Schaefer Brewing Company, for whom EDS operated a data processing facility, contributed to the slowdown of revenue growth in the mids. Schaefer claimed that the EDS data processing system was inaccurate and deficient, resulting in inadequate and misleading information. These kinds of lawsuits would continue to plague EDS to the end of the 20th century.
In the company began to aggressively pursue overseas business. A few employees remained, hoping the chaos would be resolved. Since diplomatic channels seemed closed, Perot took direct action. Although Gaylord and Chiapparone actually left the prison on their own when a rioting mob released all the inmates, they needed the EDS team to get them out of the country. In the mids, EDS began a shift away from facilities management, since many companies were becoming interested in running their own data processing systems.
In Meyerson became president, while Perot continued as chairman of the company. Under Meyerson, EDS diversified its business interests through acquisitions of turnkey systems for hospitals, small banks, and the small business field. The bulk of EDS business still remained in facilities management, with processing of healthcare claims a large percentage of the business through the s and into the s.
Always moving with the times, EDS became a systems integrator, sending in teams of experts to connect and coordinate a company's entire computer system, software, and telecommunications.
Army's computerized administrative facilities and to build a network connecting 47 bases across the United States. The biggest contract in the information services industry at the time, the landmark agreement signified the start of the large systems integration market.
Roger B. Smith, GM's chairman of the board, thought Perot's management style would be an asset to his giant corporation. Problems surfaced within a year when the differences in management style between Perot and Smith became evident.
Perot is a self-made man and iconoclast used to calling his own shots Smith [is] a product of the GM consensus-by-committee school of management, never an entrepreneur. EDS saw revenue increases as the result of the GM purchase. By , personnel had grown to 44,, almost triple the number from EDS also branched out into telecommunications and factory automation. Although EDS revenues increased substantially, profit margins fell to 5. GM preferred contracts which stipulated a certain percentage for profit; EDS, on the other hand, wanted to continue the fixed-price contracts it had been using since inception.
Additional problems arose as the result of the differing company cultures. Meyerson also resigned. At that time, Lester M. Alberthal, Jr. He had joined EDS as a systems engineer trainee in In June , he was named chairman of EDS. Under Alberthal's leadership, EDS broadened its customer base and reduced its dependence on GM-generated revenues from 70 percent in to 55 percent in Revenues climbed to new highs.
The company diversified, moving into energy, transportation, communications, manufacturing, and other new areas of business. Diversification included further expansion of international business. Administration of the company was reorganized through a leadership council, to spread responsibility and authority for daily operations to lower levels of the EDS hierarchy and allow the top executives to focus attention on development of long-range strategy. The ,square-foot facility served as the heart of EDS's extensive worldwide communications network and information processing centers where voice, data, and video transmissions travel to their destinations via state-of-the-art media.
The center was the hub of operations for 15 North American and six international Information Processing Centers, allowing EDS to respond immediately to the needs of its thousands of customers, who were then able to take advantage of the leading edge of information technology. Throughout the years, EDS contributed to the community and the nation as part of its company policy. Robert D. Ballard, the scientist who discovered the wreck of the Titanic in EDS provided satellite links and solved technological problems to ensure the success of the undertaking, created an Education Outreach Program for the communities where the company was located, and "adopted' several public schools and worked with teachers to help improve the quality of education.
In the early s, the company won a string of big computer services contracts with regional and super-regional institutions in the banking industry.
The company also discussed a merger with Sprint Telecommunications, and though nothing came of the talks, they were prescient of the convergence that occurred between telecommunications and computing over the next few years.
In addition, the company began working with Hong Kong-based CargoNet, a company which provided a comprehensive trade and transportation communication network designed to handle millions of trade-related documents each year, beginning a total transformation of the traditional trade cycle, using electronic commerce and logistics services to support Hong Kong trade and transport companies.
Some of the subsidiary's products included Post Paint an application which reduced "paint crawling,' an animation problem which occurred when restoring animated films that were more than 20 years old in which the paint on individually painted frames tended to smear , Post Camera which simulated a camera move after film had been shot , and Post Rez which improved film resolution and produced a sharpness to the picture. In June , the company was spun off from GM and became an independent company once again, triggering two years of restructuring, including related costs.
The company struggled with a string of disappointing quarterly performances for a time, and the stock dropped to nearly half of what it had been trading at a year previously before bouncing back.
In addition to a division pursuing multinational banking contracts, headed by Stephen R. Bova, the reorganization also spawned three other divisions--community banking, U.
Reddy, respectively. Early in the year, Rolls-Royce, one of the world's leading providers of aircraft and helicopter engines, engaged EDS and its management consulting firm, Kearney, and charged them with three goals: improve customer service, increase quality, and achieve significant business improvements. EDS created a "CoSourcing' relationship and improved many of Rolls-Royce's core business processes, including external purchasing, project management, product development and manufacturing, and information-handling and support systems.
Rolls-Royce's U. By over 70 percent of the automated teller machines ATMs in the United States were manufactured by the company, making EDS the nation's leading designer and supplier of such.
Early in , the company began working with Italy's Ministry of Education to help update their information technology infrastructure and help decentralize power and responsibilities from central government to peripheral offices.
In December , Richard H. Also at the end of December, Vice-Chairman Gary Fernandes, a veteran EDS executive, retired, leaving industry analysts concerned about turnovers at the top of the company. The arrangement would couple EDS's industry knowledge and consulting expertise with NCR's data warehousing capabilities. Such deals, coupled with a continuing emphasis on employee training and customer service, virtually guaranteed EDS's prominence within the information technology industry.
