EDS Looks To Get Early Advantage In GM Services Bid

Feb 22, 2005 (11:02 AM EST)

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With at least $1.8 billion in annual revenue at stake, EDS isn't waiting for its top customer--General Motors Corp.--to name its new IT services vendors in 2006.

Instead, EDS is pushing ahead with a number of projects inside GM that it hopes will convince the automaker to renew most of its 10-year, master services agreement when it expires next year.

Among other things, EDS is building for GM a pilot project that would help move the company onto a common supply-chain-tracking system that would span all of the countries in which the automaker operates. "GM needs to be a globally consistent enterprise," said EDS VP Jeff Kelly, who manages the vendor's GM account. Kelly spoke Tuesday to a group of financial analysts in New York.

The supply-chain project uses a combination of commercial and custom software to extract data from supply-chain activities at GM facilities worldwide. That data would then feed up to Web-based "front-ends" through which GM executives could monitor supply-chain operations for operational areas such as vehicle production, fleet sales, and retail sales.

Two weeks ago, EDS also showed GM execs an electronic "global visualization" it created of GM's entire IT network. The visual model, which Kelly demonstrated at the analysts meeting, uses color codes to immediately identify an outage and "reports the correlation of IT events to business events."

The pilots are part of a larger effort by EDS to try to increase its annual sales to GM, which dropped to $1.8 billion last year from as high as $10 billion in previous years, Kelly says. "We have our eye on more than the $1.8 billion we currently enjoy," Kelly said. Frequent lobbying by top EDS executives is also part of its strategy. "We've had a lot of great meetings with them over the past four or five months," he said.

EDS's contract with GM expires in June 2006. The automaker is in the process of formulating new proposals that would outsource the bulk of its IT operations, likely to several major IT services firms. The contracts will be worth billions of dollars to the winning vendors. In addition to EDS, IBM, Accenture, and Hewlett-Packard will likely bid on portions of the work.