You require an EPS12V power supply and the CX600M is not sufficient.  A CS750M would be minimum recommended.

* The windows executable A10 bios is here:
http://ftp.dell.com/FOLDER02722955M/1/XPS_8700_BIOS_A10.EXE

* Download/Save the file to the windows desktop

* All older XPS 8700 bios are here (A01, A03, A04, A06, A08):
http://downloads.dell.com/published/pages/xps-8700.html

* Disconnect any external hard drives, keys, printer, scanner, etc. You only want the USB mouse, USB keyboard, LAN, monitor connected

* Before running A10, boot into the bios to see what version you have now. I think it is always better to install the others in order before installing the latest one

* Run the executable

* Allow the system to complete the installation and restart automatically. Do not force a restart or power off

960 970 980 also requires Bios update to work.

http://www.newegg.com/Product/Product.aspx?Item=N82E16817139061

Is an EPS12V power supply truly required for this situation or just a recommendation? If it is required then may I ask why?

EPS 12v 2.92 Guarantees 15 to 25W aka 3 to 5 AMPS VSB,  170W on the 3.3v/5v lines, and the rest is 12v with single rail that goes OVER 18 amps.   AKA  3x 12v 18 amps aka 54 amps which is 648 watts.  ATX is limited to 10W aka 2 AMPS on VSB and 18 Amps on any 12v Rail.   There is reality distortion going on with PSU vendors.  If you add up all the maximums on each rail a 650w power supply is putting out almost 1000w. The other way to put it is 648 + 170 + 25 is 843W.  Dell does not overstate the ability of their power supplies.This is also why the 305W dell is as good as a generic 400W.

The supply below claims 552 + 150 +3.6 + 12.5 which is 718.1 W
 Problems come in with 5VSB gets short changed or 3.3v gets short changed the machine may fail, show blinking amber Power LED, and or may not turn on at all due to insufficient power.

NOTE the 5VSB below is 4 AMPS (NOT 2.5 as above) aka 20W on a Dell 525W power supply.

You do not have to replace the power supply if you do not want to at this point.  Running that card stock should work fine with the included power supply.  What needs to be remembered is that the GTX970 and 980 both draw less power than video cards that were originally spec'ed by Dell for the XPS 8700.  If you want to upgrade the power supply it is not a terrible idea and there are a variety of PSU's that will fit.  If you decide to replace the PSU make sure you get one that is not to deep.  I am successfully using the Corsair CX750M and it fits very nicely.  The CX750M is the only unit in the Corsair CX line that I would recommend.  There are other brands that are also quite nice but finding a size that will fit in the Dell case is a challenge.

so i can really install a gtx 980 in my pc without any problems or is it to big too fit in and will it break my components

You do not have to replace the power supply if you do not want to at this point.  Running that card stock should work fine with the included power supply.  What needs to be remembered is that the GTX970 and 980 both draw less power than video cards that were originally spec'ed by Dell for the XPS 8700.

This is absolutely incorrect.  The highest end graphics card that Dell has tested and recommends in the XPS 8700 is the GTX 660, which according to Nvidia draws 140 watts.  The GTX 970 draws 145 watts, and several users who have run the 970 with the stock power supply have had the supply fail.  There is no way you want to run the GTX 980 (draws 165 watts) with the stock power supply.

As far as size, it really depends on the specific card, since they can range from large (10.5") to humongous  (12.5"). 

The GTX 970 draws 145 watts, and several users who have run the 970 with the stock power supply have had the supply fail.  There is no way you want to run the GTX 980 (draws 165 watts) with the stock power supply.

I too am in the camp that the OEM PSU is not sufficient for a GTX 970, even though some are getting by.

overclocked GTX 970s can draw more than 145 watts at peak, and there are transient spikes that are reported to go well above that.

http://www.techpowerup.com/reviews/MSI/GTX_970_Gaming/25.html shows 192W as a peak during metro last light at 1080p.