EDS - The Advantage of Size

EDS (Electronic Data Systems) is a global company involved in providing IT services. The company specializes in technological consulting, systems development and building complex projects. One of the company’s prominent areas of activity is providing comprehensive computer management services – outsourcing. Founded in 1962 in Dallas, Texas, in the 1980s and 90s, EDS operated as a subsidiary of General Motors. In 1996 EDS severed itself from GM, transforming into a public corporation with shares sold on the New York and London stock exchanges. Today the company operates in 60 countries and employs over 120,000 workers.

EDS Israel was founded in 1995 with a staff of six. Over the years the company has grown, primarily through outsourcing agreements. In the year 2000 some 300 new workers joined EDS Israel through the acquisition of the Israeli operations of Liraz Systems. Today the company has a total of 1,000 employees. We spoke with Simone Ronen, vice president of human resources, about the company’s development in Israel and patterns of employee management.

How did the company grow and develop?
Simone Ronen, vice president of human resources at EDS: The company’s constant, accelerated growth is based primarily on large outsourcing agreements, which lead to the hiring of the client’s computer units employees at EDS. Our methodologies allow us to hire them quickly and professionally. This brings into our ranks workers from the client’s computer units who have a wealth of experience and know-how in a broad range of work environments and computer technologies.
This kind of agreement is mutually beneficial. The client’s former employees bolster our human capital while the client gets continuous service provided by workers who are thoroughly familiar with its work environment.
The customer’s computer department becomes an organic EDS unit. The transition upgrades the unit’s abilities thanks to EDS’ work methodologies and unique management.

Give us a few examples of such deals.
In 1997 the first deal was signed with the military industry. A deal was made to have EDS manage the military industry’s computer activity for a period of five years. The $35-million deal included the transfer of 80 workers from the military industry’s computer unit to EDS.
One year later an agreement based on similar principles was signed with Tnuva. That deal was worth twice as much money –$70 million. It was agreed EDS would manage Tnuva’s computer setup for ten years.
Both of these agreements have already been extended.  

It’s no coincidence the first deals by EDS Israel were with traditional companies that were undergoing recovery processes at the time, and not with high-tech companies. Veteran companies felt they needed a specialist to run their computer systems, while high-tech companies felt they could run these systems by themselves. Later high-tech companies also discovered management by an expert service provider was more efficient. By 2001 you had already signed an agreement with ECI.

Correct. At the time it was the largest agreement ever signed in Israel, a five-year, $82-million deal. This agreement was also extended recently.

Another deal, a special deal with a high-tech company, was signed in 2004 with Comverse. What made it special was that EDS Israel signed its first global outsourcing deal. In the process we took responsibility for supporting 80 Comverse sites around the world.

In April 2005 we signed a similar agreement with Lumenis. In addition to its sites in Israel we also manage its computer system in the US, China and Japan. The workers in these countries are handled by the local EDS human resources staffs. As Israel’s human resources department we have no direct connection to them.

What is the company’s human resources policy?
EDS is a service company. We have no products – either software or hardware – therefore service is the most important component of the company’s activity. The better service the customer receives the greater the contribution to our business. The employees are the ones who provide our customers service. In order to provide worthy service they have to be satisfied. EDS’ approach is that the employee is the basis for commercial success.

The Human Resources Department is responsible for providing internal service for the employees. We want to meet their needs to their satisfaction and to achieve this we run a range of management tools.

Which tools, for example?
An employee opinion poll, which is used to draw conclusions and improve. Until last year this was a part of the worldwide survey the company conducted at all of its sites around the globe and called “Voice of Employees.”
Since we felt the percentage of respondents was insufficient we decided that starting this year we would conduct a local survey as well, which would also provide us a much sharper focus regarding our activities here in Israel. A survey passed on to 120,000 employees is nothing like a survey passed on to 1,000 employees.

The worldwide survey focused more on general questions like the quality of leadership at the company, the level of job satisfaction, whether you would recommend EDS to a friend, etc. We also wanted to know how satisfied they were with the services provided by the central office in Israel, such as human resources services, how satisfied they were with the employee portal, how satisfied they were with the employee benefit and activities program, etc.

The worldwide survey is conducted once every year or two. The new local survey will be conducted once a year.

Give us an example of improvements made following the survey.
The surveys showed there is room to improve the organizational communication at the company. We initiated the setup of an Israeli employee portal and a company journal sent to each employee’s home. The first edition is scheduled to be published soon.

