Why ERP: Benefits
Business Analysis: SWOT, Gap
OverviewOverview
Assumption
Organizational Background
Constraints in Building Case
Recommendations
Organizational BackgroundOrganizational Background
Dell Effect: award-winning customer service, reliability, support, focus on innovation, encourages business process improvement (minor to moderate changes)
19841984 Founded by Michael Dell 19961996 Listed in S & P 500 Stock Index 20022002 #1 US Computer Systems Provider 20052005 #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.
SWOT AnalysisSWOT Analysis
StrengthsStrengths OpportunitiesOpportunities
WeaknessesWeaknesses ThreatsThreats
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” AnalysisAs – Is” Analysis
Current State:
Source: Dell 2005 Annual Report
““As - Is” Analysis (Cont’d)As - Is” Analysis (Cont’d)
Global and distributed nature of business
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.
Current State:
Biz Process Improvement InitiativeBiz Process Improvement Initiative to continuously refine its direct approach to manufacturing, selling & servicing
Price for PerformancePrice 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
““As - Is” Analysis (Cont’d)As - Is” Analysis (Cont’d)
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” AnalysisTo - Be” Analysis
Mission Statement: “To be the most successful computer company in the world at delivering the best customer experience in markets we serve.”
Desired State:
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 ERPWhy ERP
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
Benefits
Improve quality, cut costs, reduce delivery time
AssumptionAssumption
ERP ERP
Constraints in Bldg CaseConstraints in Bldg Case
Research + Interviews with Stakeholders
Feasibility Analysis: Technical, Economic, Organizational Value and Risks
Work-plan
Real World Business Real World Business Systems Proposal would Systems Proposal would involve: involve:
StatisticsStatistics
In this case, unfortunately, we do not have access to proprietary business information that Dell guards judiciously: “… we are a we are a moving target. We're not going moving target. We're not going to tell you our most secret new to tell you our most secret new things that we did two or three things that we did two or three years ago…”years ago…” Michael Dell, 2004.
RecommendationsRecommendations
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.
AcknowledgementsAcknowledgements
This is a production by T1 Members from IST 600 ERP Systems: Implementation Issues, Summer 2005Virat Chirania, Yin Wah Kreher, Enit Thomas, Virat Chirania, Yin Wah Kreher, Enit Thomas, and Miao Yangand Miao Yang
For more information, please visit: http://www.dell.com or or http://www.sap.com/index.epx
Thank you and we appreciate your business!
Dell, Michael. Harvard Business School Remarks. Mar 10, 2004. http://www.dell.com/downloads/global/corporate/speechttp://www.dell.com/downloads/global/corporate/speeches/msd/2004_03_10_msd_harvard.pdfhes/msd/2004_03_10_msd_harvard.pdf
Rollins, Kevin. Arcadia University Commencement Address, May 16, 2005. http://www.dell.com/downloads/global/corporate/spehttp://www.dell.com/downloads/global/corporate/speeches/kbr/2005_04_05_fose.pdf eches/kbr/2005_04_05_fose.pdf