Technology and outsourcing company, Accenture Plc. (ACN) has recently won a seven-year business process outsourcing agreement from a Swedish Steel manufacturer, SSAB. Accenture would provide finance & accounting, customer care and procurement services to SSAB.
As per the agreement, Accenture would provide the much needed support to SSAB across selected operations in Europe and help the company to improve its operational flexibility so that it can readily adapt to the changing market demands. Moreover, Accenture’s cost-effective service delivery model will help SSAB going forward.
Although this is a somewhat new area of business for Accenture, so the company is in the process of gathering a set of skilled people, who can cater to the manufacturing industry clients such as steel and other heavy industries, that too across geographies. In order to serve its clients in a better way, Accenture formed the client advisory board. Therefore, it can be easily conferred that Accenture is making all possible moves to diversify and widen its presence.
This approach will provide Accenture more insight into the current requirements to deal with critical IT operations in steel manufacturing companies. It will also help the company win more deals, going ahead.
The deal wins at regular intervals provide the much needed support to the company’s revenue base. However, the possibility of winning new consulting projects in the near future demands special attention for the consulting business.
On the other hand, companies like Cognizant Technology (CTSH) and IBM Corp. (IBM) are providing good services to the clients at competitive rates. This coupled with a not so encouraging spending environment and Accenture’s broad European exposure (roughly 40.0%) may rationalize growth prospects to some extent.
Accenture currently has a Zacks Rank #3 (Hold). However, stocks like Information Services Group Inc. (III), with a Zacks Rank #1 (Strong Buy), are worth considering.
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