INFORMATION &

TECHNOLOGY
MANAGEMENT AT
DELL
SUBMITTED BY:
ABHISHEK SINGH(10/MBA/03)
PARUL TANDON (10/MBA/33)
SAURABH MARWAH (10/MBA /51)
DELL
• Dell Inc. is an American multinational information
technology corporation based in Round Rock, Texas,
United States, that develops, sells and supports
computers and related products and services.

• Bearing the name of its founder, Michael Dell, the

company is one of the largest technological
corporations in the world, employing more than
103,300 people worldwide.

• Dell is listed at #38 on the Fortune 500 (2011).

DELL contd.
• Dell has had notable mergers and acquisitions
including Alien ware (2006) and Perot Systems
(2009).
• As of 2009, the company sold personal computers,
servers, data storage devices, network switches,
software, and computer peripherals. Dell also sells
HDTVs, cameras, printers, MP3 players and other
electronics built by other manufacturers.
• The company is well known for its innovations in
supply chain management and electronic commerce.
Dell’s Business model
Traditional distribution system of the PC industry was indirect
model often referred to as “the channel”
Weakness
• It was common for PC makers to have up to 90
days of inventory on hand and in the channel.

• The high inventory costs and lack of

responsiveness of the indirect channel meant
that there was an opportunity for someone who
could find a way to circumvent the channel.
The company that seized this opportunity
was Dell

Direct marketing
• Selling directly removes two links in the supply
chain where inventory could build up.
• Provide better service to them, and promote
repeat or expanded sales to them.
Build-to-order production
• Allows Dell to introduce new technologies as
soon as the customer wants them.
• Makes it possible to adjust production to demand
very quickly.
USE OF I.T IN DELL’S SUPPLY
CHAIN MANAGEMENT
E-COMMERCE
• Dell was an early and enthusiastic convert to the Internet,
creating its first web site in 1994 and moving many of its
business activities to the Internet ahead of its competitors.

• Also its build-to-order manufacturing processes were

already in place, making it easy to offer customers the
opportunity to configure products online just as they
already did on the telephone.
• Dell also used the Internet to link itself more
tightly to its large customers by developing
extranets called Premier Pages (now
renamed Premier Dell.com). Dell had
developed over 50,000 Premier Pages for
thousands of business customers by mid-2000.
These are used for configuration, ordering,
services, and support, all customized to the
customer’s systems and needs.
Coordinating with Suppliers.
• Dell uses electronic data interchange (EDI)
technology with all of its business partners to send
and receive standard transaction information such as
purchase orders, invoices, and shipping schedules.

• With key suppliers and contract manufacturers, it

also sets up extranets that give these partners access
to order information and forecasts from Dell’s
internal systems, including the Dell Order
Management System (DOMS).
Coordinating with Service Partners

• Dell provides technical support to home and

small business customers through phone and
extensive web-based support. It outsources on-
site repairs to HSB customers to their partner
companies(such as BancTec, etc.).

• The objective of online service and support is to

reduce total costs and improve customer
satisfaction.
Dell’s G-2 architecture

•The G-2 architecture is layered, with a Web browser user

interface sitting on top of an applications layer, a message
broker, and a database

•The key to this structure is the message broker layer, which is

based on an IBM MQ series application integration system. It
serves as an information bus, linking all applications and
databases to each other.

•It also allows new data engines or applications to be added to the

system without having to make changes throughout the system.
SCM System Servers
The Old Solution
Proprietary Unix-based Servers
• Dell IT group ran its SCM database applications
on large, expensive, proprietary servers based on
the UNIX® OS. However, as the company grew,
servers lacking the necessary capacity had to be
replaced with even larger, more powerful
servers.
The New Solution
Oracle 10g RAC on Dell Power Edge Servers
• By 2005, the performance of the proprietary
system was becoming a concern, with many of
the batch processes taking a long time to
complete—the end-of-quarter batch process job,
for example, could take up to 31 hours.
The New Solution
Oracle 10g RAC on Dell Power Edge Servers
• Replaced the Sun servers with Oracle RAC 10g clusters
of Dell PowerEdge 6650 servers, each with four Intel®
Xeon® processors.

