戴尔利用CRM-SCM集成称霸PC

CommunicationsoftheIIMA

Volume6

Issue3

Article9

2006

Dell'sUseofCRM-SCMIntegrationtoDominatethePCMarket

SharonKlinker

BlinnCollege

RonaldTerrell

IKONOfficeSolutions

AhmedY.Mahfouz

PrairieViewA&MUniversity

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ManagementInformationSystemsCommons

RecommendedCitation

Klinker,Sharon;Terrell,Ronald;andMahfouz,AhmedY.(2006)"Dell'sUseofCRM-SCMIntegrationtoDominatethePCMarket,"CommunicationsoftheIIMA:Vol.6:Iss.3,Article9.

DOI:

/10.58729/1941-6687.1328

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/ciima/vol6/iss3/9

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CommunicationsoftheIIMA

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2006Volume6Issue3

Dell'sUseofCRM-SCMIntegrationToDominatethePCMarket Klinker,Terrel

Dell'sUseofCRM-SCMIntegrationtoDominatethePCMarket

SharonKlinkerAccountingDepartment,

BlinnCollege,902CollegeAvenue,Brenham,TX77833

RonaldTerrell

IKONOfficeSolutions,810GearsRoad-BldgC#10187,Houston,Texas77067

AhmedY.Mahfouz

PrairieViewA&MUniversity,1501HarveyRd#526,CollegeStation,TX77840

ABSTRACT

Dellisone矿themostsuccessfulandprofitablecomputercorporationsinhislo吓．Ithasbeenknownforitsinnovativecustomerserviceandproductcustomconfiguration.Asitcontinuestogrow,itisfacedwiththechallengeofhowtomaintainitscustomerrelationshipsandinventorymanagement,whilecontinuingtomeetthedemandsandrequirementsofitscustomers.ThispaperwillexaminehowDellimplementsenterprise-widecomputingsoji彻are,whichprofilesandtargetsitscustomers,aswellas

s/reamlinestheflowofitsproductsthroughoutthesupplychain.Dell'scollaborationwithother

computersoftwarecompanieshasallowedittobecomealeaderincustomerrelationshipmanagement(CRM)andsupply-chainmanagement(SCM).Theseinitiativeshaveresultedinnetrevenuesofbetween

$30and$60millionoverthelastjiveyears.

INTRODUCTION

Thecomputerindustryencompassescomputersoftware,computerhardware,aswellastheproductionofcomputercomponems,assembly,logisticsdistribution,sales,marketing,andtheprovisionofinformationtechnologyservices.Dellisinthebusinessofmanufacturingcomputersandservers.ItscompetitorsareHewlettPackard/Compaq,IBM,Apple,anc.Gateway.

ThenewtrendinthecomputerindustryistobecomeavirtualcorporationandDellisleadingtheway.AccordingtoDedrickandKraemer(2006),Dellis"aimingtocombinethecostadvantagesofhorizontalspecializationwithclosecoordinationofverticalintegration".It1theearlyl990's,Dellshiftedgearsandtriedtodistributeitsproductsthroughre·tailoutlets,laterrealizinghowunprofitablethisapproachwas.Itdecidedtofocusonimprovingcustomerserviceandsupportbyallowingcustomerstoplaceandcustomconfigureordersdirectly.Thisresultedinarmiquestrategy,synonymouswithDell,customization.Nearlyoneoutoffivestandards-basedcomputersystemssoldintheworldtodayisaDell.

Dellhasonesimpleconcept:tosellcomputersystemsdirectlytocustomers.Dell'scustomersareglobalwideandrangefroBindividuals,smallbusinesses,largebusinesses,andinstitutionalorganizations,suchasschoolsand加spitals.ThemissionstatementforDellis"tobethemostsuccessfulcomputercompanyintheworldatdeliveringthebestci:stomerexperience"(htttp:\\

).SinceDellisaglobalwidecompany,its"dire1;tapproachisrelevantac:rossproductlines,regionsandcustomersegments"(

).

WhenMichaelDellstartedDellin1984,itwasoutofhisdorm-room.Hehadlimitedcashandpurchasedmostofthesuppliesneededtobuildhisfirstcomputersafterthesalesweremade.Well-establishedcomputermanufacturerslikeIBMhadalockonthecomputermarket,wherecustomerspreferredtopurchaseproductsfromretailoutlets.Thisnewideaof"building-to-order"andorderingoverthephonewasamajorrisk.Thcfirstobstaclewastocreateaneedonpartofthecustomertodesirethepurchaseofacustomizedcomputer.Thesecondhurdlewashavingcistomerscallatollfreenumbertoordertheproduct.Dellhadtofindawaytoovercometheseobstaclesandthenprovideaserviccthatwouldbuildareputationforsuperiorbusinesstoconsumerefficiency.Facingthesec:iallenges,Dellhadtoanswerthefollowingquestions:

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2006Volume6Issue3

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Dell'sUseofCRM-SCMIntegrationToDominatethePCMarket Klinker,Terrell&Ma'!fouz

HowcanDellmaintainitscustomerrelationshipmanagement,andwhattechnologywillitneedtoimplementtoaccomplishthisgoal?

