BusinessCompany NewsDitch the cock-up kings

Ditch the cock-up kings

If you're in the consultancy game, it might seem that Electronic Data Systems has a lot to answer for. Let's take a look at the evidence.

The firm was ditched mid-contract (worth £3bn) by the Inland Revenue over IT blunders in 2003. In November 2004 it was slammed by a group of influential MPs over high-tech errors within the Child Support Agency (forcing the former head of the CSA to resign).

In January 2005, it was forced to sign a ‘failure clause’ to continue to pitch for one of the largest and most sensitive government IT contracts – a £4bn revamp of the Ministry of Defence’s computer systems.

And now we learn that it has been investigated four times in three years, by not only the Whitehall procurement watchdog the Office of Government Commerce, but also externally by Big Four firm Deloitte.

Despite all of this, EDS still remains the second-largest computer services group in the world, behind IBM, and recently paid $420m (£222m) in cash to acquire an outsourcing division of Towers Perrin.

Sure, it has proven to be a successful outfit on the balance sheet, but its competitors must be scratching their heads in bemusement.

If I were in their place, I’d be asking: ‘why hasn’t EDS’s position changed among the ranks of the top firms? How has it continued to make such enormous profits despite high-profile failures and question marks over its previous contracts? And why is the public sector still shortlisting it for major deals despite such damning evidence?’

I thought I’d try to answer these questions myself. But this was harder than I thought. Despite EDS’s manifold cock-ups, it is only through making a specific request to the OGC via the Freedom of Information Act that I can even begin to question the secret of its ‘success’.

The OGC must respond within 20 days. But this brings into question the entire ‘confidentiality’ issue. I understand the need for corporate confidentiality, but surely transparency is also key?

All companies vie for the best deal, but secrecy and evasion will in the long damage reputations and put off clients. I’ll let you know if my FOI enquiry reveals why they haven’t been already.

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