Corporate Image: Giant that rose without trace: EDS has become an industry leader but few can explain what it does

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The Independent Online
AT WEEKENDS, Les Alberthal is a Texan. He puts on a stetson, long boots and 'the whole nine-gallon thing', and rides around his ranch checking on his cattle. Come Monday, though, he is dressed in a dark blue suit, white shirt and conservative tie to become the all- American executive, chairman of one of the largest information technology firms in the world, EDS.

The company is intriguing for several reasons: it was founded by Ross Perot, and is the basis of his fortune; until he left in 1986, it banned its employees from having beards; BT tried to buy it earlier this year; and, most interesting of all, it is almost impossible to explain what it does.

Not surprisingly, Mr Alberthal is rather bored of questions about Mr Perot. 'He has had nothing to do with EDS for seven years, yet here we are talking about him,' he complains. But he concedes that he knows why this happened. 'Ross built his own reputation, cultivating the Perot image,' he says. 'A company was being built, but it didn't surface with its own image until after he left.'

Mr Perot started EDS in the Sixties as a data processing company, running payrolls for other companies. In 1984, when the business had a turnover of dollars 750m ( pounds 500m) and 13,000 employees, it was sold to General Motors. Two years later, amid much bad blood, Mr Perot left.

Mr Alberthal took over, and commissioned research to find out what EDS's image was. 'The good news was we did not have a negative reputation. We didn't have a reputation at all.'

This does not seem to have damaged the company. It now has sales of dollars 8bn and more than 70,000 employees. In the process, Mr Perot's dress and behaviour code - a combination of the IBM model and his own military background - has softened. 'There is still a dress code. But I think well-trimmed beards are fine.'

But Mr Alberthal concedes that the biggest problem of all remains. 'We're always struggling to explain what we do,' he says. 'Our employees have difficulties explaining their job to their wives and friends.'

EDS is the sort of company that makes marketing people reach for woolly words such as 'solutions' and 'resources'. But Mr Alberthal has a real cracker of his own: EDS is all to do with the 'leveragibility of technology'.

It is easy to raise an eyebrow, yet the truth is that the business world is getting woollier and companies, especially those in information technology, are increasingly hard to describe. Perhaps the best way of explaining EDS is to take its origins in computerised payrolls and say that it went on from there. It tries to make sure that wherever people spot a new use for technology, it can interpose itself. The nearest thing to a final product is usually customised software, but this is only part of the process of making better use of technology: hence 'leveragibility'.

As children nowadays are brought up surrounded by technology, Mr Alberthal predicts that problems of definition will soon disappear. 'My 17-year- old son is far more comfortable with technology than I am. He just accepts it as a tool.'

The key to the company's success, he believes, is that 'technology will continue to grow faster than the ability to use it'. EDS is looking at areas in which technology is well ahead of application. An example is 'convergence', where telephones, televisions and computers come ever closer to fuelling a boom in interactive multimedia.

Home shopping from a TV screen is the forerunner of this business. Now it is well established in the US, EDS is lookingat its logical extension. 'When I buy an auto, I want to kick the tyres,' Mr Alberthal says. 'Now the technology is available to deliver a vast amount of information to look at a car from every conceivable angle, so you can order it from your sitting room. You could sit there and design a car, your credit could be approved in 10 minutes, and the order would go straight to the factory floor. That would completely cut out dealers.'

If this ever happens, EDS will be able to help the car company package the information appropriately, the receiving equipment manufacturer decode it, and the telecommunications company make sure it is sent smoothly along the line.

He believes that companies that use this sort of technology first could leapfrog the competition. 'The Japanese may have a dominant share of the car market now, but what happens if a Korean car manufacturer figures out ways to go straight to your home?' EDS is on hand to help any company thinking along such lines. 'The car companies will have to figure it out. Our responsibility is to help them. All we're trying to do is to tweak their imagination.'

All this is leading EDS into closer links with telecommunications companies. Talks with BT broke down earlier this year, when BT's demand for a majority share was rejected, but Mr Alberthal says: 'We have been in conversation with every communications company out there. They need links with companies like ourselves.'

He hints that a link-up with BT, or other such companies, has not been scrapped for ever. 'If we don't consummate a sale today, we can knock on the door tomorrow.'

EDS is certainly interested in Europe, which Mr Alberthal believes is roughly five years behind the US in the use of technology. It bought a UK company, SD-Scicon, in 1991, and is bidding to process records for the Inland Revenue. The Revenue could do with a few people in stetsons wandering around; it is just sad that EDS will not be providing the hats.

(Photograph omitted)

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