After a rough year of layoffs, lawsuits and lacklustre
revenue, Electronic Data Systems officials say the worse is behind
them, and will expand the company's offerings with business
transformation services led by a management team made up of
ex-chief information officers.
Chief executive officer Mike Jordan, who took that job last March,
is spearheading the move. He has filled his upper management ranks
with executives to liaise with IT managers.
The 135,000-employee company sees future growth in helping
companies exploit and integrate existing systems and transform
their business processes, instead of simply operating systems for
clients.
By offering customers services to transform IT operations, EDS will
also challenge firms such as IBM or Hewlett-Packard that have
detailed similar approaches.
EDS officials said the company's strengths will be an emphasis on
open standards, depth of technical expertise and a relatively
agnostic approach to technology. The company claimed to offer
businesses "anything IBM can do".
"We're a little easier to work with and, we think, from a long-term
perspective, a better technical solution," said Jordan.
The EDS team put together by Jordan includes Charlie Feld, a former
CIO of Frito-Lay, Steve Schuckenbrock, who aworked for the Feld
Group and was a senior vice president of IT at PepsiCo, and now is
EDS executive vice president for global sales and client solutions;
and David Clementz, a former CIO and president of ChevronTexaco
Information, who is now an EDS executive vice president for service
delivery.
EDS intends to develop deeper relationships with a smaller number
of technology suppliers and have more of a "bias" toward certain
products in their customer recommendations.
"By tightening alliances with the Suns and Dells ... we're trying
to get a much better look ... into what's coming three or five
years down the road," said Schuckenbrock.
Microsoft was another company EDS officials said they want a deeper
relationship with.
EDS will build customer-centric models that are "made out of
reusable parts", said Feld. For instance, one customer may use
PeopleSoft and another SAP, but the business intelligence layer
andwWeb front can be similar for both ERP systems.
"They've taken a real important step in presenting a vision, in how
they are going to address customer needs - and they hadn't done
this before," said IDC analyst Traci Gere.
"No one is delivering on this to any degree beyond a few
exploratory customer relationships. Certainly EDS is a little bit
late to the game, but the game is just beginning."
"I think they are trying to rationalize their broad range of
offerings," said Gartner analyst John McCarthy. "Everybody is
coming out of this slowdown in IT trying to figure out, 'How do we
reinvigorate ourselves? What's our value proposition?'
"As the business is starting to recover, people are looking at
making investments, and EDS is no different."
EDS customer Joyce Phillips, the executive vice president of human
resources at the Canadian Imperial Bank of Commerce (CBIC), a
Toronto-based financial services firm with some nine million
customers, said she found the new direction reassuring. She said
the company offered "much more clarity as to where we fit as a BPO
in their strategic direction".
CBIC has outsourced its human resources to EDS.
EDS has previously announced plans to lay off 5,200 employees, or
about 4% of its workforce. Yesterday officials yesterday said they
would cut costs by 24% over the several years, in part by pursuing
a "Best Shore" offshoring strategy. Its latest quarterly earnings
are due next week.
In its third quarter, EDS last October posted a net loss of
$600,000, while revenue rose 6% to $5.24bn.
The company is also facing a class-action shareholder lawsuit,
which alleges that two former top executives knowingly
misrepresented company earnings and the health of the
multibillion-dollar Navy/Marine Corps intranet contract. Company
officials declined to discuss the contract.
Patrick Thibodeauwrites for
Computerworld