Case Study: Dell’s contract to supply the Woolwich with hardware

Dell won a preliminary contract to supply 300 new PCs to the Woolwich, a decision based initially on low price. Then Dell...

Dell won a preliminary contract to supply 300 new PCs to the Woolwich, a decision based initially on low price. Then Dell impressed with its on-site technical support, build-to-order capability and product quality

With over 400 branches spread across the UK, the Woolwich had quite a task on its hands when it made the decision, in 1997, to overhaul its IT systems. A self-confessed "IBM Shop" for many years, the financial services company made the decision to work with a new partner that would allow it to maintain more control of the upgrade process. While using Dell's project management skills and unique "direct" method of doing business, the Woolwich was able to make huge cost savings.

The Woolwich is one of the UK's leading providers of personal financial services and products, with more than 7,000 employees and assets of £30 billion. Founded in 1847, it is today a fast-paced financial services operation working in areas such as savings, pensions and property. It went public in July 1997 and is fighting hard in a competitive market where a company stays ahead by being the first to offer the latest promotional incentives such as mortgage cashbacks, interest-rate discounts and low priced fixed rates.

The Woolwich has long been a pioneer of IT. It led the way back in 1979 by computerising its branch network. The NIMROD system used then was based on IBM4700 series terminals and represented one of the first customer-facing branch IT systems in the UK. David Benaron, director of the Woolwich with responsibility for IT, explained that technology enables the company to be agile in working with customers. "IT underpins the whole of the Woolwich's business. Everyone is dependent on IT."

Significant changes in customer needs have changed the role of IT in recent years. The rise in popularity in telephone banking services and the increasing time pressures on customers have meant that branches have become one of a range of "interfaces" between the company and its customers. But far from being superseded by telephone banking, the branch has taken on a new and critical role in differentiating the Woolwich from its competitors. Efficient, customer-focused branches provide an excellent environment to meet customer needs face-to-face.

This means that branch IT systems need to help staff serve customers a wider range of products seamlessly and very quickly. "At peak times, queuing was becoming a problem," says Peter Newton, principal technical specialist at the Woolwich and a key member of the implementation team. "We knew that if we could 'up' the performance of our branch systems, we could make the branch experience a better one for our customers."

The need for longer opening hours, in particular Saturday opening, also had serious implications for IT. "While we wanted to upgrade, we had little time to do it," Continued Newton. "Our systems in the branches are critical to the service they provide. We could not afford any business-hours downtime during the upgrade of the infrastructure."

Woolwich had used IBM hardware, software and networks as the basis of its operations for many years before it started to re-evaluate its requirements in 1995. The company has a sizeable IT department consisting of 330 people who manage everything from mainframes to WAN, PCs, applications, support and maintenance. Many of the systems used IBM technologies, with PCs and servers running the OS/2 operating system and the branch networks being based on Token Ring. The objective of the re-evaluation was to look at costs and therefore alternative PCs. Because all the IBM systems were sold via a reseller to Woolwich, the company asked the reseller how it could cut out cost from the purchasing and installation process, but did not receive a satisfactory response. "The IBM account manager traditionally only provided information on forthcoming products and when we tried to approach them on the issue of costs, we were told to talk to the reseller," says Benaron. "We therefore decided to explore the possibility of using a direct vendor where we could get more accountability."

Dell won an initial contract to supply 300 new PCs, a decision based initially on low price. As the rollout developed, the Woolwich also became impressed with Dell's on-site technical support, build-to-order capability and product quality. "This gave us the opportunity to put our toe in the water in terms of using non-IBM PCs," explains Benaron. "It also sent a clear message to IBM and its reseller."

By 1997, the Woolwich had put out to tender a series of major contracts covering 2,500 PCs for branch and regional offices and 800 branch servers. IBM could not compete on price and Dell beat Hewlett-Packard to the £5 million combined deals based on service and roll-out support. According to Newton: "One key requirement from our IT partner was its assistance to make the roll-out seamless. We also wanted help to make the branch servers manageable remotely."

