At the European IT Forum in Paris, the Plano, Texas-based company today said that its Interactive Billing Services will allow large businesses to reduce their operation costs by doing away with paper invoices and allowing them to send bills, statements, and payments via email, corporate intranets, and other Web-based applications to suppliers and partners.
EDS's Internet business unit, E.solutions, said it will deliver interactive billing to European businesses later this year. EDS said it already has implemented the service for major customers in the United States, such as telecommunications company MCI WorldCom and financial institution Bank One.
In a conference call to reporters earlier today, EDS executives said the market for electronic billing in Europe is projected to reach $12 billion by 2005. They said the firm is the first of its competitors to make a major push in Europe. EDS competitors include IBM Global Services, Andersen Consulting, KPMG, Computer Sciences, and Unisys.
"The timing is perfect for EDS," said Avivah Litan, an analyst at market analysis firm Gartner Group. "The billing market is a very ripe market. European companies are looking at it very seriously right now."
She said EDS, as a systems integrator, can capture a lot more revenue by targeting the business-to-business market space with its billing service, because setting up that type of system is much more complicated and takes more time to implement than a business-to-consumer one.
"There's more customization involved," she said. "That's where [EDS's] money is at."
According to Jay Ruuska, vice president of interactive billing services at EDS Europe, "EDS knows the European marketplace." He said the company is taking advantage of a "very attractive and wide-open marketplace" as more and more European businesses begin to recognize business-to-business capabilities.
Litan said EDS rival IBM Global also has addressed the market in Europe with a similar Internet billing service. Both companies are equivalent in how well each will compete in the market and are probably the only two global services firms that have the resources to take advantage of the market at this time, she said.
Initially, EDS said it plans to offer the new service to its existing clients in Europe, specifically targeting the telecommunications, financial, manufacturing, and utilities industries, as well as the government sector. The company said its interactive billing service can help businesses reach cost savings of up to 40 percent, allowing them to save "substantially" on printing, postage, and mailing costs by using the Web-based billing system.
Michael Killen, an analyst who follows the electronic billing services market at San Francisco-based Killen & Associates, said that by next year, the electronic bill payment market will grow to $3.4 billion. He added, "EDS is entering the market at a time when the market is getting ready to take off."
In addition, while the European e-commerce market lags that of the United States, there's a growing interest in e-commerce by Europeans, said Anthony Miller, an industry analyst at U.K.-based Richard Holloway Limited. He added that at one point, the United Kingdom was behind the United States by two years, but now "that gap is narrowing."
According to a recent study conducted by EDS competitor Andersen Consulting, European companies, while still cautious, are gradually waking up to the benefits of using the Web as a business tool. The study, released last week, found that Europe's use of the Web to sell to consumers or to do business with suppliers and business partners lags behind use in the United States, it but did find that European executives' attitudes toward e-commerce are changing.
EDS executives said they expect the company to sign "significant business" for its interactive billing service in the first half of 2000, heavily targeting the larger markets in Germany, Scandinavia, Spain, the United Kingdom, and France.
In addition, the company said it's addressing data security issues by processing European bills and statements locally. An EDS processing center already has been set up in Russelsheim, Germany, the company said.
Today's announcement comes on the heels of the company's launch of a $50 million global ad campaign. The print and television ads, the first for the company since 1991, are part of a plan by chief executive Dick Brown to help EDS recapture market share and to revamp the stodgy firm into an e-business player, Bloomberg reported.