Another Deal Win for Accenture (revised)

Management and technology consulting major Accenture plc (ACN - Snapshot Report) announced a deal  with 12 southeast Minnesota counties for the development of a human services delivery model focused on shifting them from a county-based to a regional approach. This is partially funded by the Bush Foundation.

Accenture would be instrumental in laying out a strategic plan, including the business case, redesigned operating model and implementation roadmap for the development of a multi-county framework for human services delivery.

Although the terms of the deal were not disclosed, we believe that this is an innovative venture, which may also work for other counties in the US, thereby generating a new line of business for the company.

In a separate announcement, the company also introduced “Accenture Citizen Self-Service Portal Version 2.0,” which will enable citizens to electronically access their caseworkers as well as the benefit application process. The portal is expected to provide greater self-sufficiency for social service beneficiaries, thus facilitating further agency expansion and opening up a new channel for citizens to interact with government case workers in a secure environment.

This software is specially designed for public service to help meet the needs of social service agencies and the people served by those agencies. This will enhance the company’s Public Service Platform and will help public agencies better manage human services delivery costs.

The deal flow and new business initiatives continue to flow for Accenture, and we expect the momentum to continue based on the company’s decision to continue to invest in priority industries (such as communications and public services) and emerging markets, where it will focus on further building its brand value. We believe that the company’s confidence in adopting such a strategy in the backdrop of lingering global concerns is powered by its five consecutive quarters of outperformance.

However, increasing competition from IBM Corp. (IBM - Analyst Report), a strained spending environment and Accenture’s broad European exposure may temper growth prospects to some extent.

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

(We are reissuing this article to correct a mistake. The original article, issued Friday, should no lonbger be relied upon.)

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