Dell Computer, the cycle-time from arrival of raw materials to receipt
of cash payment after delivery of finished goods is measured in weeks
and inventory turns are measured in days. Transaction data must be accessible
with Zero-Latency at all management and measurement points.
At one of its Platinum Council meetings where Dell executives meet with
key customer account CIO's, Kevin Rollins, Dell's Vice Chairman, talked
about the critical need for every aspect of the company to be capable
of changing its process rapidly. He referred to this as an essential part
of what he called velocity, or the continuous speeding up of every business
process. At that same meeting, Michael Dell described his business as
being a virtually integrated system of processes and products, extending
from suppliers through Dell's manufacturing and distribution processes,
to end customers and the support of the product on their desktops. He
also talked about the company's distributed management style and how continuous
process improvement was a way of life throughout the company.
you look beyond the Direct Sales Model to the Operational Model, Dell's
success is fueled by its ability to adapt to supplier and customer stimulus.
This Sense and Respond operating model is pervasive. Having the ability
to incorporate lower cost or higher performance mainboards, hard drives,
or video interfaces into the production stream rapidly is of paramount
importance. The core competence in Dell's operation is Process Management.
There is a wall of patent and supplier recognition plaques in one plant
highlighting process innovation and precision execution. Such accomplishment
demands measurement and reporting systems that are focused on process
metrics not business transactions.
in many companies, Dell's information systems evolved and mutated as the
company sustained rapid growth and continually pushed the envelope of
customer focus, technology access, and business performance. Over time
the complexity of its information technology infrastructure began to impact
management's ability to observe, understand and adapt its operational
IT Management Issue
of the situation lead to a decision to replace a number of home-built,
unconnected, information systems that inhibited information flow across
the company. With a focus on Zero-Latency and application replacement,
an integrated suite of applications approach was elected and an Enterprise
Resource Planning system implementation program was launched. Considering
the business requirements (as stated) this was an obvious architectural
choice. However the relationship between design and architecture is not
after several months of detail work and considerable expense, Dell Computer
abandoned this Enterprise Resource Planning program when they realized
that it was inappropriate in their environment. The issues were not directly
related to the application architecture, but rather to the implications
of running a dynamic company with a distributed management philosophy.
of data through the enterprise is essential to Dell's competitive advantage,
and an integrated suite of applications does appear to be an appropriate
solution. However, when rapid manufacturing process change and continual
process performance improvement are paramount, the agility of process
automation tools is vital, though they are often overlooked in the selection
process. Process agility and integrated application suites are at odds
not because they lack the ability to respond, but because of the risk
control practices dictate several instances of the application. One for
design and development, another for test and integration, and a third
for productive use. Such practices also dictate rigorous change deployment
processes that try to maximize the amount of time that the application
is stable. The bottom line is that all of the measures taken by information
technology professionals to assure a stable system and consistent data
protract business process change efforts.
even more frequently missed selection criteria is Fit to Management Systems.
Dell's virtually integrated business model managed in a highly distributed
manner does not map well to an automation environment that is best implemented
with shared and integrated processes. In summary, the selection of an
integrated suite of applications for this set of criteria was a mistake.
a post-mortem review of this Enterprise Resource Planning selection, the
solution certainly provided zero-latency data availability, and it promised
more seamless virtual integration and less complexity. However, other
traits of the solution would have limited the ability of the company to
optimize processes in a distributed manner; violating the company's management
and process improvement style. As shown in Table 1, had the essential
business capabilities of Dell been mapped against the operational capabilities
of the Enterprise Resource Planning system, two strong cautions would
have been raised. This would have taken place even before potential suppliers
were engaged and well before any large expenditure had been made.
of ERP Systems
CBA Architecture Reference
business functions prescribe organization structure
architecture must map directly to transaction definitions.
systems that infer org. structure from business function will need
companies find it inefficient to adopt prescribed business function
Transactions and functional modules demand users who are task and
of Zero-latency and Zero Propagation Time must be designed into processes.
consistency highly determined by workflow configurations.
required to learn upstream and downstream implications of transaction
and enforced business rules facilitate a high degree of coordination
variations for unique requirements are costly and slow to implement.
rule changes will propagate simultan-
eously & immediately to all processes.
of a Cross-Functional process Management Orientation.
fit or no issue
and functions of technology products almost always make it onto the selection
spreadsheets that information technology managers use to choose among
competing products and suppliers. Such models are generally focused on
data and transaction processing as primary factors with user interface
and external application integration as secondary issues. Table 1 is a
section from a multi-dimension reference architecture for integrated application
systems. It cross-references the characteristics of such systems with
anticipated impacts on Business Process, Information Technology, and Organizational
Dynamics systems. Such a tool allows a much more thorough examination
of investment risk than the traditional list of features, functions, and
To avoid such architecture omissions, selection processes should have
extended the Zero-Latency concept to every aspect of the business architecture
not just to manufacturing. If done early on, it would have suggested that
the level of business process integration that an Enterprise Resource
Planning system imposes might smother distributed process management and
thereby negatively impact the company's "Virtual Integration" model.
When selecting information technology products, the dynamics of the business
must be clearly understood and considered. For example, cycle-time reduction,
zero-latency data propagation, distributed management, and business process
change facilitation must be established as business capability requirements
and carried onto the selection matrices used to select information technology
establish such requirements, examine the situation by asking the question:
"What are the essential business capabilities for people and process systems."
Then, translate those business capabilities into 'must have' capabilities
of any technology solution. Such issues vary widely from company to company,
but following is a sample of categories in each dimension:
empowered decision making at a point closest to the customer/supplier
through information and the ability to make financial commitments.
Associate pricing override.
agent writeoff authorization.
transaction exception detection criteria and notification mechanism.
adjustment and periodic restructuring of sales accounts, regions,
territories, and management.
configuration of sales reporting hierarchy with automatic 'revisionist
history' reporting capability.
of measures to a Balanced Scorecard for process activity-level metrics.
transaction execution triggers that tally counts and/or log events.
to extract transaction execution triggers and populate the Scorecard
the financial risk associated with a subset of customers whose markets
are highly volatile and subject to seasonal cash flow issues.
Credit Limit controls can be set for groups of customers and hierarchies
of customer groups with pre-programmed seasonal expansion and contraction.
In summary, information technology deployment success is dependent on
many factors that are not directly related to the technology or the ability
to install it. Those factors are only apparent after the fact or as a
result of considerable forethought and a clear understanding of the Core
Competence and Essential Capabilities of the enterprise.