 Why ERP: Benefits  Business Analysis: SWOT, Gap Overview  Assumption  Organizational Background  Constraints in Building Case  Recommendations

Organizational Background  Dell Effect: award-winning customer service, reliability, support, focus on innovation, encourages business process improvement (minor to moderate changes)  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 Direct Business Model

SWOT Analysis StrengthsOpportunities Weaknesses Threats  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 Current State: Source: Dell 2005 Annual Report

“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 Initiative  Biz Process Improvement Initiative to continuously refine its direct approach to manufacturing, selling & servicing Price for Performance  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 “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” 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 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

Assumption ERP

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: Statistics we are a moving target. We're not going to tell you our most secret new things that we did two or three years ago…” 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 years ago…” 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 Virat Chirania, Yin Wah Kreher, Enit Thomas, and Miao Yang 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 or For more information, please visit: or Thank you and we appreciate your business! _03_10_msd_harvard.pdf _03_10_msd_harvard.pdf Dell, Michael. Harvard Business School Remarks. Mar 10, _03_10_msd_harvard.pdf _03_10_msd_harvard.pdf 05_04_05_fose.pdf 05_04_05_fose.pdf Rollins, Kevin. Arcadia University Commencement Address, May 16, _04_05_fose.pdf 05_04_05_fose.pdf