Electronic Data Systems
Electronic Data Systems (EDS) (NYSE: EDS, LSE: EDC) is a global business and technology services company that defined the outsourcing business when it was established in 1962 by Ross Perot. Headquartered in Plano, Texas, General Motors acquired the company in 1984 and then became an independent company again in 1996. In 2006, it employed 117,000 people located in 58 countries and reported revenues of US$19.8 billion. EDS is ranked as one of the largest service companies on the Fortune 500 list.
Company structure
In 2006 EDS sold their management consulting subsidiary company, A.T. Kearney, in a management buyout and retained interests in 4 [citation needed] related companies:
- , which offers human resources outsourcing services jointly owned by Towers Perrin.
- , which is a joint venture between EDS and Mubadala Development Company of Abu Dhabi. Its purpose is to provide IT and business process outsourcing (BPO) services in the United Arab Emirates, Qatar and Oman to the government, oil and gas, utilities, financial services, transportation, telecom and healthcare sectors.
- , which provides software solutions and services for the life insurance and wealth management industries.
- , which supports consumer lending products.
- MphasiS, A global IT and BPO services arm based in India.
Recent acquisitions
In November 2007, EDS announced it has agreed to purchase an approximate 93 percent equity interest in Saber Holdings, Inc., a leading provider of software and services to U.S. state governments, from various sellers, including majority shareholder Accel-KKR, for approximately $420 million in cash.
In March 2007 EDS acquired RelQ ltd, a premier testing company based in Bangalore, India.
In June 2006 EDS acquired a majority holding in MphasiS, a leading applications and business process outsourcing (BPO) services company based in Bangalore, India.
Revenue sources
For 2004, 56% of revenue came from the Americas (Canada, Latin America, and the United States); 27% from Europe, Middle East, and Africa; 5% from Asia-Pacific; 4% from A. T. Kearney; and 8% from "other", such as currency exchange, asset sales, etc.[citation needed] Services' revenue was: Infrastructure 52%, Applications Software 24%, Business Process Outsourcing 12%, A.T. Kearney (management consulting) 4%, and other 8%.
Locations
EDS operates in 60 countries[1], centered in the metropolitan areas of Dallas-Ft. Worth, Texas, Detroit, Michigan, Salt Lake City, Kentucky, Tulsa, Oklahoma, Boise, ID and Northern Virginia in the United States. Other major facilities are in India, Brazil, Mexico, Canada, Germany, the United Kingdom, Australia, New Zealand, Hungary and Spain.
EDS's Plano, Texas campus is located about 20 miles (30 km) north of downtown Dallas. The campus consists of 3,521,000 square feet (327,000 m²) of office and data center space on 270 acres (1.1 km²) of land. It is the center of the 2,665 acre (11 km²) [2] real estate development, which EDS built.
Company sponsorship
EDS is the title sponsor of the PGA Tour's EDS Byron Nelson Championship, played in nearby Irving, Texas. The tournament raises more than $6 million dollars each year for youth and family service centers in Dallas. From 1998 to 2001 EDS sponsored Derby County F.C., who during this time were members of the English Premier League.
EDS is also the sponsor of the Nobel Media and Nobel Web – organizations associated with the world’s highest recognition, the Nobel Prize. EDS will work with these Nobel organizations on technology solutions and education programs to raise awareness of the various Nobel Prize categories.
Services
EDS catalogs its services into three service portfolios which are Infrastructure, Applications and Business Process Outsourcing.[3] Infrastructure services includes maintaining the operation of part or all of a client's computer and communications infrastructure, such as networks, mainframes, "midrange" and Web servers, desktops and laptops, and printers. Applications services involves the developing, integrating, and/or maintaining of applications software for clients. Business process outsourcing includes performing a business function for a client, like payroll, call centers, insurance claims processing, and so forth.
Partners
EDS establishes a number of business alliances[4] with other companies in the . The alliances are grouped into three groups, Agility Alliances, Solution Alliances and Technology Alliances.
The EDS Agility Alliance has worked on a range of projects, notably it's Agile Enterprise[5] architecture, which EDS claims[citation needed] will be both cheaper to operate and more adaptable to business change. Members of the EDS Agility Alliance include Cisco Systems, EMC Corporation, Microsoft, Oracle Corporation, SAP AG, Sun Microsystems, Towers Perrin and Xerox.
Major clients
Most of EDS's clients are very large companies and governments that need services from a company of EDS's scale. EDS's largest client is General Motors, which accounts for nearly 20% of EDS's revenue. GM has plants in 32 countries, and EDS is one of a few IT services companies that can handle that kind of a client. EDS is attempting to cut GM IT costs by off-shoring some work to cheaper labor markets such as India, China, New Zealand, Egypt, Brazil, and Argentina.
EDS formed the National Heritage Insurance Company in 1996. The creation of this subsidiary is to manage Medicare Part B services on behalf of the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA). NHIC handles call center, claims processing and payment, fraud investigations, physician enrollment etc. in many states of the US.
Another large EDS client is the United States Navy. In 2000 , they won a contract for the creation of a US$9 billion intranet linking the Navy and the Marine Corps, which was set to late 2006, but on March 24, 2006 was extended to 2010, adding $3 billion to the accumulated contract worth. This initiative is known as the Navy Marine Corps Intranet, or simply NMCI. In 2004, NMCI accounted for about 4% of EDS's revenue. NMCI has been called the largest private network in the world, with approximately 400,000 "seats". EDS is providing the network, desktops, laptops, servers, telephones, video-conferencing, satellite transceivers, and overall management of the intranet[6].
Following on to the NMCI type of services, EDS in March 2005 won a US$4 billion contract with the UK Ministry of Defence[7] to "consolidate numerous existing information networks into a single next-generation infrastructure.... The network will provide seamless interaction between headquarters, battlefield support and the front line, linking about 150,000 desktop terminals and 340,000 users in approximately 2,000 locations...."
Of historical significance, just prior to the overthrow of the Shah of Iran, EDS was the IT company that developed the Iranian social security information system. During the 1979 overthrow, several EDS employees were detained by the transitioning government of Iran, causing H. Ross Perot to undertake extraordinary clandestine measures to get these employees out of Iran.[8] These events were recounted in Ken Follett's book .
Controversy
EDS drew criticism from the UK National Audit Office for their work on controversial IT systems for the Child Support Agency.[9] The implementation of a cross-service payroll system for the UK MoD has been problematic[10].
The performance of the system to administer Tax Credits for the UK Inland Revenue (now HM Revenue & Customs) was far lower than expected, resulting in payments failing to arrive for the thousands of low-paid workers and their families who needed these benefits.[11] This failure ultimately resulted in EDS being dropped by HM Revenue and Customs in favour of CapGemini and EDS settling with HM Revenue and Customs for £71 million. EDS argued that they should have been given much more time to test the new system. [12]
Leadership change
EDS announced on 19 July 2007 that its board of directors has unanimously elected Ronald A. Rittenmeyer, currently president and chief operating officer, as president and chief executive officer, effective September 1, 2007. Rittenmeyer was also elected to the company’s board of directors, effective immediately.
Michael H. Jordan, who has served as EDS’ chairman and chief executive officer since March 2003, will continue to serve as chairman and as an executive officer of the company, effective September 1, 2007.[13]
References
- ^ Locations, EDS Website
- ^ Legacy in Plano
- ^ Services, EDS Website
- ^ Alliances, EDS Website
- ^ Agile Enterprise, EDS Website
- ^ NMCI Overview, EDS Website
- ^ EDS-Led Consortium Signs Contract With U.K. Ministry Of Defence For Defence Information Infrastructure Project, EDS Website
- ^ Operation HOTFOOT, medicaid.state.ar.us
- ^ Private Eye 17 November 2007
- ^ EDS's RAF pay system struggles to take off, The Register
- ^ [1], The Register
- ^ [2], BBC News
- ^ http://www.eds.com/news/releases/3832/
External links
- Electronic Data Systems (official website)