EIS – ahead of its time

 

Ericsson Information Systems (EIS) was the name of the company established by Ericsson on January 1, 1982 when the Information Systems business area was created.

This business area was responsible for such sectors as data networks, business communications and office products. At that time, information technology was an unknown concept. The sector in which Ericsson was strengthening its position was called office automation.

In conjunction with the establishment of EIS, Ericsson changed its corporate logotype. This was no coincidence. On the contrary, the planning for the new company was one of the contributing factors. Because EIS would be targeting tens of thousands of new customers around the world, a new and clearer profile was needed.

The core of EIS consisted of what was formerly Datasaab, a company acquired by Ericsson in the late 1980s that already had a firm footing in the market with its Alfascope data terminal. Visionaries within Ericsson began to dream about how the telephone would eventually develop into a more versatile terminal that would also be connected to data networks.

Ambitions were enormous when EIS was formed. The goal was to implement the paperless office. The vision was clearly expressed in the company's internal newsletter Erinfo no. 10 from 1982: "The product portfolio spans a very broad spectrum in the areas of data processing, communications and office automation, which will eventually converge into an integrated information system focused on the individual workplace and provide a complete system for processing information, including the transmission, processing, storage and presentation of voice, data, text and images."

The company was undoubtedly ahead of its time in expressing such a daring vision in 1982. Neither the technology nor the market were ready for this vision. The vision was eventually realized, but not until more than a decade later.

The company got off to a flying start, however, with a very extensive global advertising campaign. Volumes increased and mind share among customers grew, but problems with profitability arose almost immediately. Breaking into the US market, which was the home of computing, proved to be an insurmountable task. Ericsson's own personal computer, Step/one, was not a success in the brutally competitive and still very young PC market. Ericsson's own stores for office equipment, which operated under the name Ericsson City, did not attract customers in the numbers anticipated.

In addition to EIS, the Information Systems business area included such vastly different companies as AutoTank, Facit, Addo, Z-tryckerierna and ID-kort. Integrating these very different business cultures proved difficult.

The entire business area was re-structured in 1984, but problems with profitability at EIS continued. Further streamlining of the company's diverse product portfolio was necessary, and the business focus was therefore changed from product sales to a solutions orientation and a profile as a systems supplier. Towards the end, EIS also began to earn money. In its final fiscal year, the company reported sales of nearly SEK 10 billion.

It was clear, however, that the battle for the computer market was over and that Ericsson had lost this round. The concept of core business quickly gained ground, and personal computers were not considered core business.

All computer operations were sold to Nokia in 1988. Further development of the digital business system MD110 and other operations within the area of business communications were transferred to the newly established company Ericsson Business Communications.

The Ericsson Information Systems epoch thus came to an end. The Swedish business daily called the EIS adventure "the most expensive management training program in the history of Swedish industry". While it was certainly an expensive venture, EIS provided valuable lessons that would be applied in the IT revolution of the 1990s.

Author: Thord Andersson & Kari Malmström

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