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Tuesday, July 27, 2004

EDS - Tough times via BWeek

Any rebound at the ailing tech-services giant is likely to be slow. Even management is pointing to 2006 as a return to growth.The 20 billion dollar giant is struggling to grow and is losing marketshare to its rivals IBM and Accenture regularlyFor more than a year investors in ailing Electronic Data Systems (EDS ) have nurtured hopes of a turnaround even though the technology-services giant's sales kept sliding and it posted loss after quarterly loss.Investors are probably in for more blows in the coming months.EDS's management doesn't foresee growth until 2006.EDS needs to refocus its sales strategy, analysts say. For months, it has concentrated on grabbing midsize, single-function contracts of less than $1 billion, partly because while "larger contracts look good [on the balance sheet, they] take longer to transact.EDS needs to focus not only on grabbing these larger contracts but also on convincing potential customers that its current struggles won't hurt its ability to provide solid service. Yankee Group surveys show that large corporations perceive EDS as not stable. Given this, they might hesitate to send it business or could ask for concessions to account for the added risk.Tough job at hand for the EDS top management.Service companies can sustain wins only by better business models, high class management talent, dynamic corporate culture and delivery excellence - EDS is widely perceived to be scoring poorly in most of these parameters -it is not scoring the highest in any compared to its peers.
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