Overview



Organizational Background



Business Analysis: SWOT, Gap



Why ERP: Benefits



Assumption



Constraints in Building Case



Recommendations

Organizational Background

 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)

SWOT Analysis

Strengths

 Domination of PC Market Share  Effective biz infrastructure  Shrewd branding  8 year alliance with SAP

Weaknesses

 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

Opportunities

 Standardize processes for global presence  Exploit economies of scale  Facilitate mergers & acquisitions  Diversify into other consumer electronic markets

Threats

 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

Current State:

Source: Dell 2005 Annual Report

“As - Is” Analysis (Cont’d)

Global and distributed nature of business

“As - Is” Analysis (Cont’d)

Current State:

 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

Desired State:

 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

Why ERP

Benefits

 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

Assumption

ERP

Constraints in Bldg Case

Research + Interviews with Stakeholders Feasibility Analysis: Technical, Economic, Organizational Value and Risks Work-plan

Statistics

Real World Business Systems Proposal would involve:

In this case, unfortunately, we do not have access to proprietary business information that Dell guards judiciously:

years ago…”

“…

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.

Recommendations

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.

Acknowledgements

Dell, Michael. Harvard Business School Remarks. Mar 10, 2004.

http://www.dell.com/downloads/global/corporate/speeches/msd/2004 _03_10_msd_harvard.pdf

Rollins, Kevin. Arcadia University Commencement Address, May 16, 2005.

http://www.dell.com/downloads/global/corporate/speeches/kbr/20 05_04_05_fose.pdf

For more information, please visit:

http://www.dell.com

or http://www.sap.com/index.epx

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

Thank you and we appreciate your business!