InformationWeek

Digital Signs Outsourcing Deal With EDS

By Marianne Kolbasuk McGee

ervic es are big business for Digital Equipment Corp. But the $500 million, eight-year outsourcing contract the company signed last week isn't with a client. This time, Digital is the customer.

In a pact with EDS, Digital has outsourced the restructuring and administration of the back-office operations supporting Digital's multivendor support business. Those operations include billing, order processing and fulfillment, sales quotes and pricing, and pre-order and post-order services. Digital employees will continue to provide the actual technical services offered to customers.

Digital says it signed the deal in order to increase efficiency and improve customer service. "We want to raise customer satisfaction," says Bob Good, Digital's VP of multivendor services administration. "By outsourcing the administrative activities to EDS, we are teaming up with a company that can do these operations better, while we focus on our core competencies."

Good says Digital wants the transition to be "transparent" for cu stomers. "Services should improve," he says. "Doing business with us will become easier."

To help ensure that it does, EDS will be paid based on measures of process efficiency, customer satisfaction, and other factors, Good explains.

As part of the arrangement, EDS's business reengineering unit, A.T. Kearney, will help to revamp the business processes and, ultimately, the IS infrastructure that supports Digital's multivendor services, an EDS spokesman says. No decisions have been made on product platforms to be deployed in the restructuring.

The pact with Digital is the largest contract EDS has signed in recent months. The EDS spokesman says the service provider is bidding on 17 megadeals collectively worth $28 billion that are expected to be signed by the end of 1998.

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