EDS wants to capitalize on the growing number of big companies that want to contract out back-office functions.
EDS has created a business-process outsourcing unit in order to capitalize on the growing number of big companies that want to contract out back-office functions such as billing, payroll processing, and call-center management.
Business Process Services will sell services, of course, but it will also develop technology to help businesses manage the outsourcing process. Industry watchers say it's a good move. "If they want the BPO market to grow, then service providers like EDS are going to have to increase their capabilities in terms of what they can deliver," says Mark Toon, CEO of consulting firm Equaterra, which helps businesses select and negotiate with outsourcing partners.
Business-process outsourcing is one of the few growth areas in what of late has been a languid services market. Industry analyzer IDC says the $177 billion market for such services will grow at a compound rate of 9% to 11% through 2005.
It's not coincidental that EDS is also crowing about new contracts with Dow Chemical, American Cellular Wireless, and Wanadoo, the Internet division of France Telecom.
For Dow, EDS will extend the services it's providing to cover Dow's Customer Information Group call center and Retiree Service Center. In a four-year deal with American Cellular, a joint venture between Dobson Cellular Systems and AT&T Wireless, EDS provide contract-settlement services. Under a six-year deal, EDS will provide CRM and call-center-management services to Wanadoo's Spanish subsidiary. Financial terms of the deals were not announced.
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