Fresh from a financial restructuring last month, outsourcing vendor Electronic Data Systems Corp. is now pursuing a five-year, US$100 million plan to grow its business by standardizing its global call centers and support centers.
The new initiative, called Best Shore and unveiled Wednesday by the Plano, Texas-based company, is designed to help EDS have a "consistent delivery model worldwide," said Paula Kruger, president of the company's customer relationship management division.
Today, EDS has more than 250 centers where support is provided to customers around the world, although hardware, software and other services can differ from location to location, Kruger said. Many customers, though, have their own facilities around the world and require more service consistency from their IT vendors, Kruger said.
"We'll be looking at where are the optimal locations to serve clients, where they need it, when they need it -- and it's always going to be state-of-the-art," Kruger said. With EDS providing consistency, customers will be able to contract for services anywhere with EDS and be sure of getting what they need, she said.
"We see tremendous opportunity in this space, and we think that by doing this and making this investment, we will be the vendor of choice," Kruger said.
As part of the initiative, EDS will open new offshore service centers around the world. The first is set to open with 200 workers next spring in Mumbai, India -- a nation where many customers have asked for services from EDS. By 2004, the number of workers at the center is expected to grow to 700, Kruger said.
By standardizing on hardware, processes and applications, EDS hopes to gain cost savings from primary vendors that can be leveraged to keep EDS prices down for its own customers, she said.
Analyst Andrew Efstathiou at The Yankee Group in Boston, said EDS's standardization strategy is something that's been done at other service companies, including IBM and Bermuda-based Accenture Ltd. for more than a year. "Certainly, this type of coordinated delivery is not anything new," he said. "I would say EDS is promoting this ... because they need to control their costs and pricing as well."
Instead of focusing in changes in service delivery in recent years, EDS has been working to generate new business, Efstathiou said. "They've been very slow to change their business model," he said.
Michael Corbett, president of Michael F. Corbett & Associates Ltd., a consulting company in LaGrangeville, N.Y., said the move to standardize operations is a good one. "There's a lot of companies that are really just beginning to create that kind of global, free-flowing infrastructure that they really probably should have had from the beginning," he said. "But with all the various things that influenced their decisions, they never really built it that way."
Last month's restructuring announcement envisioned workforce reductions of 3 percent to 4 percent during the next several quarters, beginning with between 800 and 1,000 positions this year, and cost cutting of US$75 million in 2003. Also included is the shifting of at least 1,500 applications development and client contact center jobs to offshore facilities, including the 700 jobs slated for India.