• While the previous system could not scale beyond one

physical server, the current system allows Dell IT to
easily add servers to the clusters to handle increased
work loads.
Measured Performance Improvement
SITUATION
• Founded in 1984, Dell is a premier global provider of
technology products and services. The company attributes its
success to a persistent focus on delivering the best possible
customer experience through a direct sales model. By
connecting directly with customers, Dell can best understand
their needs and provide effective solutions.

• To support its business model, Dell maintains a strong

emphasis on operational efficiency, reducing costs and passing
those savings on to customers in the form of greater value.
SITUATION CONTD.
• Although Dell is focused on minimizing costs in all areas of its
business, one area where the company continually works to “do
more with less” is in the management and support of its globally
distributed IT infrastructure, which includes approximately
100,000 Windows-based desktop and laptop computers and 13,500
Windows-based server computers.

• Of equal importance to Dell is ensuring the reliability and security

of its global IT infrastructure. Based on a “Dell on Dell” philosophy,
Dell’s IT approach calls for running virtually all areas of its business
on the company’s own products.
WHAT WAS REQUIRED?
• In the past, Dell used a number of server
monitoring products to help ensure the
availability of its mission-critical systems.
• However, none of those products could scale to
support the company’s worldwide environment,
making it difficult to centralize server monitoring.
• In addition, none of the products provided
sufficient monitoring capabilities to alert IT staff
to all possible types of system failures.
WHAT WAS REQUIRED? CONTD.
• Another capability that Dell needed was:
1. A way to quickly and efficiently deploy new software
updates—especially security-related ones—to its
thousands of Windows-based servers and computers.

2. Similarly, Dell needed a software distribution

solution that would help reduce the time and effort
associated with the deployment of new software,
allowing the company’s IT resources to focus on other
needed work.
SOLUTION

• Dell is optimizing its ability to manage its

extensive IT infrastructure with:
MICROSOFT
SYSTEM CENTRE
IT MANAGEMENT
SOLUTION

MANAGEMENT OPERATIONS
SERVER 2003 MANAGER 2005
Microsoft Systems
Management Server 2003
1. Provides Dell with a full-featured solution for the
deployment, maintenance, inventorying, and support
of both computer and server software.

2. FLEXIBILITY:
The company’s use of Systems Management Server
began in 1999 with version 2.0, with five regional
hierarchies used to support the company’s global
computer environment. In 2004, Dell upgraded to
Systems Management Server 2003, consolidating those
five regional hierarchies to a single global hierarchy.
3. Distribution of new software to all Windows-based
computers and server computers. New PCs are delivered to
users with only the Windows operating system and Microsoft
Office Professional installed, All other applications are made
available for installation on an on-demand basis through
Systems Management Server. Users simply go to a list of several
hundred advertised programs and choose what they need, and
Systems Management Server pushes those applications down to
users’ PCs.

4. UPDATES:
Dell is using Systems Management Server to deploy software
updates to both computers and server computers.
Operations Manager 2005
Dell selected Microsoft Operations Manager 2005 as the
foundation of its server monitoring infrastructure
because Operations Manager met more requirements
than any other candidate product did.

1. Scalability:
The Operations Manager infrastructure used to
monitor Dell production systems runs on only 24
server computers, yet it has the capacity to monitor
24,000 servers worldwide—close to twice its current
workload.
2. It gave support for high-availability scenarios such as agent
failover.

3. It helped in database clustering.

4. Role-specific Operations Manager management packs—such as

those that are available for Microsoft Exchange Server 2003 and
SQL Server 2005—give Dell the tools and knowledge needed to
properly monitor those applications. Each management pack
provides a set of monitoring rules with predefined thresholds, a
built-in knowledge base with troubleshooting and resolution
information, and scripts that can be used to quickly and
efficiently resolve issues.
BENEFITS of Microsoft
System Center IT
management solutions
Global Scalability:
• Dell is taking advantage of the strong
scalability provided by Microsoft System
Center solutions to meet its IT
management needs with minimal related
infrastructure.
Mission-Critical Reliability
• System Center solutions support its
direct, build-to-order business model,
enabling IT staff to immediately detect
and address any potential problems
Enhanced Security
• Uses System Center solutions for fast, efficient
deployment of security-related software updates.
• Dell also is making its environment more secure by
using its new solution to prevent users from installing
programs that are not delivered through Systems
Management Server.
Improved End-User and IT Staff Productivity
• It provides a consistent support experience regardless of
whether the user is working locally or remotely.
• With Systems Management Server, installed computer
applications can follow users as they move to a new
computer, ensuring that they always have access to the
applications needed to do their jobs.
USE OF IT IN
PRODUCTION(FACTORY) AT
DELL
FACTORY AUTOMATION
• To shape Dell IT into a more global organization
Dell performed extensive analyses of
manufacturing software and selected best-of-
breed applications for global deployment.
• One of the first areas addressed was factory
control.
• selected applications performed their specific jobs
well, but none of them were designed to directly
communicate with or control the production line
hardware.
• Unlike other manufacturers Dell, builds a high mix of
complex, customized products on a high-speed
production line.

