Richard H. Brown
Chairman and Chief Executive Officer, EDS
AFTER SEPTEMBER 11, TRUST IN EACH OTHER AND HOPE FOR TOMORROW
Chairman: Bill Laidlaw
President, The Empire Club of Canada
Head Table Guests
C. Alexander Squires, Managing Partner, Brant Securities limited and Secretary, The Empire Club of Canada; The Reverend Vic Reigel, Christ Church, Brampton; Neil Woody, "Honour Roll" Student, Humberside Collegiate Institute; Robert Chisholm, Vice-Chairman, Domestic Banking, Scotiabank; Gaylen A. Duncan, President and CEO, ITAC (Information Technology Association of Canada); Sheryl Kennedy, Deputy Governor, Bank of Canada; The Hon. Bob Runciman, MPP, Minister of Economic Development and Trade for the Province of Ontario; Ann Curran, Director, Corporate Development International and 1st Vice-President, The Empire Club of Canada; Terry Lord, Senior Vice-President, Adecco Employment Services; John Hunkin, Chairman and CEO, CIBC; and Michael Murphy, Senior Vice-President, Policy, The Canadian Chamber of Commerce.
Introduction by Bill Laidlaw
Good afternoon--it's wonderful to be back in Canada!
I was in Ottawa this May at the invitation of Andre Ouellet, President and CEO of Canada Post, to discuss the transformation EDS has undergone during the last three years.
It was one of several sessions I've had with our Canadian operations and clients, several of whom--Bank of Canada, CIBC and Canada Post--I understand are in attendance today.
We have 6,500 talented professionals in Canada working on these and hundreds of accounts from coast to coast. Half of our accounts are corporate; half are government. All total, we have a $1.6 billion business in Canada and I'd like to help it grow.
However, my pleasure in returning to Canada this afternoon is tempered by its timing; by the memory of the attack that changed all our lives one month ago today.
As you might expect, given the importance of this audience, I have been thinking about what I might say to you for some time. After the events of September 11--and the subsequent military response--what I had planned to say no longer seemed right.
In my view, the atrocities committed last month were not so much an attack on a certain people or place, as they were an attack on the fundamental trust that holds civilisation together. The terrorists desperately want us to stop trusting ourselves and our institutions. We cannot let this happen.
You know, with 128,000 employees around the world, and operations on every continent, EDS has a unique line of sight through our global community. We work in all sectors. EDS connects business to business, but we also connect business to government, governments to their
citizens and governments to each other. We see the importance of trust. We know it is the basis for nation-to-nation relationships, for international commerce and for civilised society.
In good times, we help clients connect with their customers or citizens, accelerate their growth and help them gain market share. In difficult times, we help take out costs, enhance effectiveness and improve productivity. As economic conditions worsened throughout this year, EDS was there, helping our clients to meet the economic challenges and to work more efficiently and effectively.
When the events of September 11 occurred, we proved our support and our worth in a wholly different way. We were the company that helped other companies get up and running. We helped our clients keep their customers' trust. For example, our American Express team helped that client, formerly housed in the World Trade Center, set up operations across the river in New Jersey. By late on the day of the attack, American Express was able to process about 19,000 transfers for a total of $14.3 billionroughly 70 per cent of the transactions its customers had entered! AmEx customers could believe in their bank. You see, data has no nationality; data has no country of residence. Because AmEx data was dispersed and protected in a remote EDS location, we were able to put them back in business immediately.
EDS protects our clients' data and we hold their core intellectual capital and digital assets in safekeeping. So if their physical infrastructures are attacked, even knocked down, their core information assets remain sound and whole. With their information safe, we reconnect them to their technology backbones, restore their digital operations and then they make it possible for their customers to get medical prescriptions, access money and continue to travel--all the things terrorists seek to take away. It's what EDS does. We keep systems running. We build trust.
The trust we have earned from clients has opened doors to collaborative partnerships and a perspective shared by few. Consider this: We are a company honoured to have Ehud Barak, the former Prime Minister of Israel, as a consultant. I've come to Toronto today directly from the Middle East, where I discussed e-government initiatives in Dubai and Bahrain. Clearly, EDS is an active citizen of the global village--a village attacked by outlaws last month.
Make no mistake, September 11 was not just an attack on the United States, nor the struggle of poor versus rich, nor a clash of religious beliefs. September 11 was an attack on the construct of the nation state and the global civilisation we have built upon it. September 11 was about those who would gladly plunge the world into chaos and anarchy to suit their needs giving them the freedom to act with the impunity enjoyed by the bandits of Europe during the darkest days of the Middle Ages. September 11 was an assault on our people--yours and mine--and on the solvency of our economic structure and on the stability, the freedom and the protection the global community of trading nations provides.
