EDS Agrees To $460 Million Settlement Over Failed CRM Implementation

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EDS has agreed to pay $460 million to settle a lawsuit filed by British Sky Broadcasting Group over a botched customer relationship management project.

The suit was originally filed in 2004 and stems from a project the companies began in 2000. The settlement is more than four times the value of the original contract signed by British Sky and EDS for $109 million.

EDS was selected by Sky in 2000 to build, manage implement and integration a CRM system, but the project was not a success and in 2002 Sky took over the role of systems integrator, according to a 468-page court document filed in the High Court of Justice, Queen’s Bench Division, Technology and Construction Court, last January in the United Kingdom.

Sky went on to implement its own CRM system, but instead of going live in July 2001 and being completed in 2002 with EDS, functionality wasn’t completed until March 2006 at a cost of hundreds of millions of dollars.

“Sky alleges that EDS made fraudulent misrepresentations which led to EDS being selected, to a Letter of Intent and to the Prime Contract. They also allege that EDS made negligent representations prior to the Letter of Agreement,” according to the court document.

The CRM system was designed to become Sky’s customer support hub, receiving support inquiries via telephone, fax, e-mail and more, according to the court filing.

"This matter is now closed, having been settled fully and finally on mutually agreed terms. We will not be commenting further publicly on this legacy issue,” a Hewlett-Packard spokesperson wrote in a statement. Hewlett-Packard acquired EDS in 2008.

Inquiries into British Sky for comment were not returned.

The news of a settlement comes just a couple of weeks after big systems integrator, Deloitte Consulting, was sued by Marin County, Calif., for what the county calls a failed SAP implantation. Marin County is seeking at least $30 million, according to the suit.

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