Accenture Wins Outsourcing Deal

Technology services and outsourcing company Accenture Inc. (ACN - Snapshot Report) announced that it has been awarded with a 3-year contract by Norwegian aluminum producer Norsk Hydro ASA. Financial details were not disclosed.

As per the terms of the contract, Accenture will provide technical support and maintenance services globally to two of Norsk Hydro’s SAP systems. With these outsourced services, Norsk Hydro expects to maximize the efficiency and cost-effectiveness of its SAP systems, which will help the company serve its customers with innovative ways.

The service will be provided to Norsk’s customers worldwide with the help of Accenture’s Global Delivery Network, through its operating centers in Germany and India. The above-mentioned services will be offered by October 2010.

Accenture shares a long-standing relationship with Norsk Hydro. It has been providing consulting and technology services to the latter since 1980. We believe that further expansion of the relationship is possible, going forward. Also, Accenture’s ability to increase penetration at existing customers is indicative of the quality of its services.

Accenture has had success across various industrial sectors. Recently, Accenture received a contract from the University of North Texas System (UNTS) to set a five-year information technology plan for implementing shared services within the campus.

Earlier this month, Accenture won a healthcare deal from the Singapore Ministry of Health. Under the terms of the contract, Accenture will implement the National Electronic Health Record (NEHR) system across Singapore, to help the local government achieve an integrated healthcare structure and establish it as one of the first countries worldwide to use the NEHR system.

We are positive about Accenture’s improving business trends as evident from the healthy growth in revenue and bookings in its fiscal third quarter.

However, we prefer to remain cautious until the revenue growth rate accelerates. Moreover, we believe that the recent economic turmoil in Europe will considerably rationalize Accenture’s growth prospects.

Accenture currently has a Zacks #3 Rank (short-term Hold rating).

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