Accenture
(
ACN
) recently won a $750 million Development, Modernization and
Enhancement (DME) contract from The U.S. State Department. The
government body awarded the contract to Accenture Federal Services,
which will be responsible for technical and consulting support to
the Bureau of Consular Affairs. This contract has a one-year base
period with for four one-year renewal options.
This order has been placed by the DME to modernize technologies
and also to enhance its visa processing facility and passports
renewal facility, at the same time managing the Office of Overseas
Citizens Services that helps citizens to find their lost
passports.
Government deals have always been a strong point for Accenture.
The company has recently been awarded a contract by the State
Department of the Japan government to analyze the supply chain
process and to offer new solutions that will enhance its logistic
management system. Thus, the new and renewed government orders
continue to help the company and increase its business volume.
Previously, the company won a management consulting contract
from Japan's Ministry of Agriculture, Forestry and Fisheries, for
an undisclosed amount.
Moreover, in July 2012, Accenture offered its Electronic Health
Record (EHR) system to Madrid Heath Service. Accenture has been
working with Madrid Heath Service since 2002, to develop a
comprehensive system for recording all possible data related to
patients, and thereby improving the regional healthcare system.
Apart from winning new deals in consulting, the company is
constantly witnessing improvement in demand for its BPO services,
especially in the Financial Services and healthcare segments.
Within the BPO vertical, the U.S. has registered maximum growth.
Weakness in Europe has also benefited Accenture, forcing the
companies in that region to consider outsourcing to reduce labor
costs. However, this might take some time to implement.
We are encouraged by the steady flow of new businesses and
believe that the trend will continue. However, increasing
competition from
IBM Corp.
(
IBM
) and a strained spending environment may curb its growth prospects
to some extent.
Currently, Accenture has a short-term Buy recommendation,
denoted by the Zacks #2 Rank.
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