Global Takeover
EDS is arming itself for international expansion.
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EDS Inc.'s CRM division is hell bent on world domination. And Paula Kruger, manager of CRM at EDS, is leading the charge. Kruger says the company wants to be "recognized in CRM as the dominant outsourcing provider for both large and mid-market companies." Currently, EDS's CRM division--with 15,000 employees and $1 billion in annual revenue--is mostly providing outsourcing services to companies in the mid-market space. However, the Plano, Tex.--based company is taking aggressive steps to expand into more multinational businesses. Kruger says EDS is continuing to work with and support businesses that are expanding operations into other countries. It is also specifically targeting existing multinational companies. In addition, Kruger says she has gotten the green light to expand global resources. She declined to comment on the specific dollar amount that will be invested, except to say that it "is significant and includes investments in systems, facilities, and people." Kruger says EDS is in a good position to achieve its goal. The company boasts more than 140,000 employees in 60 countries, more than 35,000 business and government clients around the world, revenues that reached $21.5 billion in 2001 (with more than 40 percent of that coming from outside the United States), and total contract signings of $31.4 billion in 2001. "We are already a global player," she says. "There are very few companies that can help clients have a consistent set of standards and procedures across all countries." EDS is going up against the Big Five of consulting along with PwC and IBM to help businesses solve complex global implementation and integration issues for applications and business processes. These issues have become far more difficult when attempted globally, especially since there are privacy laws and local regulations that come into play, industry watchers say. The U.S. is currently EDS's biggest CRM market, followed by Europe/Middle East/Africa (EMA). Latin America is third, with Asia/Pacific next. Kruger expects the largest growth over the next year to come in EMA. Kruger says EDS is not going to be satisfied with increasing at the same rate as market growth rates, and believes EDS CRM can grow faster. Market researcher IDC projects that worldwide CRM revenue will reach $14 billion by 2005--in large part due to a steady stream of new products, companies, and technologies. According to IDC, North America still dominates the CRM market; it expects the region to ring up $8.6 billion in revenue in 2005. However, companies in Western Europe are catching on to the benefits that these applications provide, says Mary Wardley, program director of IDC's CRM Applications and eCommerce Applications Software programs. CRM revenue in Western Europe likely will increase by 22 percent over the next four years, she says. Boston-based market researcher Aberdeen Group says that worldwide CRM spending will grow by 2 percent to reach $13.7 billion by the end of the year. However, in 2003 CRM spending will resume double-digit growth, and it should close in on $20 billion by 2005, according to Denis Pombriant, managing director of Aberdeen's CRM practice. Gartner Dataquest reported this spring that the global CRM services market totaled some $22 billion in 2001, a 10.6 percent increase from 2000 revenues of $19.99 billion. The growth of the software-as-a-service model has had an impact on declining levels of spending on licensed software, says Debashish Sinha, principal analyst for Gartner Dataquest IT services. Kruger says EDS will be using market share as its key yardstick. "Market share is definitely our measure of success. Being number one will be a good start and then we will widen the gaps," Kruger says. Regardless, Kruger notes that all the regions speak the same language when it comes to the bottom line. "They are all looking for us to help them deliver the same goods and services at a lower price point." -- Lisa Picarille
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