Principal Subsidiaries: A. Of the eight agencies we contacted, all but one, Virginia ' s Department of Medical Assistance Services, indicated that their experiences with EDS were generally satisfactory. The U. Department of Education indicated some initial problems after EDS took over a contract from another company, but reports that those problems have been resolved.
Under the terms of the court settlement, department staff are unable to discuss their experience with the contractor. In discussions with other agency personnel, several raised certain issues as well as concerns that might come up with an information technology IT contract as large as the one we described in Connecticut. In at least a couple of interviews, EDS clients mentioned their need for better documentation, reporting, and accountability.
They questioned whether EDS has an adequate staff to handle such a large job, in connection with lapses in deadlines and responsiveness on their projects. The company describes itself as a professional services company, helping companies and governments throughout the world use information and technology. It is currently located in Plano, Texas and has been publicly owned since Founded by H. Ross Perot in , the company was purchased by General Motors Corporation in and sold, becoming independent again, in It has approximately , employees.
Besides its private sector business, EDS works with governments and public sector agencies worldwide. More than 11, of its employees work in its government sector in 18 different countries. Some of the clients listed on the company's website appear below, categorized by governmental function.
Global Government Services. Federal Services. Department of Defense. Department of Education. National Aeronautics and Space Administration. Immigration and Naturalization Service. Department of Defense Health Affairs. Social Welfare. Tax Administration. Federal Aviation Agency. Given the list of the government entities listed above, we set out to gather information from those 1 with experiences similar to what the proposed contract here will include and 2 were feasible to contact.
Other than the South Australia contract, these do not approach the scope or value of the one proposed for the privatization of executive branch information technology services being negotiated with the company here in Connecticut.
When assessing the value of the experiences recounted below, it is important to keep in mind that our contacts may 1 not have negotiated the EDS contract for the particular governmental entity or even worked there at the time , 2 not been privy to the problems that arose during certain contract stages, 3 be paid by EDS, 4 work closely with EDS employees, or 5 have some other subjective reason for commenting as they did. South Australia. The company took over the operations at about 80 different government agencies in a state with a population of about 1.
By the end of , EDS employed a total of about people to work on the state contract. In addition to performance of the state ' s IT functions, the project was intended to expand the local IT industry and generate economic development.
EDS ' economic impact is derived from its spending for products and services in the local IT market. We are attempting to contact the SA Minister of Information Services and will forward the response to our inquiry on their experience with EDS if and when we receive it. Virginia Department of Medical Assistance Services. Under the terms of the Settlement Agreement dated August 7, ,. EDS turned over equipment and the rights to certain software.
Both parties agree to release only neutral or positive past performance information to any entity or person requesting such data relative to performance of the other under the Contract. Both parties agreed to terminate the Contract effective April 22, City of Charlotte North Carolina.
The city contracted with EDS just over three years ago to register residential and commercial alarm systems and to track them for false signals. EDS assumed all of the administrative duties related to commercial and residential alarm systems, like registering residents, designing and providing registration forms, billing, sending demand letters, and collecting fees.
Under the new system, residents and businesses agree to pay a fee if they have more than two false alarms a year. EDS keeps this fee as compensation; the City of Charlotte does not pay the company. According to Police Sgt. Whitt, who is paid by EDS to conduct a hearing in cases where a false alarm fee is contested, states that the city has had a wonderful relationship with the company.
Specifically, EDS has 1 abided by the city ' s commitment to hire minority and women contractors by contracting with members of these groups for supplies and printing, 2 met all contract deadlines, 3 responded quickly to problems, 4 made their professionals readily available, and 4 reduced the number of false alarms. During the first year, the number of false alarms dropped from 95, to 77, This number dropped to 63, in the second year but rose slightly to 67, in year three.
The police department calculates the city ' s savings as 12 people plus equipment a year. Massachusetts ' Registrar of Motor Vehicles. Massachusetts ' Registrar of Motor Vehicles contracted with EDS in to build an automatic licensing and registration system. Although McConnell did not work for the department in he started in , he believes that EDS delivered the product on time and with the right specifications without using state employees or subcontractors to meet its contractual obligations.
According to McConnell, of the people in Information Services, 55 are EDS employees, 25 are state employees, and the remainder work for various other vendors. McConnell believes that the contract has resulted in savings to the state. To support his belief, he cites the fact that they are able to complete over one million registrations per day electronically compared to the small number they could complete if they operated manually.
California Welfare Case Management System. Since , California ' s In-Home Support System Bureau has contracted with EDS to provide a payroll, management information, and case management system for people providing in-home support services.
The bureau has rebid the contract twice since , once in and , and each time awarded it to EDS. The person we spoke to, William Schimeck, negotiated the contract. EDS does not use state staff to provide contracted services state staff manages the contract but it does use subcontractors to provide maintenance.
Schimeck found it difficult to say whether the contract resulted in any savings. Prior to , counties were responsible for providing in-home services. In the legislature, siting deficiencies in the various county systems, required the state to take over provider services.
Instead of providing the service, the department contracted with EDS. Although Schimeck reports that the department has a fairly good relationship with EDS, he cautions that given the size of our contract, the state should question whether EDS has sufficient staff to handle the job.
EDS hired consultants to complete the department ' s work.
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