November 13, 2007

Sky and EDS clash over "cutting edge" CRM system

EDS quotes Sky saying it wanted ‘the next quantum leap’ in CRM

By Leo King

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Sky and EDS clashed heavily in the Technology and Construction Court yesterday over the specifications the broadcaster required for a new customer relationship management system.

Sky claims outsourcer EDS misrepresented its abilities and resources when bidding in 1999 for the £48m deal to build the system, and is claiming £709m for lost benefits after late delivery.

EDS denies the claim and says it could not promise exact resource as Sky “did not know what it wanted” from the project.

Mike Hughes, former managing director Sky Services and a major witness for the broadcaster, said the company did not want to experiment with technology that had not been well tested elsewhere. He explained that the firm only wanted a system advanced enough to put “clear blue water” between it and the competition in areas such as churn management and call resolution.

“This was a business project not an R&D exercise,” he said under tense cross examination. “We wanted new technology but we did not want to be the first corporation using a new component or set of components.”

But Mark Barnes, barrister for EDS, asserted that Sky wanted cutting edge technology in order to set the pace among rivals.

He said Hughes had told workers in an internal workshop that the project needed to be “innovative, world class, and cutting edge”. Hughes had said he wanted it to be “the next quantum leap”, after the work he had done setting up a major new CRM system in his previous role at travel firm Thomas Cook.

But Hughes retorted that this statement was being taken out of context, and that he had used the strong language to motivate staff, set out a vision and “get them to think broadly and out of the box”.

In frustration, he continued: “I don’t know what else I can say.”

Sky and EDS are at loggerheads over how well Sky specified its needs for the project, a theme central to EDS’ defence.

Hughes said it was clear from the start that Sky wanted a programme that would be flexible, with service providers adapting to the needs as it ran along. “In order to understand the timeline [Joe Galloway, head of the CRM practice at EDS] must have known the scope. The precise detail, no. But he absolutely knew the scope of the programme ... and made a number of commitments to it.”

EDS contests that Sky had no clear aims, other than knowing it wanted a "super-duper CRM system", without specification.

Now read:

Sky's CRM plans were too vague to blame us, says EDS

Sky–EDS dispute 'shows service contract risks'

HMRC may sue to claw back EDS compensation shortfall

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