company transformation lessons learned from one who has seen this movie!

How to build a solutions

framework It’s not about the sale…That may be heresy to some but learning

how to become a true end to end solutions provider requires a

history lesson and help from those who have been there….

‘Dell is transforming’ ‘That’s the mantra now and the transformation is

continuing with asset acquisition and the reconstitution of their Services unit.

These are all good moves and critical to Dell’s evolution from a hardware

provider, but they are not enough. Having been down this road before with

IBM, the parallels to the challenge Dell faces with the obstacles IBM had to

overcome to be where they are today are striking.

Let’s start with ‘Dell is a hardware company”. IBM was primarily a mainframe

and server company, with some modest success with client hardware. Dell has

Dell Services, built from the acquisition of Perot and integrated with legacy Dell

Services that positions them for the mid- market with aspirations for being a

player in the global enterprise space. IBM has IBM Global Services, formulated

by consolidating the various internal IT organizations throughout the company,

into one governance model and augmenting with the acquisition of PWC. That

acquisition provided the consulting arm and requisite business model change

that was the key to turning around that perception of being a ‘mainframe

company, trying to be credible in ‘Client Server Computing’. Now it’s ‘Cloud

Computing but the premise is the same.

The Sales model at Dell is largely the same that served them well to build Dell

into a very successful hardware company. IBM’s Sales people were once the

envy of the industry but when was the last time you heard that? That’s by

design, caused by a shift from “selling technology” to an ‘end to end customer

engagement process’ that takes a consultative approach to establish a trusted

business advisor relationship, as opposed to ‘that’s my sales guy’.

What exactly is

an ‘end to end

solutions

provider’?

From a technology

perspective, Dell is

getting much closer.

What’s missing is how

you are helping your

customers transform IT

from a cost center to a

valued enabler of the

business. That’s the

number one challenge

CIO’s face and although

it’s receiving a lot of

focus lately….that’s

been true for many

years.

How do you do that?

With a combination of

hardware, software and

services that together,

provide a solution

mapped to a customer

business problem. You

back them with

successful case studies,

segmented by industry

with a maniacal focus

on Analyst Relations

How to build a solutions framework

How we build a solution framework

The establishment of IBM Global Services and the subsequent shift toward a services focus, ultimately

helped keep IBM from near implosion that many industry observers have forgotten due to recent

successes. Dell is on a similar path to transform their business but one factor that was overlooked in

IBM’s turnaround until the last several years, was the decision to focus upon software as the

cornerstone of IBM’s business.

That decision was based upon the fact that although the accolades rolled in for the Services business, it

became readily apparent that the model put in place, was highly labor intensive and would soon

impact the ability to bid competitively and meet desired margins. Short term focus upon Global

Resourcing, employee reclassification and layoffs were not enough and ultimately the economy of scale

that IBM needed to remain competitive, came from integration made possible by their software

organization. Although some question exactly how much integration there really is, their marketing

efforts are masterful at conveying this to their customers and it’s apparently working.



The solution that will work for Dell is to develop software that provides an integrated IT infrastructure

(Systems Management) that produces, manages and links together an Application Portfolio that is

secure which provides timely and accurate business data. That’s a common sense description of what is

referred to as Service Oriented Architecture or any other number of industry buzzwords. Some call it

Middleware, understanding that Software is the key element.

It’s not enough to merely acquire software assets. Claiming to be ‘Open, Capable and Affordable’ are

good marketing angles, but at the end of the day, you need to own your own software stack to be

deemed a viable vendor. The objective should be a comprehensive strategy to integrate these assets to

provide BUSINESS solutions to CUSTOMER needs.

That sounds simple as a premise, how do you design and develop software that meets current needs

and positions you for future requirements? After all, you don’t want to be obsolete with the first

release! Let’s take a look at what makes up the foundation of successful software.



