Dell CFO Tom Sweet explains how he coped with Dell-EMC merger

Mergers and acquisitions have a big impact on company finances, organisational structure, and culture. The CFO plays a crucial role in handling M&As. Dell acquired EMC in 2015 and the acquisition was completed last year. We asked Dell’s CFO how he is managing the merger of the two companies.

Photo Credit : Brian Pereira,

Tom Sweet, CFO, Dell

BW CIO World was invited to join a media roundtable interaction with Tom Sweet, CFO, Dell at the Dell EMC World 2017 conference in Las Vegas, USA this week. 

Excerpts from the interview:

Q. What impact has the merger had on finances? What have you done to reduce debt?

It obviously had a big impact on finances. We put $46bn of incremental debt on the balance sheet to fund the transaction. At the close of the transaction we had $57 bn of debt but have reduced that by $7.5 billion of core debt since then. We are on track in terms of deleveraging the balance sheet, which is our focus in the intermediate period of time.

We also made a decision that the legacy Dell software business, the legacy Dell pure play services businesses were better owned by a third party. We divested in our enterprise content business too. We continue to look at our assets to see what makes sense.

We are reducing cost in certain areas to reinvest in other areas, to reduce the overall footprint cost. 

That’s the balance you make. You can’t shut off innovation and R&D spend.

Q. In 2015 you set a target of $3 bn for business from India in two years. Have you achieved it?

We are still working on it and we will see how it goes. 

Q. What role does a CFO play in the digital transformation of a company? 

The primary responsibilities of the CFO is around capital allocation, strategy, enabling the CEO’s vision – I think the CFO plays a significant role in terms of investment decisions. 

How do you model an ROI around a digital transformation? You have to tie it to a business case. You have to rethink how those financial models work and are you willing to accept some level of risk. Not every investment you make is going to return what thought it would return. It’s a portfolio play. 

Clearly you want financial rigor of discipline; you want to allocate capital and resources to where you think your growth trajectory is. I think the CFO plays a significant role in that process along with helping drive the business models and the operating models of the company. 

The writer was hosted by Dell in Las Vegas, USA.

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