Thomas W. Sweet, SVP & CFO, Dell Inc.
Dell has played a significant role in transforming computing, enabling affordable and more pervasive access to technology around the globe. And over the last five years, four major technology trends have forced customers to rethink their entire IT infrastructures–Cloud, Big Data, Mobility and Security–and ultimately created an environmental shift that drove the strategic evolution of Dell’s business model.
Dell began as a PC hardware company with a build-to-order model and started its shift to become a leading end-to-end solutions provider more than five years ago based on incorporating customer feedback about their needs for broader, standards-based, open solutions to help them better solve their business issues. Since then, Dell has rapidly expanded its capabilities through a series of acquisitions as well as through organic investments resulting today in a $57 Bn revenue company–almost half of which is generated by businesses in client cloud computing, enterprise data center solutions, security, software and services. Our traditional client business of notebooks, tablets, and desktops continues to be an important and strategic part of our solution portfolio.
As the business model of Dell advanced, it became apparent very quickly that our financial infrastructure needed to evolve to support these new, solutions-based capabilities. I use the term financial infrastructure deliberately as all of our transaction cycles–order-to-cash, procure-topayment, employee compensation, including variable incentive structures, and our core general ledger capability–needed to change. These modifications to our infrastructure included core system functionality enhancements, expanded data models, reporting capabilities and significant business process re-engineering. Making these changes has required, and will continue to need, a significant amount of effort and investment. As we have gone through our growth and evolution to a solutions company, we have learned a number of valuable lessons that we continue
to build upon. Our experience has led us to better understanding of what it takes to transform the infrastructure of a large multi-national company that does business in more than 180 countries and facilitates nearly a million customer interactions and transactions daily. I thought it would be informative to highlight some of our learnings as they’ve helped us to deliver better results and value to our customers.
• Understand where the business is going.
This seems pretty basic, but is actually hard to do in practice as a company evolves. We have learned to more effectively leverage investments and resources to clearly understand the planned business model changes and fully vet what the transaction and business process impacts are. For instance, in selling solutions, ensuring we work with the sales organization and solution development teams to try to understand how the go-to-market motion changes, what data elements should be captured, the processes and system interaction model, and how the back office transactions systems need to utilize the data to provide the information needed to record, fulfill, invoice, collect and service the customer. Over time, we have learned some of our original assumptions regarding the systems, processes and data elements were no longer valid and needed to be modified. To strengthen our oversight and governance, we created the Business Architecture Team (BAT), a group of leaders responsible for the integrated systems and process blueprint to accelerate Dell’s evolution to an end-to-end solutions provider. The BAT has been an integral part of our organization as we realize it’s important to invest the resources and time early on in the planning process to learn as much as we can.
"We created the Business Architecture Team (BAT), a group of leaders responsible for the integrated systems and process blueprint to accelerate our evolution to an end-to-end solutions provider"
• Avoid customizing the core financial systems wherever possible.
For years at Dell, we customized our purchased IT applications or defaulted to building our own because of our differentiated business model. While that may work well in a relatively stable industry, it adds enormous complexity, cost and time when you are trying to rapidly transform a company and the systems infrastructure. We have swung 180 degrees on this and now default to no customization and making it work with the standard functionality whenever humanly possible. While you rarely can get away from customization entirely, we focus on making sure we exhaust all avenues before we go down this path. Limiting customization creates a more efficient upgrade process, provides improved flexibility and reduces vendor support costs. The importance of standardizing our global systems has heightened knowing that we will need flexibility in our system design as the business continues to evolve.
• Force the organization to look at the business processes.
It’s important to have the discipline to really look at the processes, usage model and environment that surrounds the system or application. Otherwise, it can lead to wasted investment dollars and systems that don’t exactly meet your business needs or are designed around the “as is” business process. At Dell, we have strengthened our approach over the years and have a much more holistic methodology to our infrastructure that focuses on business process redesign as well as system functionality. But to do this, you need to ensure a few things, which lead me to my final point.
• Devote the resources and leadership talent.
We have learned over the years that to do this right for big, high impact programs, there needs to be a named high-caliber executive leader whose sole responsibility is to get the program done and done well. Taking key talent out of their normal job and making these programs their full-time job has been a very effective way to ensure that we get the right focus and accountability. The same is also true for resources–devote the right level of resources, which in many cases means moving strong subject matter experts to these programs full time. This has been one of the most effective ways to drive success. It may put a strain on the organization, but we have learned to resist the “part-time or night job” mentality.
Business model shifts and corresponding infrastructure is never easy and in the technology solutions industry, is just the reality of the business. Getting the most out of your investment dollars and positioning the business, and our customers, to be successful are what drive our decisions at Dell.