Is Now the Right Time for Dell to Drop Its Consulting Group?

Arthur Cole
Slide Show

2016 Business Communications: Changing the Way We Work

For enterprises that are planning for the digital transformation that will place data-driven workflows across all facets of business and commerce, I have bad news – the transformation is not coming but is already underway.

You can see it in companies like Uber and Tesla, which are using wireless technology, advanced applications and cloud-based services to disrupt long-standing industries to their cores, forcing many leading companies to either revamp their business models in record time or face obsolescence.

Clearly, few organizations can do this without help, which is why the news this morning about Dell’s intention to sell its IT consulting division to Japanese telecommunications firm NTT is so odd. True, the company needs to raise quick cash in order to finance its $67 billion takeover of EMC, but at $3.06 billion, the sale already falls short of the $3.9 billion that Dell paid for the former Perot Systems in 2009. And at a time when virtually every industry on the planet is in the grip of a transformation that will affect everything from IT systems to sales, marketing, finance and virtually all other business processes, it seems that demand for consulting services is about to go through the roof.


To get an idea of the magnitude of the change taking place, consider three of the overarching trends that are already taking shape, says IBM’s Dario Debarbieri. First, you have the Internet of Things, which will generate a flood of data from virtually everything we own and will force organizations to push processing and analytics from centralized data facilities to edge devices. Second, you have the creation of the app-driven economy, which will require the development of advanced APIs and collaborative workflows. And third, you have the rise of cognitive computing technology that will develop for itself a high degree of autonomy to troubleshoot problems and identify new business opportunities through the wealth of data at its disposal.

And it isn’t so much the deployment of these new technologies that poses the biggest challenge, but their integration into both legacy and emerging architectures. According to a recent survey by Unisys, 48 percent of IT leaders rank integration and support of analytics as a top challenge going forward, while 43 percent are looking at integrating on-premises and cloud-based applications as a top priority. Perhaps most telling, however, is the fact that newer service-based companies like Uber and Airbnb are not quite so worried about integration, primarily because they have little or no legacy data infrastructure to integrate. For everyone else, however, embracing the new without disrupting the old is a complicated task, and one that all but mandates outside help.

Business Strategy

The biggest trap to avoid, says Graham Clark, of IT services management firm NIIT Technologies, is focusing on the process of transformation rather than the outcome. While it may be tempting to launch a mobile app, set up a Twitter feed, tie it to a cloud, run a weekly analytics report and call it a transformation, the real prize is in redefining the business operating model around digital processes so that the enterprise becomes more agile and less costly to support with data infrastructure. This can put many organizations on a razor’s edge because it must revolutionize how a company operates without severing ties to legacy systems and processes all at once. At the same time, it must encompass multiple business assets, such as products, markets and brands, not to mention the underlying business culture, key skillsets and even the very idea of ownership and where revenue streams originate and who controls them.

So while the technology is important in all of this, organizations will find themselves more in need of guidance than anything else. A company like Dell will have ample supplies of the former, particularly with EMC under its belt, but without a strong consulting and services wing, it will be at the mercy of those who are being paid to tell the enterprise how to proceed with digital transformation.

Dell, of course, is a large company and has ample expertise at its disposal with which it can guide the enterprise through this process, but at a time when a good consultant is worth his weight in gold, it seems odd that the company would weaken this aspect of its business model, and at a loss no less.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.



Add Comment      Leave a comment on this blog post
Mar 28, 2016 3:14 PM Enrique Enrique  says:
Of course is the wrong time to sell its IT services group, but Dell does not get that. Dell is at heart a "bundles" vendor (hardware and software). IT services is about people. Dell never understood the consulting and services business and never will. All the trends indicate, as the article correctly point out, that we are entering an era with commodity hardware, and when the important issues will be IoT, data, software, integration, and deep domain expertise - all the things that Dell does not have. So: good luck Dell, and my best wishes to NTT Data. - I am sure they "get it" Reply

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