Introduction Challenges Facing the CIO As a classic, loyal Dell customer, Sreeja Kapoor is now conflicted between her company’s relationship with Dell and its need for large complex server solutions. Satisfied with the existing Dell support relationship for PCs, entry-level servers, and networking equipment, Kapoor is apprehensive about Dell’s ability to provide the level of extensive, high touch support for the larger server products. Critical to her decision to purchase mid-range and high servers and support services from Dell is the reliability of the products and on-site support. Kapoor’s primary concern is Dell’s focus on low inventory and lean production may prevent it from offering the same level of service as its competitors - IBM, HP, Compaq, and Sun. Contrary to Dell’s core cost leadership strategy and “box-pusher” beliefs, mid-range and high-end servers require proprietary technology. As a result, Kapoor is not convinced that Dell’s existing structure can be relied upon to provide the support services (typically 24 x 7 x 365, four hour response times) for servers that characteristically host mission critical applications. Challenges Facing Dell From the case, we know that as the leading supplier of PCs, as measured by domestic and international PC shipments in the 2nd quarter of 2001, Dell recently entered the competitive mid-range and high-end server market. Dell’s products and streamlined manufacturing processes have received numerous awards and enamored the business press and academics alike. Through a business model that focuses on direct PC sales, low-cost production, and superior customer service, they imitate rather than innovate and outsource functions that do not directly relate to producing or selling PCs and entry-level servers. However, Dell has differentiated itself from its competition by customizing PCs for its customers and, unlike leading mid-range and high-end server manufacturers such as SUN, HP, IBM, and Compaq, does not have extensive experience providing the requisite high-end server services sought by their customers. Dell’s latest challenge is to develop and deploy competitive, complex server solutions while maintaining its vision of the customer experience. CIO Considerations Sreeja Kapoor must choose from 3 alternative solutions: 1) procure both the products and support services from Dell; 2) purchase servers from Dell and third-party support services; and 3) turn to another manufacturer for both products and services. Each solution has both benefits and concerns, as described in the sections that follow. Dell’s Current Product/Service Offerings Kapoor’s company is representative of Dell’s market segment '' a business client whose needs and expectations are answered by award-winning products
and services. As it does with many of its customers, Dell provides Kapoor’s company a high degree of interaction and customization by means of a dedicated account team consisting of sales, customer service, and technical personnel that offer personalized solutions. Much of this interaction occurs
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Personal computer, service provider, Service system, Dell support relationship