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Global IT Consulting Report, May 2002. ©Copyright Kennedy Information, Inc., 800-531-0007. All Rights Reserved. Reproduction prohibited by law. 7 EDS regroups to take market share (continued from page 6) arm reported a greater-than-expected 15% decline in Q1 revenues. EDS officials deny that ATK is in danger of being spun off or sold. How- ever, ATK’s relationship within EDS will likely become more strained because it is the only business line that has no outsourcing component. It is the only unit that has consistently lost money under Brown’s reinvigorated EDS. ATK’s revenues for 2001 slid to $1.2 billion. Since purchasing ATK in 1995, its revenues have increased 10.8% CAGR, compared to a 15.3% CAGR for the management consulting industry. Under the new business model, BPO services will be housed within the new operations solutions division. Viewed as an area of tremendous growth potential for EDS, BPO will get better support, especially from EDS’ revitalized and increased sales staff. BPO accounted for $3 billion, or about 14% of the firm’s revenue. These gains will have to be made without John McCain, who boosted E Solutions revenues 38% to $1.2 billion in 2001. EDS officials say McCain has left to accept an offer with another firm, although weeks after his depar- ture he still had not re-emerged. It appears that McCain doesn’t fit into the reworked EDS, where con- sulting services will apparently be heavily influenced by apps develop- ment and management. The new consulting business unit will be a $7 billion organization, of which only $1.2 billion comes from the E Solutions consulting division McCain headed. The practice will be headed by Paulett Eberhart, who pre- viously led the North American out- sourcing practice. Eberhart previously reported to the head of the outsourc- ing practice; she’ll now report directly to the CEO. FRANKFURT, Germany – EDS’ timing couldn’t be better. In the past year, it has become a major player in Germany and is primed to take advan- tage of the expected rebound in the local IT market. The acquisition of Hamburg-based Systematics AG doubled EDS’ rev- enue in Europe’s top IT market. Gold- man Sachs estimates that EDS’ sales pipeline in Europe already has dou- bled compared to a year ago, though several large outsourcing contracts re- main unsigned. And the news should get better. For- rester Research projects that the IT serv- ices and consulting market will return to double-digit growth by next year. “During the 1990s, EDS in Germany was largely asleep, especially when it came to IT consulting and project im- plementation,” said Christophe Chalons of the German IT-services market re- search firm PAC. “Its focus was almost entirely on outsourcing among big Ger- man multinationals. It also had a con- fusing and overlapping internal organi- zational division between i-Solutions for outsourcing, e-Solutions for ERP solu- tions, and BPM, which had been very small.” The integration of Systematics and a global reorganization of the firm have positioned EDS to take full advantage of the expected growth in the German economy. EDS CEO Dick Brown wants revenue to grow 13%-16% in Germany this year.
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