competition for sales of product lines in service & storage Unstable partnership w/HP in R & D for blade server solutions Merger & acquisition?
Talent drain w/exec mgmt leaving
“As – Is” Analysis
Source: Dell 2005 Annual Report
“As - Is” Analysis (Cont’d)
Global and distributed nature of business
“As - Is” Analysis (Cont’d)
Dell turns over inventory every 4 days on average. Most of Dell's expenses are made up of selling, general and administrative costs rather than R & D.
Biz Process Improvement Initiative to continuously refine its direct approach to manufacturing, selling & servicing Price for Performance biz strategy: Dell vs. competitors like HP, IBM… like Wal-mart vs. Saks Avenue Biz focus: customer vs. product; end customer vs. dealer 2/3 of sales to large corporations broadened brand & appeal Learn from best practices of global operations: “
we actually find we learn … when we compare our own operations around the world…” (Michael Dell, March 2004, Harvard Biz Sch)
“To - Be” Analysis
Mission Statement: “To be the most successful computer
company in the world at delivering the best customer
experience in markets we serve.” Facilitate growth & diversification into new markets, “expanding the role of the PC” (Michael Dell, 2004) Enhance dealer relationships Align and standardize business functions & processes Continue to expand its global market presence Expense Management: keep operating costs low Accountability: “just one strike and you're out…” Kevin Rollins, CEO, May 2005
Help grow its share of the world market Augment its supply chain and inventory management Reduce manufacturing overheads thru integrated system Boost productivity through standardization of processes (Standardization will help facilitate entry into new markets) Enhance its credibility in B2B market Improve its repair / re-cycle and maintenance services Improve quality, cut costs, reduce delivery time
Constraints in Bldg Case
Research + Interviews with Stakeholders Feasibility Analysis: Technical, Economic, Organizational Value and Risks Work-plan
Real World Business Systems Proposal would involve:
In this case, unfortunately, we do not have access to proprietary business information that Dell guards judiciously:
we are a moving target. We're not going to tell you our most secret new things that we did two or three
Michael Dell, 2004.
Without further ado, we recommend that Dell…
implements an ERP system.
learns from its past failure and conducts a better and more thorough feasibility analysis.
selects SAP as its choice of an ERP system.
Dell, Michael. Harvard Business School Remarks. Mar 10, 2004.
Rollins, Kevin. Arcadia University Commencement Address, May 16, 2005.
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This is a production by T1 Members from IST 600 ERP Systems: Implementation Issues, Summer 2005
Virat Chirania, Yin Wah Kreher, Enit Thomas, and Miao Yang
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