Posts Tagged ‘Accenture’

Accenture results: Takeaways for Indian IT

September 29th, 2014

Accenture Plc reported decent results for the year ended August, although its outlook for the next year is a tad disappointing. The company said it expects revenue to grow between 4% and 7% in constant currency, despite the fact that revenue grew 8% and 7%, respectively, in the preceding two quarters. Outsourcing31

Also, according to consensus estimates, the firm is expected to grow 6% in dollar terms in the year till August 2015; adjusted for a forex headwind of 2%, dollar revenue growth is expected to be between 2% and 5%, according to Accenture. US-based analysts at Citigroup Research said in a note to clients, “The Q1-FY15 revenue guide of $7.55-7.80 billion (consensus $7.8 billion) implies a possibly slower start to the year in spite of acquisition impact.” Not surprisingly, the Accenture stock dropped a bit after the results were announced; the shares have declined 3.4% year-to-date.

Indian IT stocks shrugged off this news, and the National Stock Exchange’s CNX IT index rose marginally. The index continues to be perched close to its all-time highs. For some time, Indian IT stocks have charted their own course, on the back of market share gains by companies such as Tata Consultancy Services Ltd.

In mid-July, International Business Machines Corp. (IBM) reported weaker-than-expected results for its services business. Later, Citi’s India-based analysts wrote in a note to clients that most factors that affected IBM’s services business were not applicable to Indian IT firms. “Pricing pressure from competitors—offshore competition and commoditization of lower end services may be putting some pressure (on IBM)—an industrywide phenomenon. For Indian players, pricing is flattish as commoditization at the lower end is largely offset by increase in higher priced service lines such as digital (services).” Another factor that has helped sustain investor sentiment for Indian IT is that the rupee has depreciated by more than 5% in the past four months against the dollar.

It must also be noted that not all aspects of Accenture’s results were disappointing. In the quarter ended August, the company did better than expected, with reported revenue being higher than consensus estimates. Much of the upside came from the outsourcing business, while the amount of new business bookings was lower than estimates, at $8.3 billion.

The company said in a call with analysts that consulting bookings last quarter reflected good demand for systems integration and management consulting.

But as Citi’s India analysts point out, the key takeaway from Accenture’s results for Indian IT is the company’s use of cash. Last year, it gave back 93% of its cash flow from operations to shareholders through dividend and share buybacks. This has helped the company sustain valuation multiples. Indian companies could take a leaf or two out of Accenture’s books. Many of them are holding large amounts of cash, resulting in mediocre return for shareholders. Returning cash or making prudent acquisitions is the need of the hour as growth continues to slow off a high base.


IT stocks gain on Accenture results

September 26th, 2014

Following Accenture reporting better-than-expected numbers for the quarter ended August and saying it expected better profitability going ahead, information technology-stocks gained on the BSE. For the quarter ended August, net revenue stood at $7.8 billion, anOutsourcing30 increase of 10 per cent, the first double-digit revenue growth in about two years. While new bookings stood at $8.3 billion, consulting revenues were $4 billion, up six per cent compared to the year-ago period. Outsourcing revenue stood at $3.8 billion, up 15 per cent.

Till the previous quarter, the consulting segment had been a drag on the company.

The rise in outsourcing revenue presents a positive picture for other IT companies, too; the growth in consulting revenue means discretionary spends are back, a big positive for Infosys.

The Accenture management said the company would continue to see similar momentum in growth. “On revenue growth, by type of work, outsourcing…in our guidance, we’re thinking in the high single-digit to low double-digit range. For consulting, probably relatively consistent with this year, it could be a click lower or a click higher…in that kind of a general range,” said Chief Financial Officer David Rowland.


Accenture, Capgemini, Entercoms and Havi Global Solutions rated top SCM outsourcing providers

September 23rd, 2014

Accenture, Capgemini, Entercoms and Havi Global Solutions have been named the top four service providers for supply chain management (SCM) business process outsourcing (BPO).Outsourcing14

The HfS Blueprint Report said the SCM BPO market is a new area with “huge untapped potential”. The current market is around $1.5 billion (£918 million), according to the report, however the research firm predicted it could be as large as $300 billion (£183.7 billion).

The report rates service providers using input from a broad range of stakeholders including 1,355 responses from buyers, service providers, and HfS analysts. The company’s definition includes seven different service offerings: order management, inventory management, manufacturing management, transport management, after market services, master data management, and sustainability services.

HfS described the market as “heterogeneous” because the 13 service providers it evaluated approached the industry in “very different ways”. “Sometimes that approach was dictated by the requirements of the original anchor clients and in other cases it was a function of consulting or technology skills in supply chain,” HfS said.

