BSkyB sues EDS over faulty CRM system

18 August 2004 – UK digital television broadcaster British Sky Broadcasting (BSkyB) has launched a multimillion-pound lawsuit against US computer services group Electronic Data Systems (EDS) after the two fell out over a customer handing computer system.

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BSkyB alleges that EDS was in breach of a contract to build and run a computer system for two of the broadcaster's UK call centres.

In its legal claim against EDS, BSkyB accuses the latter of "deceit, negligent misrepresentation and breach of contract."

No official figures have been released but the satellite company is expected to seek compensation running into millions of pounds

EDS was originally hired by BSkyB in 2000 to design and operate a customer relationship management (CRM) system. The system, based on Sun Microsystems hardware, was to be housed at BSkyB's call centres in Livingston and Dunfermline in Scotland.

But BSkyB performance issues dogged the implementation. In 2001, the parties met to revisit the terms and conditions of their contract. By early 2002, EDS had handed back full responsibility to BSkyB but continued to provide consultancy support for the CRM system. The contract was terminated in December 2002.

BSkyB has invested over 170 million pounds on software, systems integration, infrastructure costs and the remodelling of call centre facilities.

IT has also budgeted a further 50 million pounds for the next four years to complete the current implementation and to continue to "maintain leading-edge" CRM systems for its subscriber base, which currently stands at about 7 million.

A spokesperson for EDS told The Guardian yesterday: "The language they have used is really "inflammatory and any analysis of what EDS undertook some four years ago will show that EDS behaved absolutely properly."

EDS is set to launch a counter-claim for unpaid bills.

The lawsuit is the latest blow to hit EDS. In November last year, it lost a bid for a three billion pound computer project to run the Inland Revenue's IT systems.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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