Making IT Work by Jeffrey R. Yost

Author:Jeffrey R. Yost
Language: eng
Format: epub
Tags: information technology; history of technology; computing; business; STS; companies; develop; development; gender; women; professionals; support; IBM; maintenance
Publisher: The MIT Press
Published: 2017-10-31T04:00:00+00:00

Expanding Scale and Scope and Becoming a GM Division

Although the failure of F. I. DuPont Glore Forgan/DuPont Walston resulted in a substantial financial loss to Perot, he was still a wealthy individual, and he and his team had positioned EDS to prosper by serving numerous firms in the banking, life insurance, utilities, and other industries in the second half of the 1970s. One source of early success, health care processing, had been faltering, but Meyerson revived it through the savvy appointment of a talented system operations manager, Ken Riedlinger, to head health care efforts for the Eastern region—winning a North Carolina Medicaid contract in 1975 and a Medicaid contract in Tennessee in 1976. By 1977, EDS employed more than 6,300 people, nearly double the total several years earlier.39

Many of these employees came from clients’ data processing departments that EDS took over. For existing data processing managers this could be a trying experience, but most successfully survived the transition to what was often the more formal ways of EDS. Becoming an EDS employee often opened up opportunities greater than being stuck in a corporate data processing department—seldom a path to the executive ranks. Skilled technical and managerial leaders could move up the ladder at EDS, perhaps to one of the larger data centers or the Dallas headquarters. And if the timing was right with EDS’s volatile but generally advancing stock (after the 1970 plummet), they could meaningfully advance their overall compensation through stock incentives. Some, however, did lose out by borrowing funds to buy options that became worthless as a result of the DuPont Walston collapse, the recession, and the overall weak stock market of the early to mid 1970s.

For years EDS had a small center in San Juan, Puerto Rico, and had added a bit of business in Europe, but well into the 1970s it was still overwhelmingly a US-focused company. At the middle of the 1970s this appeared to be changing as it first received a contract from King Abdulazziz University in Saudi Arabia, and then, in 1976, a $41 million contract for data processing for Iran’s social security system. The glowing discussion of the latter operation in EDS’s 1978 annual report coincided with the beginning of revolutionary change in Iran. Suddenly payments to EDS ceased, and the company, which issued all the health care and social security checks for Iran, stopped providing services and ordered all but two of its 80 employees in Iran and their families to go home. The two EDS executives who remained in Iran were imprisoned, and Perot traveled to Tehran and financed a commando group to try to rescue them. Ultimately the efforts were successful, and the two EDS executives and others escaped and joined their rescuers to come home. To publicize the episode, Ross Perot’s wife, Margot, suggested hiring the novelist Ken Follett, who agreed to write a book if he could have a free hand. The deal struck involved a million-dollar advance to Follett from the publisher, with both Perot and

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