Software is the bits and bytes that interact on hardware, providing logic calculations that form the basis

for output processing commonly referred to as applications. Those applications formulate the rationale

for business measurement, reporting, analysis and collaboration which require various levels of

security to protect against unauthorized access. Over time, the sheer volume of data provided by the

software applications themselves must be analyzed for relevance and competitive advantage. Dell’s

Software Division is aligned by Systems Management, Applications, Security and Business Intelligence.

That’s not an accident and not once did you hear the term ‘Cloud’ or Big Data’! Yet the very foundation

behind those marketing concepts is what I just described.

Successful software must be architected to meet customer challenges with the design principles I call

the 3 E’s. They are:

1. Ease of Installation

2. Ease of Use

3. Ease of Maintenance

Software

Security

Business Intelligence

Systems Mangement

Applicaitons



Those design principles will ensure that you develop software solutions that avoid the complexity that

plagues many companies while accommodating a mobile and consumer driven client base. These

principles and the related IP will bring substance to discussions about ‘Cloud’ or ‘The Consumerization

of IT’. While very creative marketing phrases and concepts, their value is only derived from the

combination of efficient, cost effective hardware and software that has a linear mapping to a business

problem(s).

Previously we referred to this concept as a Service Oriented Architecture or SOA or Middleware as

noted earlier in this article. The premise is still the same. Integration or interconnectedness of

application data is the glue that holds together business processes and enables that transformation

from thought or objective to reality. This requires an enterprise architecture that takes a business

strategy and maps an end to end process that brings together an entities strategy, cost, and

performance and growth elements.

That is accomplished by interconnecting diverse hardware and software platforms through a common

application management architecture, that allows for interoperability and can avoid obsolescence when

technology changes. It is much easier to start with an architecture with the 3 E’s and scale up than it is

to build a complex architecture and try to scale it down for mid- market and small medium business

market segments.

Successful Software

Easy to Maintain

Easy to Use

Easy to Install



It may appear to be a tall order, many have tried and continue to try but the

technology vendor who can get past the preoccupation with technology for

technology sake, focusing upon enabling end to end business processes with a

combination of PEOPLE, PROCESS and TECHNOLOGY will emerge as the

market leader.

We’ve talked about the importance of people, process and technology and the

importance of providing an end to end solution to customer business problems,

with a combination of hardware, software and services. Easy to say, much

harder to deliver and often the very organizational model we’ve constructed,

precludes our ability to do so. Sticking with our PEOPLE, PROCESS and

TECHNOLOGY foundations, let’s discuss how changing those dynamics

enables a successful transformation.

Hardware,

Software and

Services=

People,

Process and

Technology…

To further illustrate,

have you ever sold ‘A

Cloud’ to anyone? Of

course not!

How would you do

that? You wouldn’t just

show up at your

customer meeting or

call without a process or

an organizational

support model in place

to deliver a solution to a

customer business

problem.

What you provide is a

combination of your

organizations people,

process and technology,

to address and solve a

customer pain point.

None of those elements

can solve the problem

independently.



As with any large organization, despite best efforts a silo approach will inevitably take hold

irrespective of pledges by management and establishment of what seem to be ‘best practices’. Having

been a part of that management and at least 15 product launches over the years involving multiple

divisions and organization, I can tell you first hand it will happen! There are several ways to minimize

this and induce even the largest and disparate of organizations to work together.

STEP 1: INCENT BUT DON’T PREVENT!

The largest obstacle I have seen to building a true solutions framework is individualized or segmented

compensation plans that induce your key contributors to focus upon the short term or ‘bread on the

table’, as opposed to the long term success and overall best interest of the product, service or company

goal. You may not like that…but it’s true! If I’m being held to a quota of selling blades or they put more



money in my pocket than selling an integration solution or ‘services’, most sales people will do just

that. Similarly, if I’m a Services Executive, a long term outsourcing deal will mean more to me than a

VDI deal for a 1000 employee company. And let’s not forget about the Software Executive who has

incentives to ship a product that may not be ready to go from a feature or quality standpoint, but gets

paid based upon ship date.