Dell supplied the Woolwich with OptiPlex GS and GN PCs over a four-month period and PowerEdge 2200 and 4200 servers for the follow-up server project. Dell provided full project management assistance and designed the supply of the systems around a roll-out plan devised jointly with the Woolwich IT team. According to Newton, this plan had a number of priorities. "First, we wanted pre-configured systems that needed no additional installation routines on site, apart from data transfer. The engineers would not have time to do complex configuration in the branches because much of the roll out had to happen after 5pm in the evening once the branches closed. Second, we wanted the hardware to be delivered direct to each branch at a precise time. We didn't want to store hardware at headquarters for onward distribution and we didn't have space in the branches to store boxed systems that were waiting to be installed."

Dell provided a tailored service under its DellPlus program. Because of its direct model of operation, Dell could build the systems to Woolwich's order and then ship each individually configured system to the branch where it was to reside on the day it was to be installed. As Dell's technical project manager, Mark Smith, explained: "Because of Dell's unique direct model, we could tailor everything to the Woolwich's requirements. We had no inventory to 'shift' and we had the processes in place to feed requirements right back to the production planners. Essentially, Woolwich can get what they want on the day they need it."

Under DellPlus, each system was fully configured at Dell's factory in Ireland. The PowerEdge 4200 database servers were configured and tested as OS/2 machines so they could be merely unboxed and booted on installation before data transfer began. The PowerEdge 2200 servers, running NetWare, were data-blasted at the factory and fully configured down to individual branch code, IP addresses and other Woolwich-specific information. Likewise, the OptiPlex PCs were configured with OS/2 Warp 4.0, Token Ring network cards, as specified by the Woolwich, and the key application software required.

Dell co-ordinated this configuration process and the logistics of shipping systems to the correct destination on the correct day. For both the desktop and server rollouts, the plan called for the systems to be delivered to the branch before midday on the days of installation. These days were scheduled over a four-month period at the rate of between seven and nine rollouts per week.

Installation on site would begin at 3pm when the Woolwich engineering team would create a mini LAN during the two hours before the branch closed. By end of business, at 5pm, they confirmed that the connectivity and system units were working, after which the systems would be fully installed, data transferred to the new servers and the old IBM hardware removed. On average, the installation would be completed by midnight and Woolwich was so confident with the process that it did not provide on-site IT support at the branches on the first morning of operation. "It wasn't necessary to provide on-site support," says Newton. "Out of the first 140 branches, only one had a serious problem the next morning ( a 99 per cent plus success rate and a massive cost and time saving for the organisation."

Statistics back up Newton's claims. According to the Woolwich's post-project internal customer satisfaction survey, only seven out of 222 branches had major issues over the quality of installation ( a 96.8 per cent success rate. "While there is always space for improvement, such levels of user satisfaction are unprecedented in a branch IT installation project," continues Newton.

End users have also enthused about the performance of the new systems. Over 90 per cent of branches rated system performance improvements as "good" or "excellent". According to Newton: "Some user tasks were cut from two minutes down to 45 seconds. Because users are operating familiar software on new desktop hardware, the performance improvements have been very apparent. There has been a vast reduction in queuing in the branches which made the IT department very popular indeed."

The other Woolwich priority ( remote server management ( has been made possible by the integration of Dell PowerEdge servers with a number of manageability packages. Because IT support is not resident at the branches, Woolwich wanted to have full control of its servers remotely from its headquarters in Bexleyheath, London. The dual operating systems employed led to the integration of HP OpenView, IBM NetFinity and Novell ManageWise to provide a series of feeds into an overall management console called MAXM. For example, the three disks and the RAID 5 storage configuration on the PowerEdge 4200 servers can be managed across the WAN. All of the Dell servers provide drive failure alerts, temperature monitoring and a range of other features designed to predict and pre-empt hardware failure.

Woolwich has also chosen to configure the OS/2 PowerEdge 4200 systems with "out-of-band" management where, for example, if a system hangs, the engineer at Bexleyheath can dial the server up with a modem and diagnose the problem, even if the network is down.

From a resource perspective, Newton believes the rollout has been far more efficient than any other in the company's history. It brought project rollout time down from one year to 14 weeks, with a huge impact on IT costs. "This rollout has not even approached 50 per cent of the time and costs involved in previous installations."

The board endorses this view. According to Benaron, "With the actual rollout costing between £400,000 and £500,000, Dell's offer of people and direct delivery helped the Woolwich reduce costs considerably. Dell is one of the best third-party companies we do business with."

Geoff Marshall

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