Andersen’s US actual consulting rev-enue is also probably closer to $350 mil-lion than the almost $1 billion sited bythe firm, because of similar padding ofits consulting revenue.Deloitte Touche Tohmatsu chases Andersen consultancy practicesKEANE’S OPERATING INCOME FELL 99% BETWEEN 1998 AND 2001$3$2$120Source: Keane1998199920002001ANNUAL OPERATING INCOME ($MIL)$170E U R O P E A N N E W S
Global IT Consulting Report, May 2002. ©Copyright Kennedy Information, Inc., 800-531-0007. All Rights Reserved. Reproduction prohibited by law.6EDS regroups to take market sharePLANO, Texas – For the secondtime in less than four years, EDS is re-organizing.The latest changes are designed to cutcosts from the consulting and outsourc-ing business lines to be able to undercutand steal clients specifically from thesoon-to-be divested practices of Price-waterhouseCoopers Consulting, De-loitte Consulting and Andersen.The reorganization of the IT solu-tions giant is the second since CEODick Brown instituted a restructuringalmost three years ago. At that time,Brown slashed more than 20,000 jobsand folded 75 profit centers into fourbusiness lines. Given Brown’s heavy emphasis oncutting costs to protect margins, it ap-pears EDS is adopting a strategy thatputs a premium on commoditizingtechnology and services.While EDS officials haven’t said itexplicitly, the move of the applicationsdevelopment and management servic-es out of outsourcing into the solu-tions consulting division implies thatthe firm will focus even more tightlyon commoditized solutions. EDS targets Big Five market shareBy emphasizing its core outsourcingservices, EDS, in effect, is saying it cantake business away from the formerBig Five by competing on a price basisthat’s backed by commoditized tech-nology and services.The apps division accounts for $4billion in revenues, according to oneEDS official. The unit also includes35,000 software engineers that willnow support the estimated 5,000 con-sultants in the new division. We’d be surprised if EDS doesn’t tryto push packaged apps across businesslines.Sun alliance will expandCombining apps and consulting alsobetter aligns EDS to take advantage ofits core alliance with Sun Microsystems.Sun has told GITCthat it has no inter-est in expanding its service offerings be-yond its current focus of designing ar-chitectures on which apps run. The alliance between EDS and Sunshouldn’t be discounted. Faced withthe prospect of having only arch rivalIBM to supply mainframes to run inits data centers, EDS is working withSun on alternatives, if a satisfactoryagreement with IBM cannot bereached, says Doug Frederick, presi-dent of outsourcing.ATK’s problems continueATK, EDS’ strategy practice, willcontinue to operate as a separate unitin the reorganized EDS. The strategy(continued on page 7)EDS STREAMLINESSource: EDSCentralized systems managementCentralized systems managementTHE OLD EDSTHE NEW EDSINFORMATION SOLUTIONSOPERATIONS SOLUTIONSDistributed systems management
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