More Contracts for Accenture

Accenture Plc. (ACN - Snapshot Report) recently won a three-year deal from Italian Medicines Agency (AIFA) for the development, building and maintenance of an integrated Medicine Evaluation System.

According to the contract, AIFA will be using Accenture’s consulting and IT services, which is going to support AIFA’s administration and medical technology processes.

Accenture’s implementation of certain technical solutions will also help in strengthening AIFA’s relationship with end users.

Separately, Accenture is helping the insurance company AXA in streamlining the financial processes in AXA’s European operations.

This is basically under a multiyear deal, which was initiated in 2009. According to the deal, Accenture is helping AXA develop a SAP-based technology platform. This will primarily take care of the centralized finance and accounting (F&A) processes, which includes payables management, accounts receivable, month-end close and balance sheet reconciliations. The regions covered under this program include France, Italy, Ireland, Portugal, Spain and the U.K.

This should have a positive impact on Accenture in the near to mid term and also generate new business opportunities for the company. Other technology companies, such as Hewlett Packard Company (HPQ - Analyst Report) and Dell Inc. (DELL - Analyst Report) have also realized the increasing potential of the consulting segment and are coming out with their own solutions to tap the opportunity.

This apart, Accenture is also witnessing incremental growth from technological changes such as SaaS/cloud, mobility, analytics and digitization. Particularly, SaaS and cloud computing are other areas for the company’s growth.

Accenture’s comprehensive service offerings have made it a key IT service provider. A large product and service base has also led the company to the top spot in the market. Moreover, government orders continue to flow for the company.

We are encouraged by the steady flow of new businesses and believe that the trend will continue. However, increasing competition from IBM Corp. (IBM - Analyst Report) and a cautious spending environment may temper its growth prospects.

The company has a Zacks #2 Rank, implying a short-term Buy rating.