The Big Score

EDS garnered high marks for its operational excellence, and it proved to be an excellent listener. "EDS worked extraordinarily hard at trying to understand what was important to us," says Linda Clement-Holmes, the head of P&G's outsourcing initiative. "We'd make a suggestion, and it would show up in the next meeting's presentation." But EDS was hobbled by the bad corporate news that continued to break throughout the bidding.

As for HP, the biggest concern was the unknown: Could it really handle a deal of this magnitude? In the plus column, P&G already used HP hardware. And the P&G team was pleased by HP's frankness. "With HP, what you see is what you get," says Reedy. "They had less global experience than the other two and less experience in application development and maintenance, but they addressed those issues head-on. They didn't try to hide their weaknesses."

Whatever he told his team, Talbott privately believed that EDS was the front-runner. For starters, EDS had almost snared that mega-outsourcing deal. "EDS put a winning solution on the table," he says. "They lost only because of their external issues." What's more, over the previous 18 months, the EDS team had built up a deep relationship with the P&G side.

Talbott was somewhat comforted by his belief that EDS's greatest weakness played to HP's greatest strength. P&G's IT staffers were still alarmed at the thought of being farmed out to the troubled EDS (see Report From The Past, page 27). At every opportunity, HP's team leaders hammered away at the same message to P&G: "We value your people. We need their skills. They will have great careers at Hewlett-Packard." Talbott was convinced that the soft-and-fuzzy factor -- HP's culture -- just might help him do the hard work of winning this deal.

Stretch Run

Working out of its Blue Ash headquarters, HP's pursuit team lived on a brutal, nearly round-the-clock schedule, with no time off on weekends. Their family lives were tested; at least one team leader reports that his marriage is in trouble. The stress took an enormous physical and mental toll. At a 7 AM breakfast meeting with his HR-team leader, Talbott watched in alarm as the man got up from the table, took a step, and keeled over from exhaustion.

HP got off to a shaky start. At the opening session, where the bidders had their first opportunity to clarify P&G's terms, a rattled HP submitted some 500 questions (compared with 50 from EDS and 150 from IBM). "HP is never going to get out of the weeds on this one," P&G's Clement-Holmes thought to herself. "They're just not going to survive."

But over the next few days, the HP side began to rally. As they prepared for the "Yellow Pad 2" session, when the bidders would present their first round of solutions, Talbott directed his team leaders to print out every PowerPoint slide -- more than 200 in all -- and tack each one up on the conference room's walls. Then the group critiqued them. "Dan Talbott is a fine leader, but he's a real pain in the ass when it comes to preparing presentations," says Crowther, who got his ears burned when he posted a generic slide that failed to convey a succinct message.

All through February and March, the corporate jets from EDS and IBM made frequent trips to Cincinnati. Talbott joked that the two IT-service-industry giants were like "a pair of Sumo wrestlers duking it out -- they weren't even aware of HP." (Grisham, EDS's president of operations solutions, denies that, but concedes, "We thought HP's lack of experience would really work against them.")

P&G's intention was to pick two finalists, who would then fight it out for the contract. But doing so would add months to the process. Forty-eight hours before HP submitted its bid, Fiorina and Livermore flew to Cincinnati on the company's Gulfstream jet. Talbott met them at the airport, and in the limo to P&G's headquarters, they settled on a plan to propose a fast-track offer to the selection team: Bypass the semifinals, select HP, and the company would commit to negotiating the final contract in record time.

The two HP executives met with Filippo Passerini, P&G's intense global business-services officer, and his team in a 16th-floor conference room. The session lasted for two hours. As it drew to a close, Fiorina made them a promise: "If you select HP, we will be your Wal-Mart." Her message struck a powerful chord. Wal-Mart is P&G's largest customer. P&G is Wal-Mart's biggest vendor. Neither can succeed without the other. "I was trying to convey, in pretty tangible terms, that I get it. We were competing for a bet-your-business relationship," says Fiorina. "And I wanted them to know: We intend to deliver."