Accenture's New Innovation Center - Analyst Blog

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Accenture Plc. ( ACN ) recently announced the launch of an innovation centre for SAP in Melbourne, Australia. The move is consistent with the company's growing focus on Enterprise Resource Planning (ERP).

This innovation center is expected to offer efficient and effective SAP solutions for enterprises and government organizations in Australia. The newly opened center is an addition to Accenture and Telstra's existing innovation agenda and will further enhance the alliance with SAP Australia and New Zealand.

Accenture's network of innovation centers is co-located and also takes into account and leverages the skills and expertise at locations across different centers. The new Melbourne center is an addition to Accenture's global network of innovation centers in support of SAP solutions located across different American and Asian countries.

Accenture's comprehensive service offerings have made it one of the leading IT service providers. A large product and service base has also placed the company well compared to its peers. Accenture has regularly won deals from all industrial sectors as well as the federal vertical.

Industry experts, however, are a bit worried about foreign exchange headwinds that can have a negative impact on its revenue as most of the company's revenue comes from the international market. Although Accenture's track record is good, the ongoing difficult economic conditions in Europe could affect Accenture's revenues going into fiscal 2013.

The company recently reported its third quarter 2012 earnings per share (EPS) of $1.03, beating the Zacks Consensus Estimate of 99 cents. Earnings increased 11.3% year over year aided by higher revenues and margins and lower share count. Whereas the total cash position of the company stood at $5.6 billion.

The company is also witnessing growth across America and the Asia Pacific, although the EMEA region is seeing tough times. Accenture's deal prospects look bright and its endeavor to expand in Asia is also encouraging, which has renewed business interest in the region.

The ERP innovation centre is another line of business that the company may focus on in the region. With the continuous emergence of hi-tech innovations, Accenture could ink deals in technology services, as well as outsourcing and consulting services.

Although, the company is doing well as a fully scalable SAP solutions provider, but the same business model may be developed by other IT companies, which could enhance their business volume.

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


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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