• It relies on specialized applications to determine, in

real time, what needs to happen with a particular order.

• It needs a measure of closed-loop control, but the

business logic is too complex to reside completely
within the SCADA layer.
DEVELOPMENT OF A NEW
INTEGRATION LAYER

• Dell IT elected to standardize on CIMPLICITY and

Proficy Tracker software to build its global factory
control integration layer.
• Dell IT plans to create this layer to integrate its global
manufacturing applications with the factory line
hardware and enable an efficient, manageable
production line.
• The production line would be fully automated.
• Provide comprehensive routing and tracking
functionality for every product moving down the line.
• Dell IT built an additional layer using the
Microsoft® .NET Framework to provide a
common, simplified interface between the routing
and tracking application and other factory
systems.

• Also key to success was the inclusion of strong

program and project management functions as
well as alignment with business owners to help
ensure that expectations and timelines were met.
ADVANTAGES OF INTEGRATION LAYER
• Effective factory monitoring.
• Dell can gather many production metrics with
much greater detail and accuracy.
• It enables to monitor key metrics.
• Tracker applications interface with the
production line controllers help to report on
equipment performance & efficiency.
FACTORY VISIBILITY AND MOBILE
MANAGEMENT

• Applications at the SCADA layer focused only on a

single section of a single factory.
• Creating a new application layer and making it a
global standard was no small task.
• Dell deployed Tracker applications in a new factory
where it could comprehensively test, troubleshoot,
and refine system performance.
• It helped in ensuring high levels of stability and
availability once products began rolling down the line.
ADVANTAGES
• Because a common application layer now
connects to the factory floor from end to end,
administrators can monitor total factory output,
current throughput, and work-in-progress levels
in real time & in detail.

• This detail gives the factory operations staff

increased visibility into their operations.
AUTOMATION ENHANCEMENTS INCREASE
CONTROL AND RETURN ON INVESTMENT

• Dell has calculated that the increased operational

visibility alone could save US$3.7 million per year
at a single Dell factory.

• Dell has seen increases in overall system reliability.

• Implementing a common layer in place of a large

number of individual applications has helped
dramatically reduce the number of application-
related incidents.
• Increased control over the routing of material through the
factory.

• It has enabled several business process enhancements.

• Dell anticipates an annual ROI in excess of US$40 million

related to these ancillary projects.

• Hence Dell IT has helped significantly increase the

efficiency and manageability of the company’s
core business.
CONCLUSION
Advantages of IT in Dell
• Inventory:
Dell’s days of inventory have dropped considerably
over the last few years. Their inventory level is the
lowest in the industry.

• Manufacturing:
Dell’s production cycle time is 7 hours, on average,
while its order turnaround time is 7 days, on
average. The automation of production processes
contributes to the speeded-up cycle times.
Advantages of IT in Dell
•Cash management:
Dell has a cash conversion cycle of 8 days. This is because Dell often
receives payment from a customer on an order before it pays its suppliers
for parts used to fulfill this order.
On average, Dell converts a sales transaction into cash in less than 24
hours.
In contrast, indirect PC sellers must buy components to produce PCs,
then push the PCs into the channel and wait for payment.

•Administrative overhead:
Dell is among the most efficient firms in the industry. Dell’s SG&A
declined from 15% in 1993 to 9.8% in 1998. By contrast, over that same
time period, Gateway’s SG&A has increased from 7 to 14%, and Compaq’s
SG&A held steady around 12% until jumping to 20% in 1998.
Advantages of IT in Dell
• The highly profitable corporate (relationship)
customer market has exhibited greater growth
than the consumer (transaction) market between
1991 and 1997. Relationship customers
accounted for 59% of net sales in 1991, whereas
they accounted for 70% in 1997.
THANK YOU