Profit Magazine - August 2011

That means you think about things a little differently and turn that ethos into an operating vision.

If you come to Dell IT, we talk
about two things: we talk about stuff
we already have, and the stuff that
we’re building. The stuff you already
have—be that an application or a
piece of infrastructure—you have to
run it more efficiently, run it better, run it faster. That’s how
you help the P&L. You try forever to tune that up and make
it better year over year. Then we invest the savings back into
projects and try to pick the best projects—but the best proj-
ects as defined by, “What’s the return to Dell?”
So we don’t say, “We wrote this application five years ago,
therefore it’s just in the running cost of the company.” We are
forever reexamining what we’ve done in the past, trying to
make it more cost-effective or eliminate inefficiencies, and then
take those savings and spend more on developing the new Dell.
That’s the mantra, if you will.
PROFIT: Do you think that perspective is unique?
JOHNSON: I think it’s happening more, but I still think there’s
a long way to go on that journey. If you think of the evolution
of IT over 20 years, it used to be back-office processes like
financials, bills of materials, requirements, and planning. Well,
if you look at IT now, not a Dell salesperson goes into the field
without looking at our CRM [customer relationship manage-
ment] system.

Technology is so pervasive throughout the business; the processes couldn’t run without technology. So I think aligned with that, IT has changed from the guys who run the back office into a key enabler of business efficiency.

You see studies about productivity increase; a lot of that’s related to technology. Therefore, I think the role becomes far less about the technology itself. But it becomes far more about how you use those technologies to create business value. PROFIT: Does taking that approach make it harder to build support for IT initiatives? JOHNSON: We sit with the business and go through the strategies and point out where we think technology can enable and where it can’t enable. But at the end of the day there’s a business strategy, and my job is to use technology to enable that strategy. So it’s their money and their roadmap, and I think that’s massively important.

Now, we do have a responsibility to make sure we’re
maximizing the return across the portfolio. In other words,
“Hey, I know you like your project; there’s a better project
over here.” And we do have a responsibility to say, “That will
never work.”
But I think the key thing is, it’s not about me pushing my
initiatives; it’s about me aligning a technology strategy to those
business strategies.
PROFIT: How has Dell’s business evolved significantly during
this period, and what role has IT played in that change?

JOHNSON: I think it’s broadly accepted today, unlike 10 to 15 years ago, that almost any business idea involves technology. That for me is one of the most fascinating things about IT as a career.

It’s hard—I’m expected to know
every segment of Dell’s business
strategy and to have an opinion and
weigh in. If you work in supply
chain, you’re expected to know
supply chain. If you work in sales, you’re expected to know
sales. If you work in IT, you’re expected to know both, and
understand the interrelationship between the two, so that the
systems will work.

So IT is a wonderful place to look at how the business actually operates, because you see all of those interdependen-cies. You’re seeing the actual process interaction between departments. I’ll give you a real example. If you go back to 10 years ago, Dell was famous for online sales. Customers could enter standard configurations and then purchase electronically from Dell. We take orders, you save money—it’s a very easy transaction.

Now that kind of transaction is a given, and large companies use global portals to buy anywhere, for anywhere in the world, to be invoiced anywhere else. This sort of evolution, the sophistication of what you can do and the different communities that form around these transactions—it’s just incredible. And it’s nonstop, and your challenge as an IT executive is to keep up. PROFIT: How has that evolution paralleled the evolution of Dell’s business? JOHNSON: If you go back in time, “configure your own machine”—which we still have today—was very unique. In effect what we said is, “We’ll extract you from understanding whether this card works with that processor, works with that disk, works on that board, and fits into that case, and we’ll give you a very simple, easy-to-use, responsive online tool for you to configure your own machine.” That technology is probably the most tuned piece of code in Dell today. It’s going through a real manufacturing bill of materials, validating the configuration in real time with subsecond screen response, and abstracting the customer from that entire technical conversation.

We start from the mindset of that online configuration. So why don’t we take the things we do that differentiated us and that we’re very, very good at to create a different value proposition for our customers and apply that to services?

So we’re not playing the solutions game the same way as everybody else. We’re really bringing the latest technology, the latest thinking, to create a different cost position—and therefore a different value proposition for our customers in exactly the same way we did for configuring PCs. Everyone else wants to send you a person and charge you for their time. We start both within the business and IT with that different perspective, because we don’t have the same legacy.