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EDS realigns units

EDS realigns units

Electronic Data Systems (EDS) is reorganising its three largest business lines in an effort to win IT business away from the Big Five firms.

EDS said Friday it will dissolve its Information Solutions, E Solutions and Business Process Management units and reconstitute their elements into two new internal organisations, Operations Solutions and Solutions Consulting. The changes will take effect April 15.

EDS clients shouldn't experience any disruptions as a result of the reorganization and will benefit from the company's increased integration, said spokesman Jeff Baum. The moves are intended to better align EDS' capabilities and improve its positioning within the services market, according to the company.

"There are two very hot spaces in the IT service market that we are putting more resources behind: business process outsourcing and solutions consulting," Baum said. "This gives us a set of offerings that puts us toe-to-toe, head-to-head with the Big Five."

EDS also sees an opportunity to grab share in a shifting market.

"Right now, there's a lot of people who don't want to do consulting work with their accountants. We're going to go after that," Baum said.

The Big Five accounting firms are feeling pressure to stop providing services, such as IT consulting, that aren't related to their core auditing services. Critics contend that accounting firms get into conflict of interest situations when they sell certain consulting services to clients that they audit. This issue is now in the spotlight because Big Five firm Arthur Andersen audited and also sold consulting services to Enron Corporation, whose accounting practices are the centre of its bankruptcy scandal.

Operations Solutions will encompass EDS' mainstay IT outsourcing operations, which include the work previously done under the Business Process Management unit's umbrella. That division handled outsourced business transactions, such as financial transactions and health care claims processing, along with CRM functions such as call centres.

EDS' new Solutions Consulting will absorb E Solutions' IT consulting, systems development and implementation services and combine them with EDS' applications development business, the company said.

There will be no layoffs directly related to the reorganisation, according to EDS spokesman Jeff Baum.


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