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Building the ERP Business Case. 2005. 6. 8. Taeseong Jeon Yonwook Ra YoungGoog Kim. INDEX. Dell? (Background) Market share and revenue SWOT analysis GAP analysis The results of ERP Implementation Conclusion. 1. 2. 3. 4. 5. 6. 1. Dell?. DELL Computer Inc (found in 1984) - PowerPoint PPT Presentation
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Building Building the ERP Business Casethe ERP Business Case
Building Building the ERP Business Casethe ERP Business Case
2005. 6. 82005. 6. 82005. 6. 82005. 6. 8Taeseong JeonTaeseong JeonYonwook RaYonwook RaYoungGoog KimYoungGoog Kim
Taeseong JeonTaeseong JeonYonwook RaYonwook RaYoungGoog KimYoungGoog Kim
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INDEXINDEX
Dell? (Background)
Market share and revenue
SWOT analysis
GAP analysis
The results of ERP Implementation
Conclusion
11
22
33
55
66
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1. 1. Dell?Dell?
DELL Computer Inc (found in 1984)DELL Computer Inc (found in 1984)
By Michael Dell with $1000 asset. Produced the customized computer to meet customer's need
s based on his own experience.
StrategyStrategy
Cyber management "Build-to-order" Customized PC that are ordered by individuals each time.
• Exceptional customer service • 24/7 Toll free technical support• Sending out repair person next day after the customer's request.
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1. 1. Dell?Dell?
Result of strategy Result of strategy
Increased net profit of 168 million dollars per a year Number 1 computer retailer in the world past 4 years Internet ordering makes more profit than phone
ordering• Daily profit of around 4-6 million dollars• Expecting 120 million dollars next year
SupportSupport
Let individual customers choose and educate themselves about the products
More than 30000 downloads per a day from Dell's website
15 million dollars savings in customer service budget.
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2. 2. Market share and RevenueMarket share and Revenue
Market Share in PC marketMarket Share in PC market
Market Share
16%
6%4%4%
52%
18% Dell
HP
IBM
Fusitsu
Acer
Etc
[Source: IDC, 2005]
DellDell HPHP IBMIBM FusitsuFusitsu AcerAcer Etc.Etc.
QtyQty 31,770,100
28,063,000
10,492,000
7,182,000 6,451,000 -
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2. 2. Market share and RevenueMarket share and Revenue
Dell’s net revenueDell’s net revenue
0
5,000
10,000
15,000
20,000
25,000
30,000
January 1, 2003 January 1, 2004 January 1, 2005
(year)
($: m
ilion)
BusinessU.S. ConsumerEurope Asia Pacific- J apan
[Source: IDC, 2005]
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3. SWOT Analysis3. SWOT Analysis
Dell’s SWOTDell’s SWOT
SWOTSWOT
StrengthsStrengths WeaknessWeakness
OpportunityOpportunity ThreatsThreats
Keeping Cost down
A build-to-order manufacturing
Just-In-time inventories
Direct sales to customer
Pioneering use Internet
No chance for the buyer to take a look at the actual products before purchase
Short product life due to the low quality parts
Dell ranked number 1 computer retailer in the USA
IDC forecasts 8.7% of growth in PC market, 2005
New HP & IBM are right behind for competition
Longer delivery period (3X slower than HP)
HP’s partnership with Intel is expected to place HP on the cutting edge PC
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4. 4. GapGap Analysis Analysis
Dell’s As-Is & To-BeDell’s As-Is & To-Be
Forecasted growth in PC
market
Need improvement in relationship with partners
Competitors selected alliance strategy (HP+Int
el)
Longer delivery time compared to other competitors
ERP Implementation
VisionVision
• Customer satisfaction guarantee• Efficient management in supply chain• Keeping leader position in PC market• Accomplishment in technical advantage between partners
• Customer satisfaction guarantee• Efficient management in supply chain• Keeping leader position in PC market• Accomplishment in technical advantage between partners
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5. The results of 5. The results of ERP ImplementationERP Implementation
Real Case – BPIC Real Case – BPIC
[Source: BPIC.co.uk, 2005]
Inventory Reduction
On time delivery or stock availability
Manufacturing cost due to both more efficient use of people and equipment as well as productivity
Stock record accuracy
Bill of material accuracy
30%
To 95%
Down 10%
Up to 95%
Up to 98%
75%
To 99%
Down 50%
Up to 99%
Up to 100%
TypicalTypical Better Better companiescompanies
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6. Conclusion6. Conclusion Dell has potential growthDell has potential growth
Last year, PC market increased by 14.7% IDC forecasts the growth of PC market will be 8.7%
Dell can accomplish the vision by ERP implementationDell can accomplish the vision by ERP implementation Inventory system will be improved Delivery time will be fast up to 99% Dell’s data loss will be decreased Dell can have sufficient information efficiently
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Thank youThank you