Broadcaster Sues EDS Over CRM Contract

U.K. satellite TV company claims firm failed to fulfill system development deal

The U.K.'s largest satellite TV broadcaster sued Electronic Data Systems Corp. last week over a $109 million CRM development contract that was signed in late 2000 and then terminated two years ago.

London-based British Sky Broadcasting Group PLC said it had filed a legal claim against EDS for "deceit, negligent misrepresentation and breach of contract" during the implementation of a CRM system designed to support operations at BSkyB's call centers. A company spokesman declined to disclose the amount of money that BSkyB is seeking from EDS.

BSkyB severed its relationship with EDS in early 2002 after the IT services firm "failed to perform its contractual obligations," according to a statement issued by the broadcaster last week. After the deal was ended, BSkyB subsidiary Sky Subscribers Services Ltd. took over integration work on the CRM project, which is expected to be completed "in the near future," the company said.

Contract Troubles

The lawsuit is another black eye for EDS, which has been struggling with problematic contracts such as its potential intranet deal with the U.S. Navy and an agreement to develop a voice-over-IP network for The Dow Chemical Co. Dow and EDS agreed to end their contract in July, and Dow this month named IBM to take over as lead contractor .

British sky broadcasting's call center in Livingston, Scotland.

British sky broadcasting's call center in Livingston, Scotland.

Image Credit: British Sky Broadcasting Photo

EDS spokesman Malcolm George said the Plano, Texas-based company had yet to receive BSkyB's lawsuit. But he added that EDS denies its former client's claims and is ready to fight in court. "We're going to vigorously defend our position, and there will be a counterclaim in the several millions of [British] pounds for unpaid bills," George said. "It's absolutely outrageous."

BSkyB said it filed the lawsuit after settlement discussions between the two companies failed. At issue is a system that was to be built around hardware from Sun Microsystems Inc. and CRM software from Cupertino, Calif.-based Chordiant Software Inc., which specializes in business-to-consumer applications.

The BSkyB spokesman confirmed that the Chordiant software is still being used, but he declined to offer further details about the project. When the deal with EDS was announced in 2000, BSkyB said it planned to use the CRM system to integrate disparate data sources and create more comprehensive customer profiles. In addition, the company's subscribers would be able to access information such as account and billing data via phone calls, the Web or interactive TV services.

Although the contract with EDS was valued at $109 million, BSkyB said in its statement that it has spent a total of $310.8 million on software, systems integration, infrastructure costs and a revamp of its call center facilities. The company expects to spend another $91 million during the next four years to finish the rollout and maintain the CRM system for its subscriber base, which now stands at about 7 million.

Copyright © 2004 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon