CUSTOMER RELATIONSHIP MANAGEMENT Case Study: Dell Inc.

Under the guidance of Prof. Dhruv Nath

By: Group 4 Amitrajit Sett(09P126) Debashish Jena(09P134) Hitesh Kyal(09P141) Rahul Jain(09P162) Jasmeet Singh(09P199) Jutta Matikainen Lasse PGPM 2009-11

THE COMPANY: DELL Inc. The computer industry encompasses computer software, computer hardware, as well as the production of computer components, assembly, logistics distribution, sales, marketing, and the provision of information technology services. Dell is in the business of manufacturing computers and servers. However Dell is leading the way with a new trend in the computer industry to become a virtual corporation. It has continued to shape the industry by breaking new ground and pioneering critical developments in home, small business and enterprise computing. Dell's research and development (R&D) efforts now span the globe, driven by some of the industry's foremost product designers and engineers. At the core of Dell's innovation approach, however, remains an unwavering commitment to deliver new and better solutions that directly address customer needs. Before Dell, well-established computer manufacturers like IBM had a lock on the computer market, where customers preferred to purchase products from retail outlets. There was no interaction with the manufacturer, only with the salesperson of that particular store. These salespeople were not as knowledgeable about the product since they were not involved in building the computers. When Dell came, it tried out the same thing but later on realized, how unprofitable the step was. Thereafter, it changed the business strategy to sell directly to customers. Now Dells customers are global wide and range from individuals, small businesses, large businesses, and institutional organizations, such as schools and hospitals. However this new idea of building-to-order and ordering over the phone was a major risk. The first obstacle was to create a need on part of the customer to desire the purchase of a customized computer. The second hurdle was having customers call a toll free number to order the product. These two obstacles were handled by the implementation of the CRM-SCM strategy by Dell.

Dell

CRM

ACTIVITIES

Customer Relationship Management is a business process that an organization undertakes so as to effectively manage a steady flow of profitable customers. CRM can enable organizations to acquire new customers enhance the level of customer service retain profitable customers

The business model has to shift from short term transaction based to a long term relationship based leading to enhanced performance for the organization with the intent of developing and maintaining partnerships. Dell realized that, due to cost advantage of retaining a customer than to search for new customers, it was extremely important for Dell to establish long-term relationship with the new customers. There are three types of software that facilitate Dells CRM to achieve this objective. They are 1. Marketing automation software 2. Custom designed Web pages containing purchase data and 3. A system that benefits the management segments of Dell. sales, marketing, financial and

Dell adopted the Sales Force CRM model on the Force.com platform. It managed the user training program by contracting delivery to a select group of companies who had worked closely with it in the past. Dell leverages Salesforce.com support for 24x7 technical support which is the companys first point of technical contact for supporting its complex implementation. Workflow and analytics enable users and executives to easily generate reports to quickly identify, track, and manage key evaluations in real time.

The company further launched Dell IdeaStormbuilt with Salesforce CRM ideas to give customers and enthusiasts a chance to walk the halls of Dell and share ideas that influence product development, services, and operations. Within the first week, Dell IdeaStorm had collected more than 500 ideas; by the first month it had collected 2,500 ideas. The ideas allow the company to identify pain-points and hone in on areas that need improvement and enhancement. Customer feedback on led the company to build select consumer notebooks and desktops pre-installed with the Linux platform. Dell also decided to continue offering Windows XP as a preinstalled operating system option in response to customer requests. Dell leverages the wisdom of crowds to evaluate and prioritize customer feedback. Dell customers and enthusiasts have a chance to be a part of the product development processto tell the company what they want to see in future releases. It engages employees at every level to comment on their area of expertise and to participate in the discussion.

Employee Storm is a secure community that allows employees to post ideas regardless of where they sit within the company; in the first two weeks of launching it had gathered more than 700 ideas. It breaks down the silos natural in corporate life and increases collaboration allowing, for example, tech support employees in Asia to communicate and share ideas with sales reps in Round Rock, Texas.

Dell is experiencing more than a thousand partner registrations a month via Salesforce CRM Partners. Over hundreds of millions of dollards in deals submitted by partners have been approved and serviced. Dells partner community also recommends the use of such a CRM system. Dell leveraged Force.com to map its business process and build an application for tracking technology partnerships. The application allows a team of technology evaluators to track, manage, and report on evaluations. Now, venture capital firms can submit new evaluation submissions via a simple email form.

Launch of SaaS Dell has moved in the SaaS space as well. It recently launched its portfolio of Software-as-a-Service (SaaS) applications for large enterprises, small and

medium businesses, the public sector and channel in the Asia Pacific region. Dells SaaS applications provide customers with cloud-based applications that help simplify and automate IT management and reduce overall IT costs.