As well as the four top companies, HfS also analysed Celestica, WNS, OnProcess Technology, Infosys, Genpact, Tech Mahindra, WIPRO, EXL, and Tata Consultancy Services.

The survey added: “Some of the companies who are admired for their competitive and excellent supply chains are the early adopters of SCM BPO along with some of the companies facing tough external environment and are using SCM BPO as a transformation lever. It is the huge middle segment which has not embraced SCM BPO yet which is both challenge and opportunity.”

HfS said there are four common characteristics among the top four companies – “strong consulting and analytics capabilities, presence of visibility or control tower platforms, great account management as validated by customers and strong customer references or customer champions who have shared their inspiring and transformational journey along with the contribution of the service providers”.


IBM wins six-year outsourcing contract from Janalakshmi

July 15th, 2014

International Business Machines Corp.’s (IBM) India business has signed a $100-million outsourcing contract with microfinance company Janalakshmi Financial Services Pvt. Ltd, which is promoted by social entrepreneur Ramesh Ramanathan, to manage back-office projects. This deal comes months after Bharti Airtel Ltd renewed its landmark outsourcing contract with IBM.Outsourcing22

Financial details of the contract were not disclosed. However, two people familiar with the developments, who requested anonymity, pegged the deal value at about $100 million.

As part of the six-year deal, IBM will manage back-office operations such as application development and maintenance and infrastructure management services. It will build a technology platform for Janalakshmi and provide mobile, cloud computing and analytics services as well. IBM will also be responsible for digitizing and automating operations and processes at Janalakshmi.

Janalakshmi has previously also handed out contracts to IBM rival Accenture Plc. Last year, it gave a five-year contract to Accenture as part of a cost-cutting drive amid expanding operations.

In 2013, Janalakshmi had applied for a banking licence. The Reserve Bank of India eventually handed out licences to IDFC Ltd and microfinance institution Bandhan Financial Services Pvt. Ltd.

Earlier this year, Bharti Airtel Ltd renewed its outsourcing contract with New York-based IBM. The renewed five-year deal is pegged at around $750-800 million.


Accenture Positioned as a Leader in Serving Energy Companies for the Second Consecutive Time, According to IDC MarketScape Report

July 9th, 2014

Accenture  has been positioned as a leader in the recently published IDC MarketScape: Worldwide Oil and Gas Professional Services 2014 Vendor Assessment1 by IDC Energy Insights. The only company to receive this distinction for two consecutive reports, Accenture was recognized for providing services including business and IT consulting, systems integration, IT outsourcing, buOutsourcing11siness process outsourcing, and application development and management, as well as solutions unique to energy firms.

The report assessed many leading professional service firms’ strategies and capabilities in meeting specific needs of the oil and gas industry with offerings in industry segments, such as upstream, midstream, downstream and retail.

“The new IDC MarketScape report reflects our longstanding role as a trusted leader in helping oil and gas companies achieve their goals for safer, more productive and cost-effective operations,” said Andrew Smart, global managing director, Accenture Energy industry group. “Our offerings are based on a rigorous analysis of current and future oil and gas needs across all segments of the industry and are vital to our clients’ ability to drive better business outcomes.”

The latest IDC MarketScape report analyzes the offerings and capabilities of 12 oil and gas services providers, focusing on how they help clients improve performance, achieve IT-enabled business benefits and reduce costs. Accenture was cited as a leader in the report for its unique ability to bring together strategy, digital, IT and business process outsourcing, as well as its ability to develop innovative services and solutions for future growth, all on a global scale.

“Leading oil and gas companies will be looking to their service providers to help them innovate and improve their performance in the coming years,” said Jill Feblowitz, vice president, IDC Energy Insights, Oil and Gas. “The good news is that professional services firms have made great strides in building their oil and gas-specific capabilities the past two years.”


Companies like Citi, Accenture and HCL turning to mobile apps, social media to rope in best talent

July 1st, 2014

Polishing your CV for that dream job? Brushing up your social media profile and practising online interviewing may help more. As employers compete intensely for scarce talent, companies such as Citi India, Accenture and HCL TechnologiesBSE -0.38 % are turning to new apps, big data tools and social networking websites to acquire talent.Outsourcing23

Citi India recently adopted apps Blue Jeans and Video Recruit to enable business managers to interview candidates remotely from across locations. These apps eliminate the need for traditional video conferencing facilities, enabling candidates to connect to the interviewer via their mobiles or tablets.

“Apart from being cost-effective, such technology enables us to keep pace with the growing talent requirements by closing open positions in a timely manner,” said Sarab Preet Singh, head of recruitment, learning and development at Citi India.

