SAP-Accenture Team to Develop Solutions for Oil & Gas Firms

Enterprise application software provider, SAPSAP extended ties with professional services provider, Accenture plc ACN , by inking a deal to develop innovative cloud-enabled solutions for the oil and gas space.

About a year ago, SAP and Accenture had entered into a partnership to accelerate the core development and go-to-market capabilities of cloud-powered SAP S/4HANA.They are working on critical client areas, including development, go-to-market, customer support and outcomes.

In Oct 2016, the companies had announced their plans to develop state-of-the-art predictive analytics solutions for the utilities industry, in a bid to improve their asset management. Going forward, the companies plan to put forth a string of novel solutions, thus aiding digital transformation of their clients in different industries.

Product Details

Leveraging on SAP's proprietary platform - SAP S/4HANA - the technology giants are willing to develop two digital solutions that will likely bolster bottom-line performance for the oil and gas operators. In particular, these jointly developed solutions are expected to raise downstream operating margins and upstream production, while slashing costs and risks simultaneously.

One of the solutions, Connected Hydrocarbons Logistics solution (CHL), has been designed to manage the total inventory of oil and gas companies on a real time basis, boosting the efficiency of the hydrocarbon supply chain. This will allow the oil companies to access SAP's vast range of technology portfolio, including SAP S/4HANA software, SAP HANA Cloud Platform and SAP Fiori user experience to connect with suppliers and partners, slash working capital and secondary costs.

The other solution is dedicated toward supporting the upstream operations' value chain. These will include offering solutions and services, such as Upstream Operations Management, SAP UOM and Accenture Upstream Direct, to enhance upstream operations. Moreover, SAP is advancing its Predictive Maintenance and Service solution for oil companies which will enable them to compound production and reduce maintenance costs.

Industry Needs to be Met

Meanwhile, oil and gas clients have a pressing demand for capabilities, like real-time view of product inventories, need to predict asset failures and decide the best course of action while repairing them. Henceforth, SAP's two digital solutions will take care of these needs.

In addition, company findings suggest that 80% of customers deem these capabilities important, but less than 5% of them have access. This unlocks fresh sources of revenues for SAP . Volatility in the oil and gas prices and reduced capital spending have raised the need for optimizing upstream production and cost reduction. This makes SAP confident about the future market traction of its latest offerings.

Aiding Digitization of Clients

SAP has been proactively collaborating with leading IT frontrunners to bolster its innovative quotient and help clients in their journey of digital transformation. As the enterprises are inventing business models and making a transition toward digital businesses processes, SAP is supporting its partners in such transition through continual co-innovations. Encouragingly, shares of the company have returned 17.8% over the past six months, outperforming the Zacks categorized Computer-Software industry average of 12.0%.

With business enterprises leveraging on state-of-the-art technology to outshine peers, we believe that SAP's market-leading portfolio will continue to witness increased demand, thus supplementing the company's financials. It should be noted that brokers are on the sidelines for this Zacks Rank #3 (Hold) stock as its earnings estimates remained unchanged over the past 30 days. The Zacks Consensus Estimate for full-year 2016 also remained unchanged at $3.12, over the same time frame.

Stocks to Consider

Some better-ranked stocks in the broader technology space are Exa Corp. EXA and Imperva, Inc. IMPV , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Notably, the consensus estimate for Exa Corp.'s fiscal 2017 narrowed down to a loss of 17 cents from a loss of 23 cents over the past two months.

Similarly, the consensus estimate for Imperva's full-year 2016 edged down to a loss of $2.23 from a loss of $2.41, over the last 60 days.

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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 Nasdaq, Inc.

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

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