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 Head to Head
11 April 2008 | ITSM
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IT Outsourcing With EDS
A lot can be learnt from EDS's experience in the IT outsourcing industry, as ITP discovers in this exclusive interview with EDS CTO, Stan Alexander..

  Stan Alexander

Stan Alexander, Chief Technology Officer for EDS, took time out of his hectic schedule to meet with ITP Global to discuss the developments that have been made in the field of IT outsourcing, with a focus on the innovative contributions that EDS has made in this area.

EDS has been around for much longer than people think. I for one was certainly surprised to learn that the company was founded 45 years ago. What does this heritage lend to the company and its business today?

Today, EDS delivers a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, consumer and retail industries and to governments around the world. In some cases we are working with clients that are in their third decade as an EDS client.

When EDS started in 1962, people did not know or care much about computers. They were just beginning to see that the compilation and use of information by computers was the future of commerce. More than 40 years later, the world has caught on to what we meant when we said long ago, ‘Without information, nothing happens.’

In the 1960s, we did not necessarily foresee digital supply chain management or online grocery shopping. We did anticipate that information technology would fundamentally change people’s lives and the way enterprises and governments work. Through the decades, EDS evolved from this idea with one man, one US$1,000 cheque and one extraordinary vision to a $20 billion, global business leader with nearly 120,000 people who help clients solve their toughest business challenges through the course of time.

While information technology evolves throughout the world, the one constant we’ve always had is dedicated, passionate people. The people who accomplished EDS’ milestones were just regular folks, said President and Chief Operating Officer Jeff Heller, who was one of the company’s charter employees. “EDS has always been just ordinary people who came here and achieved more than they ever thought possible because of the opportunity and support they found.” Those ‘ordinary people’ pioneered concepts and practices that are now centerpieces of the IT services industry, including systems management, systems integration, centralised transaction processing, and the world’s largest private digital voice, data and video network. These ‘ordinary people’ continue to make EDS what it is today which is real people committed to solving clients’ problems and helping them succeed.

These 45 years of experience really helps us in our approach to SOA and what it takes to be successful. From the beginning, we have not just focused on how to develop and implement, but are very aware of long term issues such as added complexity, performance considerations and the potential higher total cost of ownership and management if done poorly. You don’t want to have a solution that costs you more to run than it did to build it.

EDS has a number of firsts in its history, ranging from ATM mechanisms to text analysis systems. This spirit of innovation, I assume, is part of the culture at EDS. How does this manifest itself on a day-to-day basis?

EDS believes innovation fuels continued productivity and growth. It’s about applying practical ideas to solve real business challenges, generate new products and services, or improve those in place to deliver results.

 EDS has a number of innovation programmes designed to assist clients and ourselves:

  • The EDS Fellows and Distinguished Engineers along with other subject-matter experts bring insightful and practical ideas that help us solve real-world business issues for clients
  • We have a number of large online communities that are tied to today’s business issues
  • We have created the EDS Agility Alliance that unites the best business-process from EDS and our technology partners to develop next-generation solutions for clients
  • EDS Top Gun is a total immersion programme designed to provide an intensive three month technical opportunity to nominated EDS senior level architects. The programme is an investment by EDS and it’s Alliance Partners in strengthening those alliances by providing an in-depth, focused program for participants
  • The Distinguished Engineering Programme (DEP) is a global programme designed to recognize and reward current employees who have demonstrated the ability to consistently apply technical expertise and create re-usable best practice products in EDS information technology or industry specialty areas, while engineering and building end-to-end client solutions
  • EDS has more than 500 awarded and pending patents available for use in its solutions for clients.
A few of our current examples come from Transport for London where we created an integrated ticketing and revenue system, including cashless payment Oyster Card which reduces fraud and improves travel efficiency for 8.5 million passengers travelling by bus, rail, underground, tramways and light railways covering nearly 5,000 kilometres in combined routes. We also applied virtual technology for the City of Anaheim in California to provide all police, fire, utility and city teams a single, integrated response portal. One click alerts leaders to an emergency, how many units are being dispatched and what other actions are being taken. On a daily basis, EDS works to bring insight that solves clients’ key issues so they can sustain a competitive edge.

You created IT outsourcing. Why has outsourcing held such a long-term attraction for businesses and why is it such big business today?

