The call-centre operation for the OptiPlex desktops and Latitude laptops was moved back to the US and, in an exclusive interview with silicon.com, Dell CIO Randy Mott said the Bangalore centre was unable to deal satisfactorily with the volume of calls generated by the rapid growth of those product lines.
"In that example we were not as efficient as we want to be," he said. "We were growing very quickly in that [consumer] segment. It got a little ahead of us. We took the decision to get it back under control. Our customers expect more from Dell than other companies and we weren't meeting those [expectations]."
Mott did not rule out future expansion in India and said Dell has a policy of "all-shoring" wherever the right skills are to meet the needs of its global business.
"We certainly learned a lot of things and we'll be smarter about our growth in newly developed areas," he said.
Mott has been CIO at Dell for four years now after his move from US retail giant Wal-Mart, and said being CIO for a technology company has its good and bad points.
"One of the positive things about it is you have a management team that understands the importance of technology," he said. "But there are also 46,000 CIOs in our company who all have opinions on technology and insights, so part of the challenge is good communication to understand what those opinions and thoughts are."
In Mott's time at Dell the IT budget has dropped from 1.91 per cent of revenue to 1.44 per cent of albeit larger revenues and the company is spending less in real dollar terms. Mott plans to bring that down even further to around one per cent of revenue, but that is likely to mean an actual dollar increase given Dell's ambitions to be a $60bn revenue company by 2005.
And Dell is getting more out of its own IT for that money. Mott said his department completed 480 projects last year and has 650 on the table this year, with 60 per cent of the 3,000 IT staff now working in development.
Internally the priorities include the Dell enterprise data warehouse, its global online shop and the migration from Sun Solaris running proprietary Unix to Red Hat Linux, which is set to complete this year. Externally with its own product set a lot of resource is also going into development around applications for Dell's 'one-stop shop' services business.
One area Dell won't be looking at for its own needs is outsourcing. Mott admitted that outsourcing can lead to an "average" IT cost for some firms but said IT is a core part of Dell's business.
"The last thing we want is an average cost structure," he said. ""We consider IT a core competency. It is something we look to for sustainable competitive advantage."