Can the Dell XPS 15 be used as a desktop?

Curiosity: Did you buy this system used?  It's a 9560, which is now two model cycles behind being current.  This model came out in 2017 - so it's between 2-3 years old.

If it was represented as a new system, carefully verify the service tag with Dell -- it must have been sitting in a box somewhere for quite a while.  You may or may not have any remaining warranty.

If it IS a new system, consider upgrading it to a 3-year warranty if you won't be in a position to replace it (or fund an expensive repair) within the period of time you'll be using it.

@konarktriv  I used an XPS 15 9530 essentially as a desktop by keeping it on my desk attached to a full range of external peripherals for years and it was fine.  If anything your system will probably last longer overall since you won't be carrying it around as much.  When I recently got rid of it after 6 years it still looked practically new because when it's sitting on my desk with the lid closed, I'm not even touching it.

A docking station would certainly make life easier.  To power an XPS 15, you'd need either the WD19 w/ 180W power adapter (130W USB PD) -- not the WD19 w/ 130W power adapter (90W USB PD) -- or else the WD19TB, which comes standard with a 180W power adapter.  The regular WD19 uses regular USB-C, whereas the latter taps into Thunderbolt 3, which on this system gives it access to 4x more video bandwidth than the regular WD19.  So if your dual display setup is anything more than dual 1920x1200, or you might want to have the option of going higher, you'll need the WD19TB, which can handle dual displays up to 4K 60 Hz each or triple displays up to 1440p each.

The only thing I'll mention since you're working in engineering and moving from a desktop system is that "performance ultrabook" laptops like the XPS 15 tend to throttle performance after a while under sustained heavy load, especially with both the CPU and GPU active.  This is due to the simple reality that the XPS 15 has relatively power internals for a chassis of its size, and the cooling system that can fit into a chassis that size can't remove heat from the system as quickly as those internals generate it when they're running maxed out.  The only way to avoid that is to get a chunkier system that has room for more cooling, such as a Precision 7000 Series system or an Alienware system -- but obviously those will be larger and heavier, and more expensive.  Depending on the exact type of engineering work you do, this may or may not be an issue, but I remember that on my XPS 15 9530 if I started playing a game, I'd have a solid frame rate for a while, and then when my GPU reached a certain temp, it would immediately and dramatically reduce its clock speed, which presented as an immediate and sharp drop in my frame rate.  It stayed that way until temps dropped to another specific value, at which point it operated full speed again.  This connection between temp and clock speed was crystal clear when looking at temp and clock speed data that I'd been logging while playing the game.  But this isn't unique to the XPS 15.  The XPS 15's most direct PC competitor (really its only direct competitor) is the ThinkPad X1 Extreme, and it throttles too.  Like I said, it's just the physics of small cooling systems and fast silicon.