Marketing Automation Software

1. Dell has developed a strong relationship with both its suppliers and

customers that allow it to ensure that computer components are available from suppliers to meet customer demands. It also ensured that a system was in place to get the product shipped and delivered to the customer effectively and efficiently. This direct customer focus resulted in Dells competitive advantage.

2. Dell utilizes database software, which is effective and efficient with

customer relationship management. These particular databases store tables of data that can be mined for information about clients and used to generate promotional campaigns. The databases would include customer information, their interests, and products. The customer database helps increase profits because the database contains client information that helps determine effective and efficient ways to target and segment the customers.

3. Dells business strategy focuses on creating one of the most effective

supply chain management systems via the i2, which would streamline the supply chain process by linking Dells suppliers and planners together to meet demand and customer requirements. Hotlink, the software that Dell uses to increase relationship marketing is a marketing automation software program used to aid e-marketers in effective targeting, efficient marketing communications, and realtime monitoring of customer and market trends. This program strengthens the sales-customer relationship. This also gives Dell free advertising word of mouth. The bottom line to CRM systems is that it directly impacts its customer base, ensuring that better service is offered.

Custom designed Web pages containing purchase data Dell uses is a transparent online system called Premier Pages which are custom-designed Web pages containing purchase data. This system also has a paperless ordering process, with the customers existing technology configurations already captured. Dell states that the idea behind Premier Pages was to gain less information about customers they already know about them and more to create a real win-win situation. The process of knowing the customer begins when the customer orders a PC. The PC is built after the customer orders it.

A system that benefits the management segments of Dell

sales,

marketing,

financial

and

The final system that Dell is using to maximize CRM is ProClarity, which offers in-depth analytical abilities, resulting in positive and negative areas of business being clearly highlighted. Sales are also broken down by region, with an overview of each sales team, enabling Dell to measure trends and successes. Sales, marketing, financial and management segments benefit significantly from this software. The Dell staff has easy access to the detailed demographic information about customers, customer sales history and trade relationships. Sales management can track activity within accounts, and lapsed quotes can be acted on. The marketing department can track customer activity, product sales, and marketing mixes. Dell deployed the e-Business software i2 Supply Chain Planner, i2 Collaboration Planner, and i2 Factory Planner to meet it supply chain needs. This new i2 technology was used to coordinate the build-to-order processes from order placement to customer support. By using the software Dell is able to profile customers, target them using their medium of preference, and also measure the results. The i2 system enables Dell to pull material into its factories every two hours based on real time customer orders. This system tracks backlog numbers, stock status, and supplier commitments. It lets the supplier know what parts to deliver to which factories and be assembled to meet customer demand.

At Dell, many innovations begin in-house, led by a global team of top engineers, product designers and technical experts. Others begin as a team effort with Dell's strategic partners. Its mission is to deliver innovative and cost-effective solutions that meet today's real-life customer challenges and work seamlessly in existing environments and with other products.

PROPOSED

ACTIVITIES

Companies across the board are recognizing the value of effective CRM system and implementing it thus so. The competitive advantage is thus decreasing with the passage of time. The company has to identify new drivers of CRM for the future and implement systems accordingly. The drivers of a CRM system in the future will be:
1. Mobile Services: With the explosion of mobile phone usage, the

platform has the potential to become a key weapon in the CRM arsenal. Mobile Phones have become ubiquitous and prove to be a significant means of information exchange.

2. The Internet: A medium which influences customers significantly. The

Company can leverage Internets power to enhance communications. A novel development is the emergence of social media which can be used advantageously.

Mobile Services

With significant efficiency in information management, the company can use CRM application on mobile phones for a more effective engagement with the customer. The company can determine specific traits characteristic of the customer and employ them to ensure timely and accurate flow of information from the customers and to the customers. The trick lies in empowering the channel that, with the knowledge of use of the mobile phone by customers can enrich the customer profile and provide a better service, the next time.

The Internet| Social Media Social Media is a technique to transform the media monologue to social media dialogue using the technology of Internet. It provides a heightened level of interaction among customers where they can

Research companies online and ask for recommendations from peers Share frank opinions and experiences on companies, products and services Affect others attitudes and expectations about companies, products, services, and brands

The company can make use of this phenomenon in the following ways:

Gain access to conversations and take part in the dialogue Determine and enter communities suited to them and relationships Monitor social networks for mentions of a company or product Respond to blog posts or tweets Ask the customers to participate in surveys form

This will prove advantageous so as to: Determine and leverage client stated habits and preferences to personalize and even hyper-target sales and marketing communication Improve operational and analytical CRM Provide content created by consumers to be part of promotional and sales cycle

Social media tools in the market like Alterian, Nielsens BuzzMetrics and also social media community tools like Communispace, Jive Software, and Lithium Technologies can be used to monitor the interactions occurring on this front. Thus, the effective use of these two drivers can lead to an advanced CRM capability, helping the organization to surge ahead of the competition.

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