Dell Chief Information officer Roles and Improvement
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New roles of Chief Information Officer (CIO) DELL
DELL was once known for its outstanding customer service and well-oiled supply chain, but now is struggling to gain back the admirer of its customers. In 2006, the company reported disappointing quarterly financial results as they have lost market share and its title as largest computer manufacturer in worldwide. Hewlett Packet (HP) is leading now in the world, leaving DELL behind it. US Securities and Exchange Commission (SEC) has launched an investigation on DELL on their accounting practices and found out that they have falsified quarterly financial statements due to fulfill Wall Streets expectation. [Meridith Levinson, 2007] In 2009, Robin Johnson plays an important role in DELL as CIO till now. Previous CIO Steve Schuckenbrock has also contributed to DELL from 2007 till 2008. Below are the studies on the roles that they have performed to enhance DELL business.
The role of CIO in the late 20th century has been changed ceaselessly as we all know that new technologies, organizational structures and business models in coming 10, 20, or 80 years will evolve. [Ivan Schneider, 2011] As CIO, Robin Johnson has to focus on service support, service delivery, service desk and security management. Each of this service has its extend to enhance the DELL business.
Current Strategy
Be Efficient Enterprise Model
The CIO is practicing to make Dell as Efficient Enterprise whereby they reduce cost in expenditures on data centers, servers, and system engineering. In 2008, the companys IT budget has consumed approximately US$1.2 billion annually. In 2009, Dell has reduced spending of US$150 million and plan to cut another US$200 million. Robin Johnson claims that Dells total cost savings will be close to half a billion dollars in coming years where they avoid of building a new data center. He follows the principles of standardization, simplification, and automation. The fewer operating systems, the fewer tools that need to look at those operating systems, the fewer people needed to run the tools. These entire principles enhance efficiency. [Robin Johnson, 2009]
Robin Johnson highlighted the issues that he faces in dell which nearly up to 100,000 global employees. He would want to accomplish on improving IT across the global operations to integrate IT infrastructure at Dell with companys business strategy. To do so, this step has cost more than 1billion euro. The outcome of it gave the company a position that leads the market. This is to lead a complete transformation in technology to achieve Dells vision across all business area. CIO is satisfied with the IT transformation, but however, the hardest challenge for him is repositioning and relocating the management. Managing IT is less about IT knowledge and on reason of continuous improvement and cost base of IT matter. Innovation is not about to manage tool world, but giving the best alternative to Dell.
Outsourcing
In 2006, Dell changes its business strategy by outsourcing. The strategy is to plan to expand its operation across the globe which is called as US-centric. By focusing on others countries that have emerged as top IT and Software hubs, the company can reduce number of services which they provide in-house. Dell is expanding into growth markets in countries like Brazil, China, India and Central Europe. [Dotmarketer, 2006] By practicing outsourcing, it allows company to focus more on core competencies which leads to better productivity.
Channel Strategy
Dells distinct model of supply chain management, strategy on customization computer directly to customers to meet burgeoning PC demand has been impressed by many companies in late 90s. The high-tech pioneer seems to have limitless growth. However, Dells profits shares have plummeted from their peaks in a short period of time. The research shows that Dells competitive advantage on customizing computers and selling them directly to consumers has shrunk. According to Chopra, “while the speed of integrated circuit development has remained relatively constant–doubling about every 24 months, in line with Moores law–the relative value that consumers derive from each more powerful computing chip has diminished considerably. For example, a three-year-old computer today is capable of handling the most common business applications such as Microsoft Office.”
This has shown that the technology trend has clear implications for customers needs and, in turn, business models for computer sales. Today, customers are willing to choose from a smaller number of off-the-shelf PCs rather than concerning with customization, making a dramatically dampen on the value of direct sales channel and PC customizability. It is no surprise when Dells profits and market share flagged in the year of 2006 to 2007. [Francis Tchertoff, 2008]
Hence, Dell comes to a conclusion of combines direct and retail sales channels to serve both broad segments of the computer market: those seeking standard models and those placing a premium on customization. In 2007, Dell announced that they are selling Inspiron notebook computers through Wal-Marts Sams Club outlets, in major Chinese cities through fifty Gome Electrical Appliances stores, Chinas largest electronics retailer. They have also open the first international retail stores in Rusia, changing direct sales strategy to retail sales strategy (channel strategy). [Sunil Chopra, 2007]
Service Support
Service Support concentrates on day-to-day operation and support of IT Services.
Incident Management
In order to ease the process of system management, Dell comes out with Dell Kace K1000 Management Appliance. It is to save money for the company by cutting off staff hours. There are a lot of features provided in Dell Kace which includes incident management. It save times for configuration or integration by providing a default configuration that can be used on spot. Users can create and manage incident through email support, user portal or K1000 Management console. It is user friendly as there are hierarchical categories, attachments for the case and knowledge base for newbie or user who wants to know more on the incident. User does not need to go through service help desk for incidents that can be solve at hand as the system can guide them which save times. [Dell Kace]
Problem Management
When