Bank of America Thursday sealed a $4.5 billion managed network outsourcing
services agreement with EDS , under which EDS will take
charge of Bank of America’s end-to-end operations.
Beginning in February, EDS will provide Bank of America’s carrier services,
establishing a “one-stop-shop” for voice and data. EDS will also redesign
and implement solutions for Bank of America’s optical network and provide
the company with help desk operations support.
“We chose to partner with EDS because this is what they do best,” said Don
Obert, technology services executive for Bank of America. “This agreement
will help us achieve best-in-class delivery of products and services. It’s
important for us to capitalize on the expertise of partners like EDS to
help us align our resources with business needs, to be better prepared for
future growth and to support our ongoing efforts to improve service
quality.”
EDS has also suffered due to its exposure to WorldCom’s and US Airways’
For financial services firms, the research said, the drive to outsource
Dataquest noted that Internet platforms for new services and emerging new
As a result, financial services that were once considered more sacrosanct
The deal comes a month after EDS lost a $5
billion contract with JP Morgan Chase to rival IBM ,
part of a string of wins for IBM over EDS. In the same week, IBM beat out
EDS for an outsourcing contract worth about $679 million with DBS Bank of
Singapore.
IBM has been playing hardball against EDS in the space. Of the more than
3,000 patents IBM won in 2001, more than 1,500 were for infrastructure
technologies such as software, servers and storage systems.
bankruptcies, which ate into its profits in the third quarter and may have
played a role in the Plano, Texas-based company’s October decision to slash costs by
laying off up to 5,600 employees and selling $500 million worth of
“non-strategic” assets.
Outsourcing represents one of the few, if any, growth areas for technology
vendors in the financial services vertical. Technology research firm
Dataquest, a unit of tech research firm Gartner, has estimated that
worldwide financial services business process outsourcing (BPO) revenue
will grow by 9.3 percent this year to $41.3 billion, helped by a surge in
interest from financial services firms.
more processes goes beyond cost-cutting mandates in the wake of a recent
recession, accounting scandals and even the impact of Sept. 11 that have
hit firms’ profits.
business models among vendors are also driving the surge in interest.
in banks’ customer relationship arena, such as cash management, mortgage
origination and lending, are increasingly part of outsourcing
considerations.