Accenture, IRS in 10-Year Pact

Globally accredited management and technology consulting company Accenture plc (NYSE:ACN - News) will now provide information technology (:IT) services to the Internal Revenue Service (:IRS). Financial terms of the 10-year contract were kept confidential.

Per the agreement, Accenture will bring three of IRS’ web portals under one umbrella. The company will combine the consumer-facing website, IRS.gov (designed by Accenture and one of the most popular website for the tax payers), the registered-user portal for tax preparers and the agency’s employee intranet.

The new IT infrastructure will help IRS to streamline its operations, while making the whole system easier for tax payers. Accenture shares a long-term relation (more than 20 years) with the IRS. In the past, Accenture served as a trusted partner of the IRS, helping the agency implement a number of new systems, processes and capabilities.

We notice Accenture making prudent moves to attract federal deals frequently. In January, the French Directorate of Legal and Administrative Information selected Accenture’s IT support services for developing G-Cloud (customized cloud services for Governments) to regulate services for citizens and administrative officers. Accenture’s services were also adopted by the FBI.

In an effort to better serve government clients, Accenture recently formed the U.S. Federal Advisory Board. The company is also inviting experts with years of experience in Fed activities to join the board. This will provide Accenture more insight into the current requirements to deal with critical IT operations.

Therefore, the expertise should strengthen Accenture’s position with government departments, helping to secure a larger number of government contracts, thereby boosting its revenue streams.

However, while Accenture’s prospects looks bright, increasing competition from IBM Corp. (NYSE:IBM - News), a strained spending environment and Accenture’s broad European exposure may temper growth to some extent.

Currently, Accenture has a short-term Hold recommendation, denoted by the Zacks #3 Rank.

Read the Full Research Report on IBM

Zacks Investment Research

• Read the analyst report on ACN,IBM