Dell Unveils Internet-Enabled Customer Support Strategy

On August 25th, Dell Computer Corporation said it will provide, over the Internet, advanced customer support capabilities that will eventually help all Dell systems detect, diagnose and resolve most of their own problems automatically without human interaction.

Market Impact

Dell is getting in early on the overall electronic support marketplace, predicted to grow from $1.9B in 1998 to $10.4B in 2002, a growth rate of >45% per year (Source: IDC). Dell is trying to become the pacesetter in yet another area, which should eventually yield it significant payback in terms of sales and market share. (The other area is, of course, the direct-sales model.) This also appears to be a shot at Compaq, whose 1998 purchase of Digital Equipment Corporation, (ostensibly for its service/support division) has yet to yield the anticipated benefit.

User Recommendations

We expect Dell to do a good job in this area, as it has in implementing its direct sales vision and model, and so we expect customers will see significant benefits. However, as with any new model, customers should exercise a little caution in the early stages, and should make sure there are fallback processes in place before committing to this completely.

Minimizing the Total Cost of Technical Support for Enterprise Applications

Enterprise software selection is a big decision for any organization. Licensing fees are costly, and choosing the software that matches the company’s business model can be a daunting decision. If the enterprise decides to go with a particular vendor, and the vendor does not deliver, the company will incur a large financial loss. Thus, when selecting an enterprise software solution, there are many factors that need to be considered in the decision. These include the quality of the product or solution; customer service; the purchasing price of the software or license; and other cost factors involved in the process of procurement.

In purchasing an enterprise software solution, there are three types of costs:

* direct costs (related to purchase, implementation, and other immediate costs arising from purchase);
* opportunity costs (the costs arising from forgoing the benefits of an alternative solution); and
* indirect costs (the costs that are not directly calculable, but that impact the business once the solution is implemented).

To curb the dilemma of unwanted costs of any kind, one way an enterprise can evaluate vendors is by examining their technical support plans. This article will examine the implicit costs behind the support plans, and help users avoid losing revenue due to inefficient or unresponsive technical support.

Cost Analysis

The following sections deal with the three different types of costs. To make an educated decision on the software solution and support plan, enterprises should consider these costs as a way of minimizing the risk of having poor technical support response times from vendors. The consideration of these costs can be used as criteria for an informed decision.

Anatomy of Direct Costs

In order to give a basis for the analysis of costs relating to enterprise software, the general formula should be noted: