EDS looks to rejuvenate with corporate reorg

Looking to position its far-flung resources to jump-start its professional services business, Electronic Data Systems (EDS) has redrawn its blueprint around a four-pronged structure.

Under the reorganisation plan, announced last week in the US, EDS has formed a quartet of business units: A. T. Kearney, E.solutions, Business Process Management, and Information Solutions. The worldwide units will coordinate their efforts, according to EDS officials.

The services giant is in the process of informing its rank-and-file forces of the changes, which will be implemented beginning next month, according to company officials.

The changes, according to officials, are intended to present a simpler face to customers, spur the development of expertise, and provide better career development options for its employees.

The moves come as EDS tries to regain some momentum in the wake of relatively flat performance, particularly in the US market, according to Cynthia Doyle, an analyst at IDC.

"EDS only had 3 per cent growth in the U.S. last year. The company wanted to be better organised in terms of facing the clients. I think it's a good organisational structure for presenting such a broad company," Doyle said. "Also, part of their focus is on developing repeatable solutions, which will increase efficiency and bring down some of their costs."

The EDS E.solutions group, which was launched earlier this year, takes aim at what officials claim is a $US120 billion annual solutions consulting market for electronic business, spanning internet and enterprise applications. The unit will be headed by EDS president, John McCain.

Splitting off from the E.solutions group is the Business Process Management (BPM) unit, which will address such functions as customer relationship management, claims processing, and settlement processing. Company officials assess this segment of the market at more than $US130 billion. This unit will be led by Kim McMann, previously president of the company's state business and state health care business unit.

The third leg of the new structure is the A. T. Kearney business unit, which EDS describes as the No. 2 player in the $US25 billion-to-$US35 billion consulting market. A. T. Kearney handles strategic, operational, organisational, and information technology consulting and executive search services, according to EDS, which announced that Fred Steingraber will remain the unit's CEO.

The fourth EDS business unit is Information Solutions IT services group, which vies for a share of the more-than $US110 billion market, according to company estimates. Recent hire Douglas Frederick will direct this group.

To cultivate expertise and build-up a knowledge-base available to the four units, EDS is also establishing a cadre of industry experts.

In addition, EDS will implement a system of client executives, assigning a single executive to maintain a given customer relationship, according to company officials.

"For every engagement, they will pull from each of the units, and their experts, but the customer won't have to be concerned with that, since it's the main account executive's job to pull it all together," Doyle said. "The key is collaboration. They don't want to be organised into silos. It's a question of how well they execute."