Accenture, Unilever in a BPO Deal

Ace technical and management solutions provider Accenture plc (ACN - Snapshot Report) recently clinched a business process outsourcing (BPO) deal with fast-moving-consumer-goods (FMCG) giant Unilever plc (UL - Analyst Report). Financial terms of the 5-year deal were kept confidential.

Per the terms of the deal, Accenture will continue to provide its human resource (HR) services to support 130,000 Unilever staff across 100 countries. The contract is the extension of a previous contract awarded by Unilever in 2006.

Accenture’s HR services include recruitment, reward and HR administration, learning services, learning system hosting, payroll administration, and management and administrative services. The enhanced HR program will enable Unilever employees to get better acquainted with business goals and to upgrade themselves to deliver better services. Accenture will also monitor the performance of the trained employees to gauge whether they match up to management expectations.

Leveraging Accenture’s HR services, Unilever will be able to transform its existing employees as well as new recruits to prospective intellectual assets. This will ultimately help Unilever to grow its business and profitability.

Over the years, Accenture has excelled in providing unmatched outsourcing services to the consumer goods industry. The company’s rich industry expertise led companies to operate their businesses in a superior way with the help of existing resources. It is the reason behind Accenture’s 10-year long relationship with the FMCG giant.

These days most of the large companies often outsource certain business processes (financial, HR, marketing, IT services) to some external entities. This allows the companies to better focus on core competencies to boost profitability. According to Business Processing Association of the Philippines (BPAP), revenues from BPO market could reach $16 billion in 2013 from $13.6 billion projected for 2012.

We believe Accenture to be well positioned to capitalize on the growth prospect. But similar product offerings from the likes of Computer Sciences Corp. (CSC - Analyst Report) and International Business Machines Inc. (IBM - Analyst Report) are concerns.

Currently, Accenture has a Zacks #3 Rank, (Hold). Computer Sciences has a Zacks #1 Rank, (Strong Buy) and IBM has a Zacks #3 Rank, (Hold).