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by David R. Brousell, MA Editorial Staff   | Abstract: | IT services provider EDS has succeeded in retaining a big portion of its GM business, but its future will rely more on the fruits of its own transformation. |
Champagne corks popped almost endlessly at EDS when it was announced in early February that it had won a giant systems integration contract from General Motors. The euphoria was so great over the deal, worth $3.8 billion over five years, that EDS even stationed two GM luxury cars at the entrance to its sleek headquarters building in Plano, TX, to symbolize its pride in winning the GM business. The victory was the result of a two-year all-out effort by EDS to win the GM contract. And EDS had to do it the old-fashioned way -- it had to earn the business in competition with other firms. Now, that may seem normal for any company, but it isn't for EDS. Industry history buffs will remember that in 1984 GM acquired EDS and made the professional services firm its in-house IT services provider. EDS became independent again in 1996 and that same year signed a 10-year master services agreement with GM that is due to expire in June. But the looming end of the contract posed a major challenge for EDS. Could it retain a major portion of the GM business when for the first time it had to compete against the likes of IBM, Hewlett-Packard, and Capgemini? Led by VP Jeff Kelly, EDS did just that. It won nearly 65% of what GM put out to bid. [Click to continue] |