Air Transport World

A force to contend with: Electronic Data Systems is expanding its information-technology services across the air transport spectrum.

Electronic Data Systems is expanding its information-technology services across the air transport spectrum

Electronic Data Systems does not manufacture computer hardware or software. It does not own public telephone lines. Yet, EDS, a leader in information technology, has as much impact on a firm's participation in the information age as do companies that serve in those roles. Increasingly, businesses are handing over IT functions to EDS and other specialists, who often do the job better and more cheaply, with less hassle.

H. Ross Perot and a batch of other ex-IBMers founded EDS in 1962, to help companies automate their data processing. Voila! The computerservices industry was born. But EDS did not become serious about air transportation and distribution until 1990, when it created the Travel & Transportation Group as a separate unit. Now, the group has 1,500 of EDS's 78,000 employees, 250-plus of its 8,000 clients and $400 million in revenues out of a $10 billion total.

The reasons for EDS's interest in air travel are obvious: (1) The industry is heavy on data; (2) has badly outdated computer architecture; (3) is outsourcing to cut costs and (4) must adapt to a changing marketplace, the direction of which is unclear. This uncertainty breeds the need for more information, faster information and more ways to use it, fertile ground for EDS and other IT specialists.

Group Executive Jose Ofman estimates that travel and transportation companies worldwide spend $36-40 billion on his unit's specialties. But EDS was not positioned to tap that potential until the last decade. General Motors' purchase of the company in 1984 resulted in its taking over GM's IT functions. That greatly expanded EDS's global reach and services--operations in 35 countries and every state in the U.S.--that it is trying to leverage now.

The group might have expanded more quickly, had not the recession occurred. …

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