Everything including deal wins, technical collaborations and an expanding project pipeline seem to be going in favor of Accenture Plc. (ACN). All three business segments namely Consulting, Technology and Outsourcing are performing well. The company is also coming up with innovative strategies to combat the increasing competition.
Over the years, Accenture has pulled together a team of expert professionals with well diversified competencies. Some of these professionals are also home-grown, as Accenture has spent substantial economic and intellectual resources to develop the team. Accenture is also committed to the long-term development of the employees, which ultimately reflects in the company’s business health.
An efficient management team helps to woo new customers with new innovative solutions.
The company has been a forerunner in providing quality and innovative solutions to its clients and is particularly focused on its services business.
The company has been instrumental in providing solutions related to cloud computing, system integration, and defense and supply chain management. It also helps government departments to streamline workflow.
Accenture’s comprehensive service offerings have made it a key IT service provider. Its large product and service base has also led the company to climb to the top spot in the technology consulting market.
The Cascading Effect
The overall competence in every segment has helped the company win numerous deals over the years one of the recent and most notable ones being the contract from the insurance company Crum & Forster. This apart, the company also won a Biosurveillance contract. The U.S. Department of Homeland Security (DHS) awarded a $3 million contract to Accenture to improve the biosurveillance operations of the Office of Health Affairs (:OHA).
Moreover, Germany’s largest transmission system operator, Amprion Ltd. has selected Accenture to optimize its material procurement function. Accenture will help the latter to enjoy a competitive advantage in a rapidly changing market. This will add to the company’s revenue stream over the next 5 years.
We believe that continued technical innovation will ensure continued deal wins in the near future.
Although Accenture is well positioned for growth, we feel that competition is expected to grow rapidly as the consulting, outsourcing and technology fields are being constantly invaded by new as well as established brands.
Capgemini,Cognizant Technology Solutions Corporation (CTSH), Infosys Ltd (INFY) and Tata Consultancy Services (:TCS) pose considerable challenges for the company. Moreover, IBM Corporation (IBM) is direct competition for the company when it comes to system integration. Although the company is making considerable effort to woo new customers and keep existing customer loyalty intact, counter strategies from these large cap technology companies may result in loss of market share.
Accenture has a unique combination of a customer friendly approach and traditional work ethics. This organization culture has helped the company attract many clients across the world. Moreover, Accenture is a one-stop shop for clients across multiple industries. Accenture has the skill and expertise to cater to projects such as Customer Relationship Management, Change Management, Human Resources Management, Financial Management, Service Management, Marketing Sciences and Supply Chain Management.
On the flipside, the company is challenged by large players. Moreover, the protracted economic slowdown, especially in the European region, increasing regulation as far as government contracts are concerned and ever increasing problems with subcontractors continue to bother Accenture.
Currently, Accenture has a Zacks #3 Rank (short-term Hold rating).
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