And you can believe this with certainty. Those who perpetrated these acts will seek to strike again. They are scrutinising our collective response for potential weakness. I say collective because as individuals, nations and businesses we are bound together by a vast web of treaties, laws and rules of engagement. Though sometimes complex and inefficient, these rules have prevented us from devolving and dropping into chaos. They support our global civilisation. The health of local economies and the global economy go hand in hand. They don't stand separately. The global economy cannot survive on its own, in and of itself. It has to have a structure, a framework, rules of law, so you can make a contract and be held to it; so you can move your goods from place to
place with security. If that concept is attacked and wounded too deeply, it will not stand.
You have already seen and felt the economic impact of a single, deep wound upon an already ailing global economy. Already slumping American markets took a beating with once stalwart companies running for cover, increased layoffs and unemployment, a severely injured stock market and a lack of consumer confidence in general. Canada, too, was affected, with airline layoffs and a slackening in consumer confidence. When asked about the Canadian economy following the attacks, 62 per cent of Canadians surveyed expected it to "slow down" during the next year. (Ipsos-Reid, Sept. 21, 2001)
Perhaps the biggest casualty in all of this is trust--the trust of the people. Trust in their country's security. Trust in their economy. Trust in their personal safety. We must rally immediately behind the new offensive on terrorism to restore confidence and trust. Otherwise, fear will rule the day and all orderly rules of engagement and all stability will crumble before our eyes like the twin towers of the World Trade Center. And countries like ours will no longer stand strong and secure.
Security has always been important to both our nations. It's what we founded our company on--an entire industry on--nearly 40 years ago. It's how we gained the trust of clients and our leadership position in data management around the world. But in the wake of the events of September 11, a seismic shift has taken place in the way people feel about security. In fact, recent polls have signalled a willingness among Americans to trade some conveniences for security. As of mid-September, 55 per cent believed it would be necessary to give up some civil liberties in order to curb terrorism, compared to only 29 per cent who felt that way in 1997. According to a September poll, Canadians feel the same threat. Fifty-five per cent of respondents believe there are international terrorists within Canada just waiting to attack Canadian civilians. And only 39 per cent are confident the Government of Canada and its security services are capable of preventing these attacks.
Citizens around the world expect their governments to assure public safety and national defence. Leaders ranging from city managers to ministers of state are reassessing their roles in prevention, mitigation and response. The private and public sectors must come together to create answers. Everyone in this room has a responsibility to get directly involved, whether you're in government, the financial industry, the high-tech industry, the health care or transportation industries. We can't, as individual nations, look to other nations to shoulder the burden. And we can't, as individual businesses, expect other businesses to solve these issues. We have to work in concert.
We at EDS are ready. We're serious about putting our technological expertise and our commitment behind this fight. I believe there will be many opportunities to apply the best practices of our respective industries to many of the issues at hand. From a business standpoint, the attack emphasised the need to digitise processes. By this, I mean electronically capturing and storing records and data in secure, remote locations, creating redundant systems and having business continuity plans in place. In fact, EDS has a solution in place today that can provide a quantum leap in airport security. It is a system operating at Ben Gurion Airport--the most secure in the worldthat employs biometrics to ensure people cannot enter the country with false identification. This system, not only enhances security but it enhances efficiency as passengers can receive security clearance within 20 seconds. Expanding on this capability, a data file could be created that accompanies passengers--and their bags--to their final destinations. Government and airline databases can be linked for fail-safe security clearance. The result? A point-to-point security solution for the airline industry, in
which you as a passenger know the people on either side of you are indeed who they claim to be and are safe travel companions.
The point is, while we're stepping up security, the movement of people and goods must not be brought to a grinding halt. I know this has been a topic of great discussion here in Canada--how to ensure the security of our mutual border and maintain the flow of goods. Applying our logistics expertise, we could ease the increased congestion at the U.S./Canadian border enabling both people and the shipments of goods to pass through in a timely manner. In logistics, we provide information about a shipment--what it is, where it is and what route it will take. All backed up by information systems and databases that process data in real time with no possibility of downtime or security breaches. The technology and databases to provide these solutions are in place today. EDS has the ability today to implement them and has a track record of doing so securely. What is required is government commitment to move forward, considerable but not outrageous funding and agreement on just how far to go.
In the United States we have been forced to rethink how the Constitution applies to today's technologies. Congress was asked to consider a number of proposals to combat terrorism. I can assure you they were not taken lightly. Our system obliges Congress to take a reasoned and balanced approach to ensure our constitutional rights are preserved while making sure our laws reflect today's realities.
The opportunities to address these realities with technology are many: We must find better, more secure ways for sharing information across both local and international boundaries, among the law enforcement and financial communities and those engaged in border access control. We may have to find more secure and private ways for private entities to gain access to government databases to identify potential terrorists
using financial or transportation systems. Additional resources will most likely be needed for modernising communications systems and assuring better connectivity across local, state, national and international jurisdictions. And, we will need to think seriously about secure wireless communications.