Another management tool is the Round Table Meeting with the CEO. At the meeting the CEO conducts an open, unmediated conversation with the employees.

Another tool is the implementation of the “open door” policy, which entitles every worker to elect to meet with any manager at the company, in a discreet manner.

What good does this do and how does it work in practice?
Sometimes the employee wants to consult with a manager. To hear other opinions, not just that of his own manager. For instance, let’s say he has an idea and he wants to hear the marketing manager’s opinion. There is no need to report the conversation to his manager and the manager contacted is required to be discreet if the employee so requests.

A direct supervisor does not feel he is being bypassed?
The moment these are the rules of the game and everyone is aware of them, there shouldn’t be any problem. That’s not to say these kinds of contacts are routine, but the option is available and the employees definitely do apply judicious thinking to the matter.

Do the services the Human Resources Department provides the workers vary from day to day?
Definitely. To me, quality service is first of all a constant aspect of the package of services and how relevant it is to the employees’ needs, making the necessary adjustments. For instance, we receive requests from employees who want to include their children in the company’s special activities. We organized activities for Hanukah and Purim, as well as an activity for kids entering first grade.

We attach great importance to our reaction time as a human resources unit. Our actions have to be in step with the pace of company activity. That means if the workers in the field are required to provide solutions to their customers, who demand frequent changes, we must adapt ourselves to this situation. An example of this is the “Hot Request” service, which allows the employee to send a request online to the contents specialist at Human Resources, from any location and at any time at his convenience, and receive a response within 24 hours.

There is a Hot Request link on the intranet site. When an employee wants a quick response to a question that came up he does not even have to leave the screen and enter internal e-mail, but can simply click on the link and write in the question. The manager then receives the question, whether it relates to pay, benefits and activities, etc. For instance, there might be a request for an explanation regarding a certain detail of the share-purchasing program we’ve issued.

What are the principles of compensation at EDS?
Pay according to the level of performance, which is assessed through a performance assessment system. This system evaluates to what extent the worker met his annual goals. The employee can reach one of the following levels of performance:
“Far Beyond Expectations,” “Beyond Expectations,” “Met Expectations” and “Below Expectations.”

The first two levels are considered the level of excellence and this is reflected in terms of monetary compensation as well. Through this process the manager considers allocating funding for raises and bonuses, with the employee’s performance the main factor in the decision.

When a manager assesses a pay raise he assesses three components. The employee’s level of performance is one of them. The second component is his salary relative to the job market at the time, and the third component is the availability of budget allocations for these purposes.

So how do you distinguish between outstanding workers and workers who are less than outstanding?
When the funding is limited and the level of the workers’ compensation is close to the pay level in the job market, priority is given to rewarding outstanding employees.

When an employee executes a task successfully he has to wait until the end of the year to be rewarded?
A special effort earns the employee immediate, non-monetary recognition, such as a weekend for two, a visit to a health spa, dinner for two, etc.

For example: Let’s say a team of workers was supposed to move a computer room to another location. This is a task that demands special effort and long workdays, possibly weekends too, in order to reduce the amount of time the computer room is out of commission. At the end of such a project, if the customer is satisfied, there is room to consider compensation and a show of appreciation.

What is the company’s policy on benefits and company activities?
To meet the worker’s various needs. I’ll give you examples from different fields: Events are held at the unit level and at the company level, including events for family members as well. For example, the EDSLand event, which was held a few months ago for employees and their families at Superland.

The employees are covered by one of the best health insurance policies in the country and have disability insurance based on concerns for the worker and his family in hard times as well.

There is a learning program in which workers take part during their free time in the afternoon. The subjects are numerous and varied and are held in three tracks:
The Enrichment and Expansion of Knowledge Track – a track that includes subjects such as eating culture in film, world conflicts or dreams and the human soul.
The Well-Being Track – subjects such as yoga, tai chi or thinking in motion.
EDS Family Track – subjects such as establishing a dialogue with children, parental authority, sibling relations or marital life and parenting in the modern age.

What is the level of participation in these programs?
High. The demand exceeds the supply. The program began in 2003 and has been expanding from year to year. Today there are 50 activities per year, with an average of 20 participants per program. That does not mean every company worker takes part, but that there are workers who participate in more than one program during the year.


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