Vendor Service is the key

It is common knowledge that profit margins in the PC manufacturing business are razor thin. What is less well known is the fact that most PCs are made from standard components manufactured by someone other than the builder of the PC. Thus processing chips are manufactured by Intel, AMD and Cyrix. Hard drives are manufactured by companies such as Western Digital, Seagate and IBM. RAM chips and motherboards are pretty generic, as are things like cases, keyboards and even to some extent monitors. Thus, it is not really accurate to say that major computer companies such as Dell, Hewlett Packard and Compaq "manufacture" computers. It is more accurate to view them as assemblers of parts manufactured by others. The confluence of intense competition, razor thin margins and generic components means that the price you pay for a desktop computer from a major manufacturer is not substantially greater than you would pay for an equivalent computer from a unknown or local manufacturer.

That is not to say that all computers are equal. They are not. A 200 megahertz MMX computer with a 3.2 gigabyte hard drive and 32 megs of Ram, which soon to be the standard entry level computer, varies greatly in terms of performance and reliability from company to company. Journals such as INFOWorld and PC Magazine are constantly evaluating the differences in the speed with which similarly situated computers process standard office applications. The difference in processing speed between the top rated computer and the bottom rated computer is dramatic and has a direct impact upon your return on investment. Application process speed is much more important than the speed of the chip and other esoteric benchmarks. Application processing speed measure the time that it takes for the unit to process certain kinds of common tasks that are completed in your office on a regular basis.

There may seem to be an inconsistency between the fact that some computers perform better than others and the fact that they are all made from generic parts. The explanation for the apparent conflict lies in the direct analogy to cooking. Two salad chefs can put together generic ingredients in different ways. One will produce a masterpiece and the other will produce junk. It's pretty easy to send back your salad but if you have a bad computer it is not so easy. And often the problem with the computer is the same problem as the problem with the bad salad. You send the salad back to get a different salad not to have it patched up by the addition of a few more ingredients. If a computer is a bad product because its component parts don't work together well, no amount of fiddling and tweaking will make it O.K. You are stuck with it and with the cost of the reduced productivity that comes from having an inferior product.

There is another advantage that comes with mass manufacturing of computers and that is that experience often teaches that a particular combination of generic components doesn't work as well as another combination. In the fast paced world of computer assembly the ability to respond to that information and to incorporate it into a better product is critical. It is here that the "just in time" assemblers of computers such as Dell and Gateway have a big advantage. Their customer base provides them with constant feedback and their service organization is able to identify problems that show up on a broad basis. Often those problems come about because of subtle dissonance that occurs among the hardware, the operating system and particular software applications. It is here that experience counts for everything just as it does in making salads and in heart surgery and in law practice. Nobody wants to have their heart operated on by a fellow with an IQ of 180 who is eager to learn but has no experience. Nobody would turn over a major piece of litigation to the new associate who just happened to be editor in chief of the Law Review. The truth is that experience counts in life, in litigation, and in computer building.

What then is the difference and how should you choose? For me the difference is service. Everything else being equal the quality of service is the thing that makes difference. The quality of service is not only a function of time it is also a function of experience and management. Back in the '80's WordPerfect developed its dominance in the word processing field on the basis of its high quality service. Today Dell Computer Corporation is building it's dominance in the manufacturing field on the basis of its service. Dell is eclipsing the competition as the most recent review of national brand customer service in PC Magazine shows.

Some really big names have absolutely awful service. I have had clients who bought a name brand computer by mail who have been unable to get any significant service and who have spent more time trying to fix machines than they are worth. Sometimes it seems your only remedy is to file a lawsuit but even then some of the seemingly solid manufacturers may be effectively judgment proof. A little over a year ago I wrote a column about a ludicrous, and disastrous, service experience that I had with Apple Computer. The column reported on a deathly combination of an incredibly arrogant (and stupid) service representative and an equally awful set of service policies. It was shortly after my experience that Apple went in the tank. One of the reasons, I am sure, is that the experience I had was not unique but in fact was replicated across their customer base. Indeed, part of the restructuring and attempted turnaround of Apple is based upon reorganization of their customer service component. No matter how good your computer is, if you can't get considerate, fast and knowledgeable customer service you are in trouble. I am happy to report on two experiences I have had recently where fast conscientious and competent customer service made all the difference. The two companies are Dell Computer Corporation and Xerox.

Dell's service has been top rated for several years now and it is not surprising that it is about as good as you can get. I was more surprised at Xerox since they have waned somewhat from their once lofty position at the top of the office machine market. I had a defective fax/scanner that was driving me nuts. When I finally called, they had new unit at my door the next day. It turned out to be defective and I called again, this time in angry frustration. I didn't need the anger though because they had another unit at my door the next morning at 10am. In both cases, my service was terrific. Dell gives a you a priority number that get you through to a service rep in a minute or so and Xerox seems to have enough people on board that I only waited for a couple of minutes each time I called.

Xerox and Dell show that a company that cares about technical support can provide it on a national basis in an effective and efficient manner. They both give me faith that the American business machine and computer industry can combine quality, service and price to compete effectively in the international markets that will be dominant in the coming century.