Clearly not all Sales, Services or Software people fall into these categories. However, if your

compensation plan is not developed with the end in mind, or was designed for individual product sale

while your strategy is to provide end to end solutions, a re-assessment is necessary.

STEP 2 THE LONGER THE CYCLE, THE GREATER THE REWARD

End to End Solutions despite the design principles we outlined previously, will by definition require

more complex go to market and customer engagement ecosystems. From the go to market perspective,

the shift will be from ‘sales plays’ and marketing generating leads to a ‘market management’ approach.

Market research, business consulting and demonstrating that you can help a CIO move their

organization from a cost center to a profit center for their company, will be your barometer for success.

How you bring your solutions to market will determine your success in transforming to a solutions

company. It will no longer be acceptable for Product Groups, Services, Marketing, and the Software

division to be able to launch products or solutions independently, which has been a past practice. You

must establish an end to end go to market process that links hardware, software and services

organizations with a market management function driving the front end. This must be supported by a

rigorous program management discipline to manage the development and sign off cycle, followed by a

consistent customer engagement process that provides a credible customer focal point, backed by a

deal closing process that is agile and responsive.

STEPS 3 DO WHAT YOU SAID YOU WOULD DO

The ability to execute is the key to establishing and sustaining an end to end solutions provider. As

we’ve outlined, the software division will be the critical element in ensuring true integrated technology

that maps to a customer pain point, as opposed to ‘integration by power point’ which many companies

practice. Your hardware must differentiate in terms of cost, efficiency and features while services must

be lean, agile and able to scale up or down depending upon market segment.

Right now, many companies have a growing portfolio of assets that map to technology segments like

applications, storage, security etc. The integration to compliment and supplement each other will

ultimately prove how successful they become. While the focus will be upon automation and enabling

efficiencies through technology, the human capital investment in terms of consulting, architecture,



project management and service delivery management skills will determine your position in the

market.

If done right, it’s a very high margin business. If done wrong, it’s a very labor intensive business which

ultimately is not sustainable.

STEP 4 CASE STUDIES…CASE STUDIES…CASE STUDIES..

One of the biggest lessons I learned at IBM was the art of obtaining case studies or customer reference

accounts as they are sometimes called. Put simply, if the customer is happy with the partnership they

have with you, more often than not they will agree to be an advocate. There are many ways of securing

this commitment which are outside the scope of this paper but focusing upon key business impacts that

you have made, generally are better received than a request for endorsement of a particular product or

service. Given that’s exactly what most company transformations are all about, that should be the key

incentive.

I can’t stress the importance of this enough. Prospective customers as well as existing customers want

to know who in their industry has done business with you and what the results were. No credible

discussion whether in the Executive Briefing Center, an industry event or presenting an RFP can be

held without quantifiable customer case studies to back your assertions. Simply talking tech won’t get

the job done anymore.

STEP 5 TALK THAT TALK IF WE CAN WALK THAT WALK

Perhaps the most crucial element in a company transformation is the industry credibility and

endorsement from the analyst community. Many organizations think they have made great strides in

obtaining that credence but their overall market share and perception from existing and most

importantly prospective customers, is not where we need to be.

Achieving leadership status in several Gartner quadrants is something to be proud of and provides a

solid foundation to build upon. Right now, the perception is that Dell has a sound strategy but the

question is still unanswered as to whether they will be able to deliver. They can point to many positive

reviews in what I call second tier industry analysts groups and some endorsements from Tier 1 groups

like Gartner, Forrester etc. Social media is both a plus and a minus, Dell does a very good job managing

the noise level and promoting the cause through that medium. Dell has analyst events, Dell World and

participates in most of the significant industry showcases but the net effect is not what it needs to be.

There is still a large hill to climb.



