MIS at DELL
Presented by : Zalifah Che Embee Habibah Kadir Mohd Aswad Shahrul Asmadi Zahari Sehak (DL (DL (DL (DL (DL 1010195) 1013072) 1018773) 1010501) 1016065)
OVERVIEW OF A COMPANY
Dell is the largest seller of PCs in the world. Company sells build-to-order computer systems directly to a wide range of customers from the largest enterprises and government agencies to individual home PC enthusiasts. By year 2001 company grew to $31.8 billion. Dell has seen its stock increase by 400 times over the last decade. Companys innovations are driven by customer needs, cutting edge solutions and strategic partnerships: - Listen Solve Impact Dell helps drive the course of future industry innovation through a time-tested process that puts customer needs first.
ABOUT THE COMPANY
We do businesses directly with customers, one at a time, and believe we do it better than anyone in the planet. Dell Dells focus is to make computing easy like it should be, so that even regular people will be able to use computers. Companys climb to market leadership is a result of its persistent focus on customer. Dell teams work hard to meet the needs of each customer with carefully tailored computing solutions. We communicate directly to our customers in person, via the internet or by phone, so our understanding of their need is instantaneous. Dell Focusing on customer helps Dell efficiently and effectively deliver the products and satisfy the customers. Dell.com is one of the worlds leading web sites. Nearly one out of every five standards-based computer system sold in the world today is a Dell.
MANAGEMENT INFORMATION SYSTEM
System that provide information needed to manage organizations effectively. MIS concepts is vital to efficient and effective computer use in business of two major reasons : It serves as a systems framework for organizing business computer applications In emphasizes the management orientation of electronics information processing in business The output of an MIS in information that sub-serves managerial functions MIS deals with information that is systematically and routinely collected in accordance with a well-defined set of rules The information provided by an MIS helps the managers to make planning and control decisions
MIS ADVANTAGES
It
facilitates planning In minimizes information overload MIS Encourages Decentralization It brings Co ordination It makes control easier MIS assembles, process, stores, evaluates and disseminates the information
BUSINESS STRATEGY
Direct sales, build to order strategy for producing and selling PCs Deal directly with CIOs and top executives To offer add on products and services, to coordinate maintenance and technical support and to help the customer plan its replacement and upgrade cycle The build to order process has been carefully honed for years and involves the entire production cycle and supply chain
ORGANIZATION OF BUSINESS ACTIVITIES
Internal Organization Product Development Component Sourcing Manufacturing and Logistics Sales and Marketing External Relationships Indirect PC value chain Direct PC value chain (Hardware delivery system) Value Web (Virtual Company)
THE INTERNET & E-COMMERCE
Dell and direct sales
Dell started the direct-sales approach, eschewing the thendominant indirect model that interposes a network of distributions, value-added resellers, and retailers between PC makers and PC buyers. Selling direct lowered dell costs by 25-40% compared to competitors. Dell passed these savings to customers. Dell believed that this could help best understand customers needs and provide the most effective computing solutions to meet these needs. Dells model is based on build-to-order process, where company builds each PC on demand. Customers can choose what components they want for their computer, Dell then assemble the order and ships it. This strategy improves customer satisfaction and reduces costs and risks to the company.
Benefits of direct sales method
Direct sales in conjunction with build-to-order is a powerful model for both Dell and its customers. Customers get what they want, rather than be forced to choose among a fixed set of options. Dell wins because by developing and building only those systems that customers want, Dell eliminates the excess cost of buying too many components, having high storage and inventory costs, and having to sell the surplus at a loss. Dell can use savings in other areas such as web site improvement, marketing and distribution.
Goals and strategies
Dells emphasis on tech-savvy PC buyers made online selling a natural, because high-end PC buyers were obvious users of internet and early adopters of e-commerce. In order to succeed in online selling Dell needed configurator, which let buyers choose among computer models and variety options and components. When a customer clicked on an option exact cost was immediately added. Configurator also records buyers preferences, giving Dell immediate access to buying patterns. By 2000, online sales were running at $50 million per day and made up more than half of all Dell product sales.
Confusion and need of change
Although Dell.com is undeniably successful, two studies of online PC buying gave company confusing picture of the effectiveness of its online sales efforts. Only 1 out of every 100 visits to Dell.com resulted in sale 99 percent of visitors left before buying. This fact was confusing because Dell enjoyed over 70 percent market share among online PC vendors. Dell needed to carefully analyze this and understand buyer behavior and focus on best possible opportunities for online sales growth.
Understand customer needs and behavior
Study revealed extremely high attrition rates among visitors to Dell.com. Online PC buying involves three phases: browsing, configuration and checkout. 50 visitors out of 100 leave the site in the browsing phase, 48 leave in configuration and 1 leaves checkout phase. Only 1 percent of customers is converted to a paying customer. Converting even a few percent more visitors into customers could have a massive impact on sales. These visitors are not just buying from competitors. The question is how to get people to buy computers online?! Buyers want to compare different products, so they shop around, visiting multiple sites multiple times before buying. Although 99 percent of visitors leave Dell.com before buying, many of them come back later. The average buyer form Dell visits website six times before buying. Among visitors are competitors who visit website numerous times. 90 percent of visitors to Dell.com never bought PC online.
Converting visitors to customers
As we see that targeted customer and actual customers dont match. Targeted customers were tech-savvy people who knew what they wanted and knew what each component does to your computer. On the other hand potential customers that were visiting site were 90 percent people who never bought PC online. First of all it takes more than 5 clicks to get to actual component selection which is in configuration phase. Second, there is lack of practical information about each component that customer chooses. Third, it takes too long to get to checkout phase. There are so many components and services available that customer can just lose patience. Fourth, there are too many add-ons and software offers that are more of a marketing strategy for other companies through Dell site that customers dont even need or want. Fifth, even after all the wanted components selected that customer thought it would be necessary to have the total price at the end jumps up enormously.
Implementation plan
First of all, Dell needs to target less tech-savvy people who dont have good knowledge about computers. Second, decrease amount of clicks that gets customers to configuration phase. Third, add more information about the components so that even low-tech people could understand. Fourth, shorten the steps in configuration phase and eliminate several options so that customers would not lose patience. Also eliminate those component selections which are least selected to make the process of configuration faster and not that difficult. At last, leave swappable components so that customers could select less in one areas and compensate in other to derive to better price.
Growth
Financial situation
Financial situation (contd)
