Feeds

EDS: IT outsourcing focus

2700 jobs will be lost

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

Electronic Data Systems [EDS] has announced that it is to change its strategy and recast itself as a unified IT outsourcing business. This comes at a time when companies are looking for quantifiable ways to cut IT costs. EDS needs to ensure close interaction with the client to improve services and guarantee customer satisfaction.

2,700 employees at EDS face losing their jobs as the company focuses on its core IT outsourcing business in an attempt to strengthen its balance sheet. The job losses will total around 2% of the company's global work force and the change in strategy will push EDS further into business process outsourcing.

EDS hope that the move will help to reshape the company into a unified IT outsourcing business and bring together its multiple lines of business. The restructure and asset write-downs are expected to cost EDS around $425-475 million in 2003, but it expects to save $230 million annually as a result of the job cuts.

EDS's decision to concentrate on its core outsourcing business seems to come at the right time. The weak economy has led to a strong focus on ROI and so the company's attention is turning towards solutions that can be implemented quickly and where the impact on profitability can be easily quantified. Many companies, burdened by numerous labor-intensive tasks and large, expensive IT needs, will increase their use of primarily offshore outsourcing, to help manage costs.

In the UK, the Inland Revenue failed to meet deadlines for tax credit payments and blamed EDS for the problems. It attributed the delays to "serious problems with the computer system" that was developed by EDS. It is expected that the Inland Revenue will confront EDS over non-performance of contract once the payments of tax credits is back on schedule.

To ensure its outsourcing business does not encounter any more problems, such as those with the Inland Revenue, EDS should encourage its clients to take a hands-on approach. The company needs to learn from the experience of a client's existing IT staff to help it become very familiar with the client's business processes and IT systems.

Beginner's guide to SSL certificates

More from The Register

next story
Ellison: Sparc M7 is Oracle's most important silicon EVER
'Acceleration engines' key to performance, security, Larry says
Oracle SHELLSHOCKER - data titan lists unpatchables
Database kingpin lists 32 products that can't be patched (yet) as GNU fixes second vuln
Lenovo to finish $2.1bn IBM x86 server gobble in October
A lighter snack than expected – but what's a few $100m between friends, eh?
Ello? ello? ello?: Facebook challenger in DDoS KNOCKOUT
Gets back up again after half an hour though
Troll hunter Rackspace turns Rotatable's bizarro patent to stone
News of the Weird: Screen-rotating technology declared unpatentable
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.