A New Nimbleness
In the late 1990s, Electronic Data Systems customers had been complaining about service, and the company’s net profit margin slid from 8.5% in 1993 to a sickly 2.3% in 1999.
Clothing retailer J. Crew went to EDS for its data center, but not for other services. “I certainly wouldn’t go to EDS for a point-of-sale or cash-management system,” says Paul Fusco, J. Crew’s chief information officer.
Some CIOs say other outsourcing companies such as Accenture are stronger at application development and support than EDS. One EDS client, Blue Shield of California, suggests that the outsourcing vendor wasn’t the best bet for purchasing and installing desktop systems.
Instead, Blue Shield of California decided to negotiate a deal with Dell Computer on its own. “Now EDS is responsible for installation once the Dell equipment arrives.” says Dave Bowen, CIO of Blue Shield of California. He continues to work with EDS to reduce the number of LAN servers in its network.
EDS’ biggest challenge: Unlike IBM, it doesn’t have its own products to sell to customers. As a services-only outfit, the company has lost some major deals—including a recent $7 billion-plus contract with Fiat—to IBM, which is known to offer discounts on its hardware products. Like other outsourcers, EDS is striking up strategic alliances with Sun Microsystems, Cisco, Microsoft and other hardware, software and networking vendors so that it, too, may cut broader and more financially competitive deals.
5400 Legacy Drive, Plano, TX 75024
(800) 566-9337 www.eds.com/services_offerings/so_home.shtml
Ticker: EDS
Exchange: NYSE
EDS Information Solutions Employs: 77,000
EDS, as a Whole, Employs: 126,000
Douglas Frederick
President, EDS information solutions
Frederick joined EDS as EVP of U.S. operations in July 1999. He worked at Baan for two years, and held a number of posts at Boeing over 18 years. He has a B.S. from Washington State University and an M.S. from the Massachusetts Institute of Technology
Stuart Doyle
VP, Delphi account
John Brunet
VP, global operations
Joe Sindelar
VP, marketing and portfolio management
Al Edmonds
VP, U.S. government account
Services
Web and application hosting, data storage, midrange and mainframe management, application development and management; management of hardware and applications for employees (Managed WorkSpace); management of corporate servers and networks (Managed WorkPlace); desktop support for small- to medium-sized clients (Managed Utility); network infrastructure for voice, data and video (Intelligent Network Foundation Solution); and other network services
Competition
IBM, Computer Sciences Corp., Perot Systems, Affiliated Computer Services, Compaq Global Services, Daimler-Benz, Sabre Group, Fujitsi, Siemens, Singapore Computer Systems
Reference Checks
U.S. NAVY
Joseph Cipriano
Program executive for information technology
(703) 602-2975
Project: Outsourcing of technology infrastructure including WANs, integrated voice-video data and office automation systems
J. CREW
Paul Fusco
CIO
(212) 209-8500
Project: Full outsourcing of technology infrastructure, data centers
WEYERHAEUSER
Thomas A. Ped
VP, IT
(253) 924-2345
Project: Seven-year contract to outsource infrastructure including network, desktop and server management, mainframe and help desk services
BLUE SHIELD OF CALIFORNIA
Dave Bowen
SVP/CIO
(415) 229-5985
Project: Outsourcing of mainframes,
servers, LANs and desktop support
KELLWOOD
Don Riley
CIO
(314) 576-3100
Project: Full IT outsourcing, including application support and development, mid-range infrastructure and desktop support
DOW CHEMICAL
Darryl Zavitz
Business IS director for global styrenics and engineered products
(411) 728-2307
Project: Ten-year contract for primary infrastructure outsourcing
CONTINENTAL AIRLINES
Janet Wejman
SVP, CIO
(713) 324-5000
Project: EDS customer since 1991, outsources infrastructure services, such as data center
EARTHGRAINS
Steve Brazile
CIO/VP of business systems
(314) 259-7000
Project: Outsourc-ing of IT infrastructure since October 1996. EDS currently maintains about 60 IT staffers on siteat the Sara Lee subsidiary