Together, we must bring forth the best solutions to address our most urgent needs. We must move from a purely tactical approach to a strategic focus on global system survivability. Again, collaboration of this sort will require trust. We expect business as well as local, regional and national governments around the world will increasingly turn to information technology and to digitisation to create more efficient, more secure processes to respond to these new challenges. EDS is one of very few companies able to create these processes and we do it while generating significant savings because of our existing scale, capabilities, infrastructure, and experience. We are the IT solutions leader delivering improved performance, enhanced security and billions of dollars in savings to our clients each year. With outsourcing services alone, EDS can typically manage IT systems and infrastructures for 20 per cent to 30 per cent less money than clients can on their own--on day one! From the boardroom to the back room, whether it involves e-business, human resources, payroll, or finance and accounting, we offer end-to-end solutions to ensure our clients meet their business challenges no matter how the market changes.
As leaders turn to digitisation, I believe they have little choice but to implement large-scale IT hardening and operations--continuity processes on an unprecedented scale. They must:
• Decentralise globally: Companies can no longer pool their most critical people and technologies in a limited number of locations. Decentralisation on a global basis, using IT outsourcing if necessary,
significantly reduces the likelihood of irreparable loss.
• Build continuous parallel operations: Enterprises that haven't already done so must build redundant, physically separate systems so one system can seamlessly take over if another goes down.
• Create emergency communications infrastructures: Mission-critical systems can be stabilised rapidly when alternative disaster communications networks are in place.
• Protect people: Information technologies depend on the people who design, programme, implement, maintain, and upgrade them. Those professionals must be protected by detailed evacuation plans, equipment, and training.
In our rush to reinforce the security of our physical assets, we must not lose sight of protecting our information assets from cyber attacks. At low risk, a terrorist organisation can target and attempt to disrupt the information and networks that support crucial day-to-day workings of civilian, commercial and military systems, including air traffic control, power grids, stock markets, international financial transactions and logistics controls.
In all of our efforts to protect ourselves, our security and our economies, we must be sensitive to the issue of privacy. To be sure, privacy is a delicate issue, but it must now be dealt with decisively. Too little regard for privacy will turn individuals against governments and companies--exactly what terrorists of all types desire. This, in turn, will generate a massive loss of trust, that sacred bond important for any relationship. On the other hand, too much scrutiny can choke the flow of information, affect security and impede commerce. The ideal is for companies and governments to have the information they need to serve you better, but without prying unnecessarily into your lives. Private enterprise, too, needs guarantees of confidentiality so that it can report cyber
attacks on its information assets, for example, without fear of liability or being hung out to dry by the media. EDS, for its part, will ensure privacy according to its clients' needs. There is a lot EDS can do to enhance security for the many without violating the privacy expectations of the individual. And really, this is where discussion must begin, with expectations. While we all value privacy, different cultures view privacy through different lenses. Americans, for example, take a pragmatic view of privacy depending on the context. In the U.S., medical records, financial information, and children's online information must all be assured high levels of privacy, while many other consumer transactions are less regulated. How we reconcile these variances between nations will be key to solving international security issues.
I think it's safe to say everyone wants to know at the very least what information is being collected and what will be done with it. They want to know that it will only be used to protect or serve them better. We need a new privacy covenant between government, business and citizens. Governments are currently collaborating with each other to better share information. Industry leaders should collaborate, too. And this will be a focus of discussion at the Business Roundtable in Washington next month. At the core of this whole discussion on finding the right balance between privacy and security is trust.
Without trust, collaboration is not possible. Trust is the essential element that will bind us together and enable us to move forward as a single, united front. It is a bond that once destroyed weakens our resolve and is not easily restored. Everything we do must rebuild and underscore trust.
Trust that we can make airline travel safer and more secure, without reducing civil liberties or expectations of privacy.
Trust that we can go forward enabling electronic commerce with no risk that personal data will be misused. Trust that we can empower law enforcement to better track and arrest criminals without fear that civil liberties will be constrained.
Trust that agreements among nations will empower, not inhibit their citizens.
There's no doubt we've entered into a new milieu--a new era--and as a result a new and uncertain economy. Terrorists would like us to believe it's about rich and poor. It's about East and West. It's about the primacy of a religion's teachings. But it isn't about rich and poor. It isn't about East and West. It isn't about one religion versus another. It's about stability, freedom and protection for everyone. It's about trust.
These times call for a "new collaboration"--a show of unity. Unity between public and private sectors and between nations.
These times call for a renewed trust and a renewed confidence in our ability to win the fight against terrorism.
Finally, these times call for a personal response from every leader in this room, a response that erases all doubt in the minds of those who would strip us of the ideals, the way of life we hold so dearly--that we will overcome.
A line was drawn on September 11.
We must answer the hellion's call with trust in each other and hope for tomorrow.
The appreciation of the meeting was expressed by C. Alexander Squires, Managing Partner, Brant Securities limited and Secretary, The Empire Club of Canada.