"We spend over $1 billion on IT...": Dell

Courtesy: indiatimes
Dell, the world’s second-biggest computer maker, is increasingly looking at over 1,200 professionals at its Indian centres to not only support the company’s critical business systems globally, but also to identify and address newer business opportunities. Dell CIO Robin Johnson says that his company drives over one-third of its $500-600 million IT application budget out of India. Dell spends over $1 billion every year on IT. Excerpts.

Q: Has the recession affected your long term IT-led programmes? What has been the impact on your IT budget?

We have seen few recessions in the past, but I do not think anybody has seen anything like this before. The expectation levels about what is growth have been reset. We have also taken a number of cost-saving measures, but for us, this recession is an opportunity. This is a great opportunity for us to rationalise our application base -- we have already reduced the number of applications by a quarter last year, and will carry a similar exercise this year too.

By getting rid of costs, it becomes easier to focus on innovation. We spend over $1 billion on IT and almost half of this is spent on applications. Last year, we took almost 10% out of our IT budget. We will continue to focus on more productivity. During recessions, IT often gets its budget reduced and is asked to do more with less - this is the biggest challenge for any CIO.

Q: How has India contributed to Dell’s IT programmes?

India is at the front and centre of whatever activities we are doing and are planning for the future. One-third of our global IT workforce is here and our teams here have been making significant contributions. For instance, our teams in Bangalore and Hyderabad contributed almost 80-90% of application work in the areas of sales, manufacturing and services.

Last year, the B2B projects saw 100% work being done out of the country. Increasingly, I am looking for knowledge about the marketplace here. I look at India as a thought leader of what products and services we should be delivering -- it’s much beyond labour arbitrage now.

Q: Many enterprises are looking at their technology captives as non-core assets and are selling them off. What are your views on running a captive operation?

These days, we find many discussions around whether captives work or not. I feel differently - this argument about whether to have captives is relevant if you do not have a commercial operation in India. For us, India is a big market and a very important base for our IT operations.

Q: What are the parameters for any new technology investment decision taken by you at Dell?

I start by asking what’s relevant for us as a business, is it a fit and whether the solution will be better and faster than what we have currently.

And, if the answer is neither of the above, then I would like to know if it’s a better idea for our business to pursue. It’s very important to spend a lot of time in understanding business roadmap and use it as a frame of reference while making any new technology investment decision.