EDS said Tuesday it has combined several of its business-process-outsourcing groups into a new division led by Guillermo Marmol, formerly president of BPO consulting firm Marmol and Associates. EDS "needs to think about BPO on a strategic level," Marmol says of his role as VP for the new BPO portfolio group.

In an effort to establish a bigger presence in a market that research firm IDC says will grow to $306 billion by 2006, Marmol says EDS will focus on strengthening its already-significant customer-relationship-management and financial-process-management practices while looking to become a player in markets such as human-resources outsourcing that are dominated by entrenched players.

As part of the strategy, Marmol says, EDS is expanding a number of service centers in Canada and India. "It's a factory approach that gives us a cost advantage over most competitors in the market," Marmol says. Business-process-outsourcing work accounts for about 13% of EDS's total revenue, but Marmol says that figure will increase as the market heats up.

Observers say EDS has a solid foundation in business-process outsourcing but has fallen behind competitors such as Accenture and IBM when it comes to bringing out new service offerings. Bringing in an outsider to head a new group dedicated to the market is a positive sign, says Humberto Andrade, a Technology Business Research analyst. "They have been sitting idle for a while," he says, "so this is a move they could not postpone any longer."