“No longer is IT just another tool the CEO might use to accomplish costs saving and operational ends. Today, information technology can help solve product problems, set new levels of service and create new distribution and communication channels.”
Founded in 1926, A.T. Kearney had evolved into one the world’s dominant management consulting practices. Its approach was to develop realistic solutions and help clients implement recommendations that generated tangible results and improved competitive advantage. The mix of strategy and operations had differentiated A.T. Kearney from its competitor’s and driven the firm’s outstanding results. A.T. Kearney had doubled its size every three years since 1983 and was recently listed in Consultants news as one of the five fastest-growing consulting firms in the world. EDS started in 1962 with Ross Perrot and $1000 dollar investment. It helped customers use information and technology to recast their economics and to identify and seize new opportunities. Considered by many to be the inventor of “outsourcing,” EDS had established itself as a world leader in information technology services. EDS defined its business as “shaping how information is created distributed, shared, enjoyed, and applied for the benefit of businesses, governments, and individuals around the world.” Its service offering included four different types of products: Systems Development, Systems Integration, Systems Management, and process management. EDS later entered the management consulting industry as part of a strategy to offer business solutions rather than simply IT solutions to its customers. EDS eventually formalized its efforts of management consulting by creating MCS which leveraged its tradition and strengths, MCS brought a new dimension to EDS. Over a short two-year period, EDS had built MCS into an organization of 1,300 people, with 30 offices in 20 countries. Competition for both firms revolved around the big six classic IT firms who were enjoying annual growth rates in excess for 15 percent as IT became increasingly strategic in nature and instrumental for reengineering. Operation and Strategic Firms, who were best known for their strategic expertise, were broadening their service offerings as they moved aggressively downstream into operations consulting. Systems Integrators and Systems Vendors had moved to more traditional management consulting markets and new information technology entrants that spotted the opportunity to consolidate client relationship by selling “upstream” consulting services on top of their core outsourcing and system integration skills. Because of intense competition and extensive opportunities, EDS acquisitioned A.T. Kearney Ltd. in order to provide is a full service company. Despite amazing growth in the first year, the “new entity” had problems in leveraging the two companies, and jumping on these new attractive opportunities. However, the acquisition also raised many issues. Among these was the issue of how to leverage the merger in terms of providing strategic consulting and information systems solutions to clients. There’s also the issue about the ability of these two very different organizations, with different skill sets and cultures, to work together in blending their services into a broad, seamless continuum. Should the two firm’s cross-sell each other's services? Should A.T. Kearney call on existing ED’s clients and vice-versa? Should the two firms work together to secure new clients? Sales management issues arising from this decision. For example, if cross-selling is to be encouraged, what incentive scheme might be appropriate?
* Successful merger between EDS and A.T. Kearney
* World leader in Information Technology services
* Offer services from systems development to Consulting services * Companies are very well known world-wide
* Well positioned in the market place