EDS subsidiary AT Kearney runs the way it did 80 years ago. What are the pros and cons of that approach against IBM’s?Early this year, Consulting magazine ranked AT Kearney as 

the industry’s most stressful place to work at, prompting CEO Dietmar Ostermann to respond in a Business Week interview, “It was a wake-up call.” But the findings also indicate the topsy-turvy created when two mismatched organizational cultures are squeezed together. Since 1993, IT services major EDS acquired seven business consulting firms as part of its aggressive thrust to become a global consulting leader. It peaked with the acquisition of AT Kearney in 1995, but with a difference.

Today the billion-dollar AT Kearney still operates globally as an independent line of business from EDS with its original brand name and identity. So why did EDS break away from the well-trodden swallow-up approach?

One of the primary reasons was the close to 80-year-old brand value of the consulting firm. Says AT Kearney’s Srinivasan, “EDS has thought through the question very deeply and believes it is a unique brand. Forcing it into the EDS mould is not going to work.” Is there a learning point from here? If the brand value of AT Kearney was important enough for EDS, shouldn’t IBM have used the same approach with PwC Consulting? “Both models have their pros and cons,” says IBM India’s Thomas. In this case, IBM felt its brand equity outweighed PwC Consulting’s, prompting it to go down the swallow-up approach route. Moreover, “if you maintain separate entities that means separate practices and this can cause conflicts”, he adds.

There are other reasons why EDS maintains the dual-approach model with AT Kearney. Explains Srinivasan, “A lot of practical people within the consulting and IT community are saying we have to find the middle zone where skills overlap.” At those times EDS and AT Kearney work in conjunction. At other times they work separately. Do they recommend each other? “We don’t recommend EDS as a rule of thumb. Neither does EDS take AT Kearney with them. It is really where it makes sense to collaborate within the eyes of the client.” But, he admits, in practice it may not be a really black and white situation. In any case, a year after announcement of the IBM merger, Thomas feels their approach has not created any confusion amongst employees or in the market place. “They all work for IBM.” His touchstone for success till now? “No customer has come and said I am not going to deal with you because you are IBM.”

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