The EDS/Connecticut Marriage

Congratulations are in order for the state of Connecticut and Electronic Data Systems Corp. The two recently announced their intentions to join in corporate matrimony and expressed the hope that their respective families of executives, politicians, citizens, shareholders and bean-counters would support the union-at least as the two spend the next seven years and the first several hundred million tax dollars together.

We wish them the best as they pursue data integration, seat management, enterprise resources planning and years of service improvements.

Connecticut chief information officer Rock Regan said that EDS was picked over the competitors-IBM Corp. and a Computer Sciences Corp./state employees union team-because EDS had the upper hand in "a lot of little things." In other words, while the others were OK, EDS really understood the subtle preferences. In contracting, as in chivalry, it's often the little things that win the day.

Of course, this deal did not turn on small blandishments. This is the most ambitious public-sector outsourcing arrangement ever attempted. Although jurisdictions such as Indianapolis, Michigan, Missouri and Pennsylvania have put together some large deals, no one has ever attempted anything on this scale. So EDS' talent for managing particulars will come in handy, especially as it works on the inside, tying together Connecticut's systems, and on the outside, helping to convince the public that outsourcing the job was the right thing to do.

The company comes into the partnership well-prepared, having been for years one of the industry's leading evangelists for big, multidisciplinary outsourcing projects. "Let us do it all," EDS always seems to be saying. But the company also has been an innovator in crafting performance-based deals that require the contractor to assume a certain amount of risk. All in all, if this company can't do the Connecticut job, the others probably would not be able to do it either.

The state's IT team will have to work constantly to make this deal successful. Perhaps the most difficult part of its job will be to smooth the bureaucratic waters that may have been whipped up by the contract and to inspire program managers and staff to stop thinking in old terms of service delivery.

For the first time since the beginning of automation in the state, Connecticut program managers have an opportunity to improve dramatically the way services are delivered and to make a marked difference in the lives of citizens. They may never have had better tools at their disposal to make it happen. Here's hoping that both parties to the deal can seize the initiative.

Paul McCloskey



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