To achieve that impact, it will take a combination of resource allocation to

analyst relations, adaptation of the principles outlined in this whitepaper and

a maniacal focus upon crafting the reputation as a top tier player in the

solutions business. Right now, Dell is at a cross roads in this journey.

It’s really pretty simple, when the majority of your customers and prospective

customers are aware that you aren’t just a hardware company anymore; you

know the benchmark has been established to build upon. That is the number

one challenge that I see for Dell at present and they need to expand the efforts

from simply reiterating the transformation message to existing customers.

Being able to differentiate and show why Dell deserves a seat at the customer

table are intertwined in that you won’t get to the customer table without

being able to do one of two things:

1. Make a financial impact to the customer business

2. Help them solve a customer issue

It really is that simple! After all, the customer wouldn’t be in business to start

with if there weren’t a financial inducement to do so and they can’t do it

without customers. We tend to get caught up in the allure of technology,

How will

Dell know it

has arrived?

There are typically 3

questions I opened an

Executive Briefing

Center session with as I

put myself in the place

of the customer. I used

to get a smile or a

knowing nod when

doing so. Those

questions are:

1. “I didn’t know

Dell did that?”

2. “Now that I

know Dell does

that, so what?

Why are you

different than

HP, IBM, or

anyone else?”

3. “Why does Dell

deserve a seat at

my table?”

When those questions

are not prevalent in the

minds of customers or

analysts, you are there...



business jargon and the latest societal trend but keeping those two principles in mind will enable Dell

to successfully transform.

If you accept that premise and assuming you agree with the prescription outlined in this whitepaper,

your reaction may be ‘Well hasn’t Dell been doing these things?’ The short answer is yes but an

objective assessment should tell you it hasn’t been good enough. After many years of assessing the

success or failure of products, service offerings or organizational transformations, it really comes down

to 3 elements:

1. Awareness

2. Function

3. Price

While appearing simplistic on the surface, I assure you the success or failure of any product, services or

organizational transformation is tied to a failure in one or more of these phases. Awareness is much

easier these days with social media and technology, so your customer no longer practices ‘Management

by Magazine’. But they can sure use Google or access the latest analyst report! How often do they see

Dell on CIO.COM or any of the other high influence mediums?

Have you clearly communicated the central tenants of what your product, service or organization

transformation means to them and can you map it to their business problem?

Assuming you can overcome the awareness barrier; do you provide a Function that is not readily

available or differentiates from your competition? Or are you a ‘me too’ vendor? Are you providing a

compelling reason to adopt that new product, embrace Dell as a business partner or buy into the

transformation story? Can Dell compete on a functional basis with industry peers and market leaders?

Building the Software Division will go a long way toward answering that question.

Finally, Price which can mean how much your products or services cost as well as the financial effort it

would take to switch to Dell and for Dell….to complete its transformation are both central questions

that need to be answered. What is the business benefit of going with Dell? If they price products and

services at a premium with high margins up front, is there enough ‘functional differentiation to make

that strategy successful? Consequently, if priced at a discount and lower margin, will volume and

market share validate that tactic?

The cost of Dell’s transformation , enduring quarters of ‘missed expectations’ and resisting the urge to

manage ‘quarter by quarter’ at the expense of long term strategy will be the ultimate test of Dells

commitment to their strategy.



Dell is on an exciting journey and it remains to be seen how it turns out. I truly believe that by

following the guidelines outlined in this whitepaper along with the required patience and persistence,

not only this customer but many more like him will not be asking ‘Why Dell? He will know because the

results of Dells efforts have demonstrated that they have indeed become that valued business partner

their existing and prospective customers need.

DWG

David Gemuenden

Senior Manager and Technology Professional

[email protected]

mailto:[email protected]

company transformation lessons learned from one who has seen this movie!

Documents

services business

legacy dell services

services focus

services unit

challenge dell faces

obstacles ibm

successful hardware

hardware provider