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Building the ERP Business Case

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)

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Building the ERP Business Case

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  1. Building the ERP Business Case 2005. 6. 8 Taeseong Jeon Yonwook Ra YoungGoog Kim

  2. INDEX Dell? (Background) Market share and revenue SWOT analysis GAP analysis The results of ERP Implementation Conclusion 1 2 3 4 5 6

  3. 1. Dell? • DELL Computer Inc (found in 1984) • By Michael Dell with $1000 asset. • Produced the customized computer to meet customer's needs based on his own experience. • Strategy • 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.

  4. 1. Dell? • 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 • Support • 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.

  5. 2. Market share and Revenue • Market Share in PC market [Source: IDC, 2005]

  6. 2. Market share and Revenue • Dell’s net revenue [Source: IDC, 2005]

  7. 3. SWOT Analysis • Dell’s SWOT Strengths Weakness 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 SWOT Opportunity Threats 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 Dell ranked number 1 computer retailer in the USA IDC forecasts 8.7% of growth in PC market, 2005

  8. Vision • Customer satisfaction guarantee • Efficient management in supply chain • Keeping leader position in PC market • Accomplishment in technical advantage between partners 4. Gap Analysis • Dell’s As-Is & To-Be ERP Implementation Longer delivery time compared to other competitors Competitors selected alliance strategy (HP+Intel) Need improvement in relationship with partners Forecasted growth in PC market

  9. 5. The results of ERP Implementation • Real Case – BPIC Better companies Typical 75% Inventory Reduction 30% On time delivery or stock availability To 95% To 99% Manufacturing cost due to both more efficient use of people and equipment as well as productivity Down 10% Down 50% Up to 95% Up to 99% Stock record accuracy Up to 100% Up to 98% Bill of material accuracy [Source: BPIC.co.uk, 2005]

  10. 6. Conclusion • Dell 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 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

  11. Thank you

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