The outsourcing and consulting major, Accenture Inc. ( ACN ) recently won a nine-year contract from the California Department of Consumer Affairs to develop and implement a licensing and enforcement system, known as BreEZe. This is expected to help the government department maintain its day-to-day operation and functioning.
This new system is expected to facilitate the licensing and enforcement system of the company. It will be used mainly for protecting and serving consumers. The system would be particularly beneficial for the agency, as it serves a large number of customers (100 business and professional categories, including doctors, dentists, contractors, cosmetologists and automotive repair specialists).
The company is a leading provider of public service operations best practices to government agencies. The company will deliver an integrated enterprise licensing system to replace numerous disparate and outdated legacy systems that have made citizen interaction with the Department and licensing process complex. Moreover, this new integrated system will enhance the online capabilities to serve citizens and businesses.
Accenture is winning deals at regular intervals, which ensure solid cash flow for the next few quarters. The company recently won a 7-year information technology ( IT ) application servicing deal from the United Kingdom Department for Work and Pensions (DWP).
The deal value could be €50 million to €70 million per year, depending on Departmental demand for IT services. Accenture will offer its technology and services to develop, maintain and support a variety of the DWP's customer-oriented operations.
Apart from winning new deals from government and non-government customers, the company is also expanding operations through new acquisitions. We are encouraged to see Accenture make investments for growth in a turbulent economic backdrop and expect the company to emerge stronger when market conditions improve. Based on new business deals and improving business fundamentals, Accenture provided an upbeat revenue and earnings guidance for fiscal 2012.
However, increasing competition from International Business Machines Corp. ( IBM ), a strained spending environment and Accenture's broad European exposure may temper growth prospects to some extent.
Currently, Accenture has a Zacks #3 Rank, which implies a short-term Hold rating.
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