What is the secret of Dell's success? There is, of course, no one magic ingredient, but for a company that relies on doing things faster and more efficiently than its rivals, you need not look too far beyond the company's processes and IT. Central to both of these is the figure of the chief information officer, and these days that role is filled by Randy Mott.
He's been with the company for three years now, and as a 22-year veteran of Wal-Mart, the last six of which he spent as CIO, Mott knows a thing or two about fast-growing companies with lots of revenue -- in Wal-Mart's case, more revenue than anyone else.
In an interview with ZDNet UK's sister site silicon.com this week as part of an Asian and European tour visiting Dell sites and customers, Mott talked about his philosophy on technology, running a fast company and practising what your boss preaches.
It isn't surprising that Dell advocates clustering, a move away from Unix to Linux, common standards and a general simplification in IT infrastructures. These are trends that make the company's salesforce lick its lips -- but ones Dell claims to have embraced fully itself, and has enabled it to cut costs.
"Common systems and global systems are the key," Mott said, adding that Dell still has some Sun servers "but we've replaced 14 so far this year and we'll be finishing that migration soon."
And, for the record, the IT vendors Mott most admires -- other than his own employer of course -- are, in no particular order: "Microsoft, Oracle, i2 and Cisco."
On organising an IT team, Mott said lots of different skills and various backgrounds are essential -- "not just people from the technology industry." And Dell's magic sauce? "There's certainly no secret formula," said Mott. "What any IT department does depends on what's needed by the business. But you need a really solid team and the biggest area of underinvestment is in the second tier under the CIO."
On strategy, he warns against focusing on one thing. "There must be a balance between devoting resources to three areas: cost-effectiveness (of IT software and hardware) including planned obsolescence; managing the project portfolio; and strategy. Having zero in any of these categories at any time is absolutely the wrong answer."
Most companies keep an eye on what their competitors are doing but Mott reckons that isn't enough. "Open a dialogue with others on best practice and look outside your industry -- a blind spot for some CIOs," he said. Dell, as has been well-documented, is known to have copied successful aspects of Amazon.com, FedEx, LL Bean and other businesses. Mott singles out customer focus, low-cost provision with an eye on controlling expenses and being founder-led. Both Sam Walton and Michael Dell are "not so much worried about what outsiders say as what's right for their companies."
Dell is firmly in the Microsoft .Net camp when it comes to Web services and its business -- involving coordinating with suppliers, partners, customers and a worldwide workforce -- makes Web services adoption a no-brainer. But should the company hold back and wait for others to pave the way, as most observers say it does on the product front, or be seen to be a trailblazer? "We have a responsibility to our customers to use (Web services) internally," Mott said. "We will share our experiences with customers and also give feedback to our product group."
When it comes to skills, there is far too much focus on technical skills, according to Mott. "In order, we invest in business knowledge, leadership, technical skills -- which can be learnt and developed faster than most people think they can."
Dell does not outsource. "We have enough scale to do it ourselves, and that's often a key reason for outsourcing. Outsourcing companies make a profit and you have to ask yourself if that route is best for your business. By definition using a middleman tends not to be the most cost-effective way." However, Mott did go on to say that he does use external consultants, though the aim is for the company to remain self-sufficient, IT-wise.
Against a backdrop of budget cuts and wariness to invest in new or leading-edge technologies, Mott added: "Companies generally spend about 85 percent of their (IT) resources just keeping the lights on and 15 percent doing something new. But IT is never only a cost centre. There has to be a transition away from that 15 percent. At the end of the day, there is still a lot of money being spent on IT and there are still huge opportunities for IT to help the business."