Wednesday 7 December 2016

Ireland operation the beating heart of tech giant Dell says European head

Dell's European head Aongus Hegarty talks about his company's return to jobs growth, Ireland's strengths, and managing through the euro crisis. By Donal O'Donovan

Published 08/12/2011 | 05:00

Three years ago the Christmas season was dramatically cut short for thousands in Limerick and Dublin when computer giant Dell announced it was cutting almost 2,000 Irish jobs.

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The January 2009 job cuts could not have come at a worse time for the country.

The Fianna Fail-Green government was crumbling under the strain of the Anglo Irish Bank collapse and the building sector was in freefall.

Panicked government ministers flew to the US to beg Dell's eponymous CEO to change his mind, but the logic of shifting production from high-cost Ireland to Poland was undeniable.

Dell wasn't just another blow -- in a time of crisis it showed that Ireland could no longer rely on business-as-usual from export-oriented multi-nationals to keep the economy afloat.

It looked like the end -- not just for Dell in Ireland, but for an entire economic model.

Today, manufacturing is gone but Dell Ireland is back in growth mode.

"Dell Hell" headlines remain fresh for hundreds of former workers who are underqualified for the new expansion, but Dell Ireland is growing again, and adding jobs.

"We have more than 100 jobs to fill, and that's despite the fact that we have already filled half of the 150 new jobs announced in June," Aongus Hegarty told the Irish Independent this week.

Sitting in Dell's neat, no nonsense offices in Cherrywood in Dublin, Mr Hegarty is clearly relieved to have a good news story to tell as the company heads into its second decade in Ireland.

The Limerick man has Europewide responsibility for Dell's consumer and SME businesses. He also heads up the 1,300-strong Cherrywood operations, which is the biggest anywhere in the European, Middle East and Africa region. If that wasn't enough, he runs the 2,400 strong Dell Ireland team jointly with Limerick based Sean Corkery.

He says the business is being transformed, but is deepening rather than cutting its Irish ties.

Dell Ireland is changing as Dell itself is also undergoing rapid changes. Once a bulk manufacturer, the company has made a number of acquisitions and investments over the past two years that changed the shape of the company.

It still makes computers and servers but now also provides e-commerce, networking and cloud computing services.

In Limerick software jobs in computer programming and project management have replaced manufacturing and packing.

In Dublin, financial services professionals let go by the banks are being hoovered up to deepen Dell's own customer financing services.

Fewer jobs

There are fewer jobs, but they are better paid and higher skilled.

"Over the last five years the Irish businesses have moved up the value chain, but at the peak there were 2,000 jobs in Limerick alone and now it's half that, so these are huge changes," says Mr Hegarty.

"The most visible changes are in manufacturing -- but the transformation of the call centre has been similar."

"In Cherrywood, we don't just process sales orders, we are providing high-end technical support for big corporate and public sector clients," he says.

The Dublin team works with customers from Cape Town to Vladivostok, it requires a depth of experience and skills that it would be difficult to create from scratch at a new site.

"We have people from 40 nationalities working in Cherrywood, speaking 67 languages," he said. "It's a huge asset."

It's part of the reason that Ireland remains the heart of Dell's European business, building on an established set of skills to create new value-added products for clients.

Mr Hegarty sees the transformation taking place within Dell as part of the wider trend for Ireland as a country.

He says the growth that is happening today could not happen without the skills built up over 20 years.

"Over the years we have built up a huge knowledge of our customers, a breadth of business experience that means we can have a real input into customer needs," he said.

Solution centre

Evidence that this is more than just a neat line, is the establishment this year of a new customer solution centre in Limerick.

The centre is staffed by high technology architects and engineers and has been set up so Dell's big clients can go to Limerick to test out new technology and have solutions tailored to their needs. It's a world first, and there are plans for 21 more centres around the world.

In Dublin, a new research and development centre dedicated to cloud computing has been established.

"Cloud" is the move by companies to provide IT services remotely to business and consumers -- the way energy is supplied. It's seen in the industry as a chance to re-invent itself by offering long-term service contracts instead of one-off sales.

"If you are running a small business you don't want to be focused on the IT -- you want to be doing what you do best, Dell aims to provide everything you need for that," says Mr Hegarty.

It's a huge change from Dell's former no-frills computer in a box model. Cloud is still in its infancy, so having R&D in Ireland is a bet on the future.

Jobs in these centres mean high skills. Doctorates are not unusual, post-graduate degrees are typical.

It's good news for tech graduates, but a wake-up call for policymakers.

"Dell needs access to skilled, qualified people with talent. That is working at the moment, but policymakers have to look to the future,

Mr Hegarty says his role as a manager is to map the skillsets available to him to meet the future needs of the business.

He thinks the Government needs to do the same.

"It's about matching the requirements to the opportunities. With areas like cloud computing or R&D we have to ask if we are really starting in secondary school with the level of maths and language skills needed for the future?"

Mr Hegarty was a student at the National Institute of Higher Education (NIHE) under Professor Ed Walsh, when it became the University of Limerick.

Closer ties

He's enthusiastic about Walsh's approach of closer ties between education and industry, including through schemes like the "co-op" work placement with Digital that led to his own first "real job" after college.

Dell is playing its part through a number of IT initiatives in schools, he says.

The company pioneered the use of laptops in secondary schools in Limerick and is involved in a scheme to encouraging more girls to look at the sector.

His focus on having access to skills means Mr Hegarty is an enthusiastic supporter of Ireland's decision to let people come to Ireland to work right from the date of EU enlargement, when countries like Germany opted to delay entry rights for workers from the accession states.

Language skills

"That decision really drove the increase in language skills in Dublin," says Mr Hegarty.

For a man with European-wide responsibilities, he says the euro crisis takes up relatively little of his time.

His calm is partly because he's not convinced the crisis is as dire as some people suggest, based on the strength of the euro in the money markets.

"Look at the history of the euro and it has gone from 85c to $1.50, it's still close to the top of that range.

"We have a good treasury function and a good knowledge of how to manage currencies, we can hedge currency risk, but yes we would certainly welcome if the euro got a clearer direction.

"Ideally, we will continue to work with the single currency -- but we'll work with more if we need to," he says simply.

For Dell and for Mr Hegarty, the crisis is not being allowed to get in the way of business.

"Different parts of Europe have different problems and we're keen to understand them, but there are still lots of people and lots of businesses in Europe who are not Dell customers. That's the opportunity we're focused on."

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