FranklinCovey will outsource some of its customer relationship management and information technology systems to technology services provider EDS and will transfer about 400 of its employees to the Plano, Texas-based company. The companies also agreed on a $25 million contract under which FranklinCovey will provide training to EDS employees.
Representatives for EDS and FranklinCovey did not immediately return calls seeking comment Friday.
The deal comes after a $117 million agreement signed between the two companies in the first quarter through which EDS will support Salt Lake City-based FranklinCovey's information services operations.
EDS will take over FranklinCovey's fulfillment, distribution and customer service facilities in Salt Lake City under the new contract. The employees who will join EDS from FranklinCovey will largely come from those departments.
EDS, under the new deal, will also help FranklinCovey develop and market online versions of its products.
The outsourcing should save FranklinCovey $50 million over the course of the deal, said Val Christensen, the company's executive vice president of legal services. The agreement, signed last month, will allow FranklinCovey to focus on providing training and productivity tools to customers, he said.
"We're pretty excited about it," Christensen said. "This frees up a lot of our attention to focus on our core business."
The deal will be good for both companies, said Mike Littell, president of EDS's CRM division. As part of the agreement, EDS will market FranklinCovey's products to its customers. That will help build FranklinCovey's market share and will help EDS serve its clients better, Littell said.
"There's value on both sides," he said.
Earlier this month, EDS cut 400 jobs at its A.T. Kearney management consulting division because of slowing demand for its services. But the consulting company said it plans to add more jobs overall because of several acquisitions and because its first-quarter revenue was up 9 percent.