Electronic Data Systems Corp is the latest company to pin its future hopes for higher growth on electronic commerce. On Monday, EDS announced its plans to reorganize on geographic lines, and at the same time formed a new unit, E-Business Solutions Ltd, describing it as its newest growth engine.
Gary Moore, previously president of EDS’ Manufacturing strategic business unit, will head the unit, which will have 20,000 employees and which is expected to contribute $2 billion to the company’s revenues in 1999. It is a combination of the current Centrobe, Electronic Business, CIO Services, Human Performance Services, Enterprise Solutions and Business Intelligence Services units, along with elements of the SHL Systemhouse integration and consulting business, recently acquired from MCI/Worldcom.
Five geographic units will replace the traditional industry units as the primary channels for marketing, selling and delivering products and services to EDS customers. The units include Europe, the Middle East and Africa; Asia/Pacific and Japan; Canada; Latin America and the US.
The move is part of new CEO Richard Brown’s attempt to get EDS back on its feet. Last week the company revealed that it had cut 5,200 jobs during its first quarter, and reported a net loss of $20.6m after restructuring and other charges totaling nearly $380m. Brown has said that he views 1999 as the year EDS regains the pole market position it has lost to its rival IBM Corp’s services unit over the last few years, and wants to see growth rates accelerate above the industry average of 15%. Electronic business sector growth is currently growing at around 20% per year.
