The global chief information officer at the technology giant talks to Computer Weekly about the firm's internal...
IT revamp and the financial and people management challenges faced along the way.
Dell chief information officer (CIO) Robin Johnson faces the daunting task of finishing a major IT revamp across the global operations at the tech giant over the next few months, but he remains unabated.
With accountability for IT worldwide since 2008, Johnson needs to drive effective change management to fend off competition and, like most CIOs at major technology vendors like to proclaim, "eat our own dog food".
The IT project agenda at Dell strives to follow and support the company's business strategy. One of the world's largest computer makers, Dell gets more than half its sales from desktop and notebook computers, but it is looking to boost its corporate offering in areas such as equipment and services.
In order to achieve the goal of agility and efficiency across all business areas, Johnson is driving a complete transformation in technology, which is said to have delivered noticeable results so far while shaving off a considerable chunk of the company's IT budget of more than £1bn.
Moving to a leaner set-up
The main area of focus for Johnson in 2011 is a programme dubbed Rationalise the Core (RTC), now moving to its third and final year with the aim of reducing Dell's portfolio of hundreds of applications. Some projects are "a bit behind," but the the plan is 85% on track, so it should take an additional six months to complete.
According to the CIO, RTC is about introducing scalable, single global-instance applications to drive internal efficiency. Virtualisation is a key part of it: utilisation of Dell's server farm has nearly doubled with more room for kit, whereas three years ago the sites were nearly running out of space.
Many of the firm's regional, bespoke systems covering areas such as parts inventory, factories and supply chain, are now being replaced by many Oracle modules as well as SAP. Microsoft is another key software supplier.
"We don't think about RTC just as applications work: as we change applications, we also take the opportunity to platform them on the very latest architecture, the latest servers and storage," said Johnson.
"We have driven huge efficiency by using that approach. Not only we reduced application count worldwide, but we upgraded applications and that has taken IT cost out whilst delivering a better answer for the business," he said.
"In the last couple of years, we have gone from 70% custom-built software to 70% package - and I think that is a big shift."
Another ongoing project is the revamp of Dell's online platform, which includes channels for different client profiles, from consumers to resellers. According to Johnson, all the online offerings are being re-platformed, including resources such as e-support and mobile tools where appropriate, as well as social media.
"The ability to share information across communities of interest online by using various aspects of social media, simplify the shopping experience online and tailor customer experience to buying patterns, is a big part of the story here," said Johnson.
The services division is also undergoing IT-enabled change and the CIO's remit also includes a 'reinvention' of the technology supporting Dell's supply chain, which looks at issues such as how to deliver software to clients electronically.
Doing business with 'the business'
According to Johnson, the first year of RTC took $160m out of the firm's IT spend. The "handshake deal" was to return 50% of any savings back to the development budget and the rest of it would go to the business bottom-line.
The agreement took place just before the recession, and even though the economic scenario radically changed soon after, Johnson said some $60m were channelled back to IT and the rest to the bottom-line, so broadly 'the business' stuck to the deal.
"When we started making a financial difference, lots of ideas of how to spend the money started coming through - they were all very good ideas, but we turned all of them down and took the money back to the business," said Johnson.
"Because we gave the money back to the business in a clear and transparent manner and gave them the option to invest [in IT], the business stuck to the bargain in return in a year when the economy fell apart, so I have full respect for them," he added.
As well as focusing on the three or four main money-saving exercises that would generate big savings as opposed to multiple projects, Johnson added that another win was the introduction of a relatively simple charge on usage model for the various business units, which helped align goals in terms of IT spend.
"We are generating huge savings to the business and they are getting better applications deployed on a global basis, so even though the implementations have at times been painful, it is still a big programme, with big results."
Dealing with consummerisation
Dell is a strong proponent of technologies such as social media: this can be seen in initiatives such as its consumer community Idea Storm and the large-scale roll-out of Salesforce.com's collaboration tool Chatter.
The firm is also a keen adopter of unified communications - Dell does not deploy desk phones anymore - and a flexible working policy was introduced for global tech operations some time ago. Extensive work is also taking place around Android phones to allow staff to connect to its applications from consumer devices.
But it hasn't always been that way. According to Johnson, Dell faced its own consummerisation dilemma three to four years ago - just as in many large organisations, most people got a standard enterprise PC.
"All of sudden, our sales representatives who were selling high-range XPS [laptops] to retailers like Dixons didn't want to come in with their standard machines - they wanted [the consumer devices] as well," said Johnson.
"The key point was to decided how do you allow all your individual business units to select their own technology, according to their roles within the workforce and group," he added.
According to Johnson, today enterprise people at Dell can be seen using enterprise machines, while customer-facing staff will be using consumer kit. The same approach was applied to the application side: even though there were good bespoke applications, they were not aligned to the standardisation goal.
"It is about focusing your intellectual property (IP) in the right areas, instead of just using IP for IP's sake."
Would the CIO care to offer some advice to fellow IT decision-makers currently stressing over the ever-growing consummerisation trend?
"I'm not sure we figured it all out - IT is changing really fast and there is still a ton of things we want to do, but something key we have done here was providing a cost model to business leaders and allowing them to have choices," said Johnson.
"I want to control the image on the PC because that is related to a lot of my cost base and integration issues - and as a major credit card processor, security of our data and robustness of the IT estate is still paramount. But do I care about the device you use to access the systems? Not really."
The IT transformation at Dell naturally prompted a shift in terms of working practices and even though this has progressed positively, people and change management have been some the most testing aspects of Johnson's job.
Some 70% of Dell's 6,000-strong workforce is based outside Western Europe and US, something the company considers "right and appropriate" and no further restructuring is on the cards. According to the IT boss, the technology workforce dealt with the switch from bespoke to packages "very easily".
"The biggest issue has been around pride of ownership: if you developed something and put a lot of work into it, it is hard to say that we have these four methods of entering an order and now we need to switch to a single one," said Johnson.
"It has been less around IT knowledge and more about explaining why continuous improvement and the cost base of IT matter, explaining that innovation is not about managing your tool world, but coming up with the best possible alternative to Dell, and that everything has its lifespan and it may be time for a change," he said.
"They are a very good workforce - we haven't found it true that you need to change the skills of the people to do something like this, they gravitated towards the goal and the results have been supremely impressive."
However, just as many of his peers, the acid test for Johnson is finishing the IT transformation he has started and ensuring continuity of the new approach to technology introduced under the programme.
"It is always hard to finish: there is always that additional thing you can do, one more feature or request, but you have to finish. As you do that, you bring in a slightly different ethos as you move towards packages," said Johnson.
"We started this programme before the recession, which kind of pressurised it; efficiency is a very popular topic in a downturn, but we are doing very well and we are seeing growth return to the market-place," he said.
"[Growth] gets a lot of people focused on what's new, rather than cleaning up. We are doing a lot of what's new, but we need to keep the business attention to programmes and that the disciplines we established are maintained -that will be the challenge for the next couple of years. "