How an erstwhile boxmaker is transforming inside-out while adopting an outside-in approach

Some three years ago, Rajan Arora, owner of the Delhi based Megahertz Infotech, a mid-sized systems integrator, reached out to Dell after bagging Vectra Glosec, an Israeli customer that dealt with surveillance equipment. “The first quarter went off very well but by the second quarter, I realized that Dell had started tapping the customer directly as the customer started questioning our value addition,“ Arora recalls. So he approached the Dell team, who in turn, responded with helplessness claiming that the customer had moved from a mid-market account to a global account. Clearly, for Arora, Dell back then sounded like hell.

About three quarters back, the same Rajan Arora trucked with Dell as a partner after seeing industry stalwarts and channel champions Alok Ohrie and Anil Sethi sign up with the tech heavyweight. “A quarter back, we picked up this large order from a telecom VAS provider, a Dell direct account,“ he says, thanking Dell’s intervention for it. Initially, the customer refused to sign up with Arora claiming to deal with Dell directly. So when he informed Dell about the stickiness, the company told the customer that it would deal with it directly but ultimately everything will be done by the partner. “This was a turning point and I realized that Dell has bought my trust,“ says Arora.

Making a private bid

Perhaps, this is the transformation Dell India President & Managing Director Alok Ohrie refers to time and again as an “outside-in approach“. It is evident ever since Michael Dell took his eponymous Texas-headquartered company private last year at a whopping $24.9 billion. The 49-year-old Dell wanted to surge ahead as an end-to-end solutions provider rather than a mere box-maker as Wall Street’s profit-oriented quarterly mindset impeded that thought process. So while Michael Dell, who scoffs at the investor community as “circus clowns“, took his company private only last year, he was plotting to do so for six years or so, with about 40 acquisitions at $18 billion. And Dell’s Team India seems to be at the forefront of that change.

While Ohrie, 48, joined Dell last year, the company roped in Anil Sethi, another IBM old-timer with stints in Microsoft and TCS, to head channels in India only in May. In the new scheme of things, they had to radically transform Dell’s direct-selling model by adopting a partner-driven approach when it came to coverage. Also, the new Dell was no more a mere box-maker but an ambitious player in the high-margin (Social, Mobility, Analytics, Cloud) SMAC landscape, albeit a late entrant.

Crossing the channel

Ohrie and team went about first by crafting out a three-pronged route to market (RTM) –Dell-led, partner-led and distributor-led–model. The move followed Michael Dell’s announcement at Dell World in Austin last December that the company would offload 2 lakh accounts to partners globally. And Dell India has not disappointed a year later by handing out about 40,000 of those accounts to partners.

While the Dell-led approach envisaged creating the initial traction and momentum around conversations with the customer wherein the company could showcase its capability, it ensured ample room for partner engagement in case of gaps which Dell couldn’t fill in. For instance, if a BFSI customer demands refreshing core banking solution, Dell does not carry such application and would be willing to partner with an ISP which would essentially be providing that part of the stack.

In the other two engagements, Dell’s partner-led approach addresses enterprises with end-to-end solutions while the distributor-led plank caters to end-consumers. Unlike in the past, “there is clarity, predictability and a defined approach with which we are going to the market and so the trust barometer has suddenly shot up,“ claims Ohrie.

Though Dell India already has 3,000 partners on board, many of them are multi-channel in nature and end up selling IBM or Cisco offerings too. “In certain accounts, particularly those involving hardware, Dell is very strong and partners are aware of that, and some partners get a comfort level with the new top guys at Dell, whom they see as channel-driven,“ claims Vishal Tripathi, Principal Research Analyst, Gartner.

However, there is a caveat for Dell if it were to become a formidable player in the services pie. “Dell has actually missed the bus in terms of services in India and implementing large (high-margin) projects is not in their DNA,“ says Benoy CS, Director, Information & Communication Technologies Practice, Frost & Sullivan. He adds that while the direct model would go on to feed the SOHOs and SMBs, Dell needs trust with partners to crack the larger projects.

Krishnakumar P heads the consumer and small business portfolio at Dell India and seems well-aligned to the new reality.“We have identified demand bottom-up and are tapping Tier II to Tier V towns that are hungry for information,“ he says. Dell has even re-jigged its marketing ploy in such areas by telling its distributors to give inventory to partners on consignment basis, a first-time in the industry. Krishnakumar says it is a competitive advantage for him since stock is made available only on order, thereby negating inventory pileup at the partners’ end.

Leadership realignment

The new approach to selling also called for splitting the country geographically into four zones–north, south, east and west–each zone led by a senior leader who directly reports to Ohrie and is responsible for P&L of all the categories in Dell’s product portfolio. For instance, Ajay Kaul, who runs north, is provided with a team of resources that cuts across all the four categories–end-use computing, enterprise solution, software and services.

An obvious question pops up–what comes of the various business unit heads, or the horizontal heads, as Dell calls them? “In any matrix organization, there is always collaboration and teaming,“ points out Ohrie. Say, a solution is being proposed with multiple categories as a part of the stack, and pricing needs to be arrived at. While that pricing is the responsibility of the geography head, in the spirit of collaboration, he would ideally revert to the business unit head to thrash out an agreement before going ahead. Benoy CS of Frost & Sullivan calls the dual leadership far more focused since the product teams will support the geo heads, who would be aligned to the regions. “It is quite like in telcos where there are circle heads with overriding power to even decide on circle rates,“ he points out, adding the move is certainly a cultural shift as far as Dell is concerned.

Change management cascade

With leadership aligned to the new order, Dell India undertook the culture of end-to-end selling throughout the company with its home grown `Platinum Club’ campaign, an institutionalized sales incentive program that rewards high performers based on consistent contribution.

After getting the buy-in from Texas for its three-pronged RTM, Dell India was faced with the challenge of diffusing the logic across nearly 27,000 employees. “So 10 months back, we did 23 sessions in just three weeks,“ recalls Ohrie. Each session was conducted by a leader and the mentoring and coaching got cascaded to other levels.

Interestingly, such sessions were focused on three critical questions–why, what and how–as each session addressed one such query. Again, Ohrie takes recourse to the outside-in approach when he talks about the `why-do-we-need-to-change’ and `how-do-we-change’ part of it. The effort was to make it inclusive and the younger workforce had questions around these topics. “They wanted to know the deployment of resources–specialist resources versus generic resources, how will we realize then power of end-to-end solutions in the market, what kind of capability build will we further invest on,“ says Ohrie.

From people feedback, eventually the go-to-market model got tweaked as change management percolated down the last mile. Alongside, a helpdesk came up to address any unanticipated issues. As account movement in the new scheme of things was a critical component of the transition, it involved transfer of responsibilities from one individual to another. So the helpdesk wires rangovertime to address that set of queries.

After the marathon sessions, the company came up with an `Embrace the Change’ campaign to make people familiar with the new processes. “It is aboutlearning the new and un learning the old ways of doing things,“ says Vijay Bharadwaj, VP-HR, Dell APJ. And once the teams went through the early phase of transition, the company propelled them to the next level with another home grown campaign `Lead the Change’. “Every individual up to the front end level became an ambassador for the company and were expected to lead from the front,“ says Ohrie.

Today, with its `YOU’ campaign, Dell is further trying to move up its capability build needle as the initiative aims to skill the workforce through online courses and workshops in the end-to-end game. “Bottom line, the organization expects you to be a trusted advisor to the customer, and so you have to start demonstrating in the customer engagement that initiative which will get us to strategic discussions with them,“ is what Ohrie says, rather straight-faced.

Source : The Economic Times (Mumbai)

Date: 21st November, 2014

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