HowcanDellstreamlineitssupplychaintofurthercnhanceplanningandexecution,reducinginventory

levelswhilestillmeetingcustomerdemands?

IMPLEMENTATIONOFACRM-SCMSTRATEGY

Customerrelationshipmanagement(CRM)isusedtodefinetheprocessofcreatingandmaintainingrelationshipswithbusinesscustomersorconsumers(Moon,2003).Along-termrelationshipwiththecustomerinsuresthe订rcpeatbusiness.Itcostsmoremoneytogainnewcustomersthanitdoestoretaincurrentones.Dell'sgoalistoprovidecustomerswiththeirtechnological,aswellascustomerserviceneeds.TherearethreetypesofsoftwarethatfacilitateDell'sCRM:marketingautomationsoftware;customdesignedWebpagescontainingpurchasedata;andasystemthatbenefitsthesales,marketing,financialandmanagementsegmentsofDell.

BeforeDell'sconceptofbuildingmade-to-ordercomputers,peoplewenttoanelectronicorretailstoretobuycomputers.Therewasnointeractionwiththemanufacturer,onlywiththesalespersonofthatparticularstore.Thesesalespeoplewerenotasknowledgeableabouttheproductsincetheywerenotinvolvedinbuildingthecomputers.DellpioneeredtheconceptofinteractingwiththecustomerbyphoneorbywayoftheInternettocustom-buildacomputerspecifictothatcustomer'sneedsanddeliveringthatcomputerinaverytimelymatter.Dellcreatedasupplychainmanagement(SCM)systemthatensuredthattherightcomputerpartswerealwaysavailablewhenandwhereneeded.

SCMisthetermusedtodescribethemanagementoftheflow,ofrawmaterialstothecndproduct,whichacompanyusestogetproductsandservicestoitscustomers.Dellhasdevelopedastrongrelationshipwithbothitssupplicrsandcustomersthatallowittoensurethatcomputercomponentsareavailablefromsupplierstomeetcustomerdemands.Italsoensuredthatasystemwasinplacetogettheproductshippedanddeliveredtothecustomereffectivelyandefficiently.ThisdirectcustomerfocusresultedinDell'scompetitiveadvantage.

Dellutilizesdatabasesoftware,whichiseffectiveandefficientwithcustomerrelationshipmanagement.Theseparticulardatabasesstoretablesofdatathatcanbeminedforinformationaboutclientsandusedtogeneratepromotionalcampaigns.Thedatabaseswouldincludecustomerinformation,theirinterests,andproducts.Thecustomerdatabasehelpsincreaseprofitsbecausethedatabasecontainsclientinformationthathelpsdetermineeffectiveandefficientwaystotargetandsegmentthecustomers.

Dell'sbusinessstrategyfocusesoncreatingoneofthemosteffectivesupplychainmanagementsystemsviathei2,whichwouldstreamlinethesupplychainprocessbylinkingDell'ssuppliersandplannerstogcthertomeetdemandandcustomerrequirements.ThesoftwarethatDellusestoincreaserelationshipmarketingismadebyHotlink.Hotlinkisamarketingautomationsof'twareprogramusedtoaide-marketersin"effectivetargeting,efficientmarketingcommunications,andreal-timemonitoringofcustomerandmarkettrends"(Moon,2003)Thisprogramstrengthensthesales-customerrelationship.ThisalsogivesDellfreeadvertising-wordofmouth.ThebottomlinetoCRMsystemsisthatitdirectlyimpactsitscustomerbase,ensuringthatbetterserviceisoffered.

AsecondtypeofsoftwarethatDellusesisatransparentonlinesystemcalled"PremierPages,"whicharecustom­designedWebpagescontainingpurchasedata.Thissystemalsohasapaperlessorderingprocess,withthecustomer'sexistingtechnologyconfigurationsalreadycaptured.DellstatesthattheideabehindPremierPageswasto"gainlessinformationaboutcustomers-theyalreadyknowaboutthem-andmoretocreatearealwin-winsituation"(Levey,1999)TheprocessofknowingthecustomerbeginswhenthecustomerordersaPC.ThePCisbuiltafterthecustomerordersit.ThismeansthatDellhastohaveadirectrelationshipwiththecustomer.