Outsourcing allows our clients to focus on their core business while allowing EDS to focus on the business of IT. Through our capabilities, industry knowledge, repeatable project management skills, leverageable platforms and global network, we can help clients maximise return on their IT investments. Our EDS portfolio is built around innovative offerings in application maintenance and development, business process outsourcing, and infrastructure, including desktop services, hosting, storage and networking. Our services are delivered on the EDS Agile Enterprise Platform. We use our next-generation global delivery system and EDS Best Shore strategy to ensure high-quality and cost-competitive services are provided from the optimal mix of onshore, near-shore and offshore locations. This enables our clients to respond quickly to changing market dynamics and increase their competitiveness.

The EDS Agile Enterprise Platform is one of your key solutions that can be tailored to a wide range of businesses and circumstances. How can an EDS client have confidence that such a solution can be adequately configured to serve its unique requirements?

The Agile Enterprise Platform is not a solution. It is rather a framework and a set of processes and best practices. It is network-based utility architecture that creates a flexible technology foundation to help globally 2,000 companies respond more quickly to changing market dynamics, realise significantly improved economics and increase their competitiveness.

 A key component of EDS Agile Enterprise Platform is the reference architecture and the choice of preferred partners to bring that architecture to life. Against this architecture, which serves as our technology blueprint, three major manifestations exist:

  • Microsoft .NET/Windows/Intel - For work portals, business intelligence applications and systems that need the most agility and innovation
  • Java/Unix tower - For solutions requiring durable transaction systems
  • z/OS - We continue to support this platform even though it is more expensive and has a less open legacy architecture
EDS’ platform is more flexible, functional, open and cost-effective than our competitors’ architectures. We believe our clients, over time, will see the benefits and to migrate to our platform and adopt it as their utility of choice, but we continue and will continue to support clients who choose not to adopt our preferred platform.

Measuring and defining the results of an IT service implementation are key issues for an IT manager who’s pushing for a new budget to spend on upgrading his or her company’s systems. What ‘after-sales’ service does EDS offer clients after handing over the keys, so to speak?

The complexity of managing IT service and application delivery on today’s fragmented platform mirrors the complexity of the platform itself. Companies typically can manage delivery only within individual IT domains and not end-to-end. There is no consolidated cockpit or, if there is, it comprises a large number of back-end systems that are manually integrated to provide facsimiles of a consolidated view. In reality, though, that consolidated view is fraught with missing data and provides limited means of dynamically altering the service delivery processes. For example, services that meet with congestion on the network, broken platform elements or other incidents simply fail.

To remedy this and create a more agile operational framework that supports faster, less expensive service delivery, companies must understand and apply the last decade’s tremendous advances in service management technology and design strategies. Industry standards such as the Infrastructure Technology Information Library (ITIL) and the Enhanced Telecom Operations Model (eTOM) provide powerful service management frameworks to standardise and simplify delivery processes.

Because EDS provides its clients with a wide array of services, it is particularly important that we are able to manage the combined services and provide our clients visibility into these services. EDS promotes an enterprise view of service delivery using our Enterprise Service Management system. The Enterprise Service Management system:

  • Drives standards-based practices, consistent tools and processes to increase productivity, sustain service quality
  • Processes and tools for each service deployed in standard operating environment
  • Enables integration and end-to-visibility of global operations
  • Improves speed and agility, facilitates rapid response
In turn, we are able to reduce the cost of their business processes while responding better and more accurately to impacts on service delivery. This process allows EDS to closely monitor service level agreements, response times and service requests. It also provides the client with the means to track and monitor service results.

EDS has contracts with clients as diverse as the US Federal Agencies, the 7-Eleven grocery chain. The European Space Agency and the Italian insurer Fondiaria-Sai. What individual demands have these types of business placed on EDS and what similarities have they shared, and what has EDS been able to learn from such a wide client base?

In order to support such a diverse customer base, our clients require that we have specialised industry knowledge that is tailored to their business. Our industry experts have developed industry frameworks that define what the future state looks like in each industry and the process needed to get there. We obviously also gain a great deal of industry knowledge directly from our clients. Working with them on a day-to-day basis, solving business problems gives us a keen perspective into types of solutions needed for a particular industry. However, EDS realises that every client is unique. Each client has a different set of objectives and is in a different place on the journey. EDS tailors solutions to meet the specific need of a client at that point in time. Although we may provide services to two clients in the same industry, we must apply our solutions based on their individual priorities.

EDS has found that most enterprises across industries have some of the same challenges. This is where we can apply our vast IT knowledge that has been obtained from our diverse client base. We have been able to take solutions originally developed for the communications industry and bring those to the transportation business. The EDS difference is in being able to take a solution and tailor it to a client’s specific industry-based need.