Others such as Accenture are using a mobile app that has a digital interview tool with an automatic interviewer that picks random questions to interview a cross-section and collects data on the talent base. “By using this app the catchment area of our hiring reduces dramatically. It will also help us when we want to explore a new market for talent in a new city,” said Manoj Biswas, ymanaging director, human resources at Accenture.

Arecent global survey by professional services firm Deloitte on human capital trends shows that 60% of respondents have just updated or are currently updating or revamping their talent sourcing strategy while another 27% are considering changes. “Employees today have different expectations

creative companies are today discovering new ways to attract talent,” said Jeff Schwartz, global human capital leader, Deloitte USI. Recruiters realise they have to do things differently to attract and manage talent than what they were doing seven-eight years ago to expect better results.

The study shows that nearly 45% of candidates now apply for jobs on mobile devices. Most companies today use social networking websites to post job openings while the more innovative ones also leverage social media to build networks of people interested in the company that might turn into high-quality recruits.

The report also suggests that organisations can now leverage big data tools from vendors such as LinkedIn, Facebook, Entelo, Gild, TalentBin, Work4, Identified and others to identify and source quality candidates around the world.

Information technology company HCL Technologies has used in certain locations a videobased interview through a secure connection that can be conducted from a desktop and allows the interview to be recorded and assessed later. “We also make sure that we are available for conversation and engagement with the potential candidate on FB, Twitter and Glassdoor,” said Naveen Narayanan, global head, talent acquisition at HCL Technologies.

The company has also started using gaming tools to engage people who have accepted their job offer but are yet to join the organisation. It gives them a platform to engage with their peer group and others in a gaming format. “The socalled ready talent available has not really risen.

In such a scenario companies are using the social space more and more to network with groups of potential candidates on the basis of their skills and engaging more to be seen as an employer of choice. Also, employees today are expecting a lot more engagement on mobile,” said Narayanan.

DCB Bank is also changing its talent acquisition strategy to be able to do mass hiring efficiently. It is evaluating recruiting process outsourcing, use of social media, working with partners who provide the ‘hire and train’ model and new campus hiring initiatives.

The bank has adopted a unique strategy to combat the challenge of candidates opting out after accepting offers and before joining, said Hamsaz Vasunia, HR head at DCB Bank. “We are launching an induction app with superhero avtaars through which we will be able to attract the GenY and Millennial Gen. This tool will increase the engagement of the candidates with the bank and will definitely improve our selection-joining ratio,” said Vasunia.

Besides, companies such as Citi India and HCL have integrated marketing with recruiting. At CitiPhones, for instance, the company reaches out to candidates with the help of its marketing team through Facebook for walk-in interviews and also offers iPhones to its employees for maximum number of referrals.


Job losses tipped as NAB’s MLC investigates outsourcing

June 24th, 2014

National Australia Bank’s wealth ­management arm, MLC, has gone to market to scope out the possibility of ­outsourcing IT and back office services, a move that would see hundreds of internal positions shifted to external providers.Outsourcing14

The division, which has long been considered something of an underperformer since NAB acquired it from Lend Lease in 2000 for $4.6 billion, has been looking at options to restructure its operations since Andrew Hagger took over last year.

The Australian Financial Review understands NAB has sent an “expression of interest” document out to 10 ­potential suppliers, with the aim of assessing the viability of a shift to an ­outsourced model in coming months.

The EOI is believed to have been sent to incumbent tech suppliers Accenture, Genpact, IBM and Tech Mahindra, with a further six including Tata Consultancy Services, HCL Technologies and Wipro.

A spokesman for NAB said the bank had only run limited outsourcing ­programs over the past four years, but it was likely for a business of its size to be assessing the option. He said there had been no decision yet to change current arrangements. “We have continually assessed our business operations and will continue to work with third-party ­suppliers to see if we can identify whether there are opportunities to optimise and improve arrangements that can further benefit our customers,” he said.

It is understood the scope of the back office work would include work in ­technology, portfolio management, credit control and also on wrap platforms and self-managed super funds

One expert, who declined to be named, said this would mean the outsource ­provider being asked to provide between 600 and 700 workers, which would mean roughly 400 to 500 current MLC workers losing their jobs.

NAB declined to comment, citing the early stage of the proposal.

Mohit Sharma, director of ­outsourcing advisory firm Mindfields, said the proposed move made sense due to the potential efficiencies on offer.

“Wealth management operations would require niche providers and this long overdue exercise might have been undertaken to expand and refresh the current panel of vendors,” he said.


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