DELL COMPUTERS (A)

Field Service for Corporate Clients

GROUP 7 Section A
Anmol Yadav
Antarleena Bera
Mrinal Chandra Debnath
Sharad Agarwal
Shreyasi Mahanty
Shruti Suman

Dell Computers (A): Field Service for Corporate Clients

a) Identification of the problem:
Sreeja Kapoor, Chief Technical Officer of a large corporate customer of Dell Computer, needs to make a
decision whether she should order larger server products from Dell Computers as Dell is entering into the
larger server products.
b) Analysis of the situation and the problem:

Sreeja Kapoor is responsible of buying PCs for her companys employees as well as servers

and networking equipment. Dell provides her award winning products and services at great prices.

However, as Dell is entering into larger server products, Sreeja is skeptical about buying larger
servers from Dell. Her concern was that would Dell be able to maintain the quality of service with its
philosophy of low inventory and lean production.

Options for Sreeja and Dell to provide services for Large Servers:
1. Outsource to IBM
2. Outsource the service part to DecisionOne
3. Rely on Dell Computers own servicing

Dell was established in 1984 with a strategy, aptly named as Dell Direct. It eliminated all the

intermediaries in buying process of PCs and directly interacted with customers to information and provide
the appropriate products.

It focused on low cost production and low prices and it didnt use proprietary technology to
focus more on delivering solution.

Michael Dell believes in short term goals and depends on what customers want to to provide
products and services. 90% of Dells customers are business clients.

Dell has Premium Pages, a customized service for business clients. This service makes
business clients order processing paperless and centralized. Hence, Dell is more efficient to analyze the
trend in business clients needs.

Moreover, Dell also makes onsite visits to its business clients to build relationship.

Dell has a unique call center operation style. It focuses on first time resolves-solving the
problem once and for all-even if that means talking longer with a client. Apart from this, Dell improved the
chance for solving problems online by Call center representatives(CSRs) by embedding a diagnostic
equipment into the product that helps CSRs diagnosis the problem and fix it online.

Dells field service for large servers proposed to guarantee its business customers on site
service in less than four hours, which much better compared to existing services provided by IBM and HP
for its larger server customers.

Pros and cons of expanding to new market (Large Server Market):

Pros:
1. The core competence of Dell, the sale model - Dell direct, can extend to large server segment.
2. The excellent customer relationship management will help Dell to break into the new segment.
3. The high service quality in PC field makes customers believe in Dell's new product.
4. They already have experience in outsourcing service of their previous products, thus it would be easier
for them to do the same for large servers.
Cons:
1. The Dell-direct may not succeed in large server due to different requirements. The customer of large
server has different background.
2. The Price wars are expected to take profits even lower.
3. The existed competitors are doing well in field service. Dell's strategy might not make difference to
them.
4. The way to large server is incremental. Dell has to follow customers' needs. Such needs are different
from PC market.
5. The trading and cost for an inhouse field service team are more critical for server.
c) Recommendations and Conclusions:

DecisionOne has sound technical knowledge. Hence, Dell will outsource its field service to

DecisionOne (based on advantages discussed in analysis).

Presently, Dells existing customers (i.e those having personal computers and small servers)
are being handled by outsourced services. Till now, customers have not complained about the servicing of
Dells existing products and have excellent service records as well as good customer satisfaction index
(CSI). Therefore, handling of outsourced field services wouldnt be a difficult task for Dell.

Based on financial data available and calculations, large server manufacturing and sales would
result in loss of $38m (expected). But net income ($1728m) will be more than 2000FY.

Net receivable per day ($398m) will be more than expected 2002 result or more than 2000
Result.

Loss in large server business ($38m) is negligible when compared to net income (1.75% only).
By getting into the large server market, Dell would achieve product diversification, which

would further facilitate improvement in the declining market capitalization & improve revenue for them.

Addition to outsourced field support, existing critical success factors like low cost product
logistic & CRM will provide the competitive advantage than competitors.
Hence, Kapoor should prefer the Dell large servers and maintain good ties with Dell. And Dell should
outsource servicing and maintenance of these large servers to DecisionOne.