In addition, most companies today suffer from a disconnection between the speed of business and the speed of IT. Enterprises want to drive growth and fuel competitive advantage while containing costs and increasing operating efficiencies. Enterprises can no longer afford applications that go down, are rigid, expensive or not aligned with business goals. All of our clients are looking for:

  • An event-enabled, service-oriented, layered architecture. This does away with ‘request then reply’ data flow and instead provides automatic information feeds to the points of the organisation that need it, when they need it (for example, an airline delay triggers a number of automatic notification events)
  • A common network and narrow footprint. The network is scalable allowing the organisation to respond to capitalise on opportunities. Cost of maintaining various systems (maintenance, programming knowledge, etc.) is reduced
  • A single data source with defined data models. This allows the user to have one view of the customer
  • A system structured to support durable business processes. This creates an enduring system – one that operates more efficiently and effectively than legacy systems because it transcends today’s business
  • Simplified platforms that enable the CIO and IT organisation to be more responsive to the organisation’s needs
  • User-controlled business rules and tables. Since rules are not hard coded, the business can drive activities the way it wants to not the way the IT will allow it to (e.g., marketing creates store promotions without IT having to re-work existing systems or add new code which perpetuates the legacy mess)
In order to support these demands, a provider must have expertise in many different disciplines. Business challenges today are not solely around infrastructure, applications or a business process. It’s about seeing the total, holistic solution. EDS is uniquely positioned to provide our clients with a broad level of IT services combined with deep industry expertise.

Predicting future trends when it comes to IT and business is what keeps EDS at the cutting edge. Without giving too much away, what should businesses that are looking to invest and align IT in the next 12 to 24 months consider?

Today’s business environment is more complex. Increasing globalisation has introduced new opportunities and competitors. In the search for growth there has been extensive M&A activity creating increasingly complex heterogeneous environments. EDS’s transformation is based on beliefs of how business and technology will work together in a constantly changing global economy. We believe:

  • Business operations are 24x7 with self-service dominating the client experience
  • Globalisation will continue and innovation at the edge (mobile intelligent devices, embedded smart chips, radio frequency technology) will accelerate, changing competitive landscapes
  • Where, how, when and by whom work is performed will change
  • No single company can do it alone business ecosystems will dominate
  • 40 years of legacy environments won’t support the ‘global/edge’
Mainly we see a demand from business to have their IT services support the drive for agility. For a company, an agile enterprise means that they have the ability to quickly respond to a dynamic and highly competitive business environment. Enterprises need to be able to quickly bring new products and services to market on a global basis. We are now seeing a major shift in how IT is being asked to support these goals. In the last decade, the focus was around reducing IT costs. Today the focus is on realigning IT budgets to support growth initiatives, essentially making the enterprise more agile. Because of this, EDS believe that modernisation will be the challenge of the decade.

We are also seeing the convergence of many disciplines as technology explodes. Today, we are seeing the convergence of entertainment, technology, news, music, video, etc. The industry is no longer concerned about monolithic IT services that support one business function. Our services need to support and facilitate the intersections of many functions. In healthcare, for example, we are seeing the convergence of doctors, patients, hospitals, pharmacy companies, infrastructure, applications, payments, and authorisations, instead of thinking about claims, processes, or any one piece. It’s a very different time than business as usual.

EDS signed a deal to overhaul the IT infrastructure of the prisons system in the UK. Given the recent checkered history of large public sector IT projects, chiefly the ongoing NHS debacle, how will EDS approach this contract to avoid falling foul of the same problems?

Without speaking about specific clients too much, we strive to service all of our clients in the same fashion. Whether we are helping them in consulting, development, implementation, integration, management or staff augmentation, EDS strives to become a valued part of the client management team rather than just a vendor.

We are continuing to drive improvements in our base business by:

  • Fully leveraging our market-leading ITO platform with our Global Delivery System as a differentiator
  • Continuing to be responsive/quality-driven organisation with a zero-outages mentality and accountability mindset
  • Building and enhancing our applications business; moving into more sophisticated applications by helping clients develop and modernise their current applications structure
  • Capitalising on our significant Best Shore and remote infrastructure management capabilities
  • Creating industry-enabled solutions that combine a competitive IT infrastructure with applications expertise and BPO capabilities, all to deliver more value to clients


Charles Wilson Email to a colleague | Add to MY ITP

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