PROFIT: What do you mean when you talk about “
rationalizing the core?”
JOHNSON: “Rationalize the core” is our big IT strategy
around really globalizing on best-of-breed applications. It
was about the ability to make an IT change once and have it
Before, Dell was organized by regions. We grew very quickly,
and one of the big aspects of growth was geographic expansion.
The fastest way for IT to support that kind of growth is to copy
code, create an instance, and off you go—you’re in business
in a new country. The regions
understood their geographies,
which was good and noble, and
they would tune things for their
geographies. And that worked
fabulously for us.
Well, over time those
systems got tuned 100 different
ways. As the company grew,
this approach started to inflate
our costs. At one point, there
were actually five dell.coms,
one for each region.
Then you have to start spending money to make the customer experience similar across all five platforms. And then
along comes something like PCI [Payment Card Industry]
compliance, and you have to go apply changes five different
times. Well, we don’t need five; we need one.
As customers have globalized, their requirements have
globalized. Look at the time it took to deliver a feature in
dell.com three years ago; we would’ve rolled out in the U.S. for
a month or so, in western Europe for a month or so, and then
probably would have rolled out into the rest of Europe over the
following three-month period. By then, we’d be working on
something new. Now that code hits the entire world in dell.com
land—there are 130 countries—simultaneously. That’s a huge
The “rationalize the core” program was aligned with Dell
transforming into a solutions company. It did save us a lot of
money, and that was great, especially through the recession, but
it was really about agility and transforming Dell.
Oracle is a big part of that program. Oracle executives did
their own rationalized core a few years back, and we studied
that and learned a lot of lessons. I’ve spoken to a number of
Oracle execs about it, and that informed our approach. We’re
a big company with a lot of diverse needs. So we tend to look
for vendors who’ve got a broad range of products where they’ve
already done a lot of the integration between those products.
That approach tends to work well in a large corporation like Dell.
“At the end of the day there’s a
business strategy, and my job
is to use technology to enable
that strategy. . . . I think that’s
AARON LAZENBY is the editor in chief of Profit.
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