ThefinalsystemthatDellisusingtomaximizeCRMistheDellSouthAfrica'simplementationofanenhancedCRMsystemwiththehelpofISPartners,aninformationsystemscompany."ProClarityoffersin-depthanalyticalabilities,resultinginpositiveandnegativeareasofbusinessbeingclearlyhighlighted.Salesarealsobrokendownbyregion,withanoverviewofeachsalesteam,enablingDelltomeasuretrendsandsuccesses"

(http://www.itweb.co.za

).Sales,marketing,financialandmanagementseginentsbenefitsignificantlyfromthissoftware.TheDellstaffhaseasyaccesstothedetaileddemographicinformationaboutcustomers,customersaleshistoryandtraderelationships.Salesmanagementcantrackactivitywithinaccounts,andlapsedquotescanbeactedon.Themarketingdepartmentcantrackcustomeractivity,productsales,andmarketingmixes.

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Dell'sUseofCR-SCMIntegr!':_tionToDominatethePCMarket Klinker,Terrei,l&Ma/1JOllZ

Ir.addition,Delldeployedthee-Businesssoftwarei2SupplyChainPlanner,i2CollaborationPlanner,andi2FactoryPlannertomeetitsupplychainneeds.Thisnewi2technologywasusedtocoordinatethebuild-to-orderprocesses什omorderplacementtocustomersupport.ByusingthesoftwareDellisabletoprofilecustomers,targetthemusingtheirmediumofpreference,andalsomeasuretheresults.Dellintegratedthesupplyanddemandsideofthebusinessbyusinguniquesoftwarethatwouldeliminateinventoryoverages.Thei2systemenablesDelltopullmaterialintoitsfactorieseverytwohoursbasedonrealtimecustomerorders.Thissystemtracksbacklognumbers,stockstatus,andsuppliercommitments.Itletsthesupplierknowwhatpartstodelivertowhichfactoriesandbeassembledtomeetcustomerdemand.

ByhavinganefficientCRMsystem,DellisnotonlyrankedNo.28byFortune500,theyhaveapersistentfocusondeliveringthebestpossiblecustomerexperience."Dellintroducesthelatestrelevanttechnologymuchmorequicklytl:ancompanieswithslow-moving,indirectdistributionchannels,turningoverinventoryeveryfourdaysonaverage”(h

ttp.I/

)Theoutcomeofthencw5upp.lychaintcchnologyresultedm3ell'slowestirventorylevelsintheindustry.Real-timeschedulingandjust-in-timeinventoryresultsinefficintinventoryti:moversanddeliveries.

CONCLUSION

CRM-SCMintegrationstrivestosatisfyandpromptlydeliverproductstocustomers,ensuringavailabilityoftheproductandmaintainingprofitabilityofthemanufacturer.TherearemanylessonslearnedfromDell"sexperience.Theselessonscanbetransferredtoothercompaniesintheindustry.

Ensurebettercustomerserviceis(Jjfered.

Dellhasbecomeanindustryleaderinserviceandreliability.DellhasusedCRMtoitsadvantage.Thishasinstilledtrustintotheircustomers.Bycustom-buildingacomputerthatthecustomerdesires,thishascreatedaverystrong氏lationshipwiththecustomers.

ImplementtechnologJJinaphasedfashion

Delltested.keytasksineachofitsregionspriortodeployment.Itset-upmockenvironmentstodcvclop,test,andsupportthei2systemsinpatcheswithoutdisruptingtheliveversion.Dellwasabletobringononepieceofthei2systematatime.Asonepartbecamemoreefficient,thenDelladdedothereomponentsinstages.Dellensuredthateachstageoftheprocessperformedwillandallowedforfuturegrowthbeforerollingouttheentiresystem.Thisminimizedtherisk,whileatthesametimeincreasingeffieiency.

Extendtheconnectionfromthecustomertothesupplier

Dellwasabletoextenditsbuild-to-ordermodelfromsupplierstothecustomerwhilecontinuingtomaximizeO:Jerationalefficiencyandcustomersatisfaction.CustomerswereabletosavemoneywhilebeingabletopurchaseacustomizedmachinebecauseDellpassedonthesavings,whichresultedfromefficientinventorymanagement,noe飞cessinventoryorinventoryshortages.Itwasabletoshare,inreal-time,informationwithsuppliersaboutcustomerdemandsandbuyingpatterns.

REFERENCES

Dedrick,J