Credit turmoil yet to take toll on Accenture

Date: 25-04-2008
Source: The Economic Times

Accenture, the world's largest consulting and outsourcing firm, hasn't seen any cancellation or deferral of contracts from its customers despite economic troubles in the US and elsewhere, the company's chief executive officer William D Green said on Tuesday. Accenture believes that global competition will make technology spending imperative even in the face of a slowdown, he said.

"We need to be thoughtful and cautious. But there is no need to panic," Mr Green said, asserting that Accenture's portfolio of service segments and presence across the world would protect it from shocks in any single market. Even as there are pockets of slowdown in the global economy, there are pockets of acceleration where businesses are expanding and spending on technology, he said.

The US is believed to be slipping into recession, triggered by credit losses in the second-chance lending industry. As many as 50 of the world's biggest banks and securities houses have written down about $250 billion. This led to worries that outsourcing demand could shrink, cutting into revenues and profits of companies like Accenture.

But the company itself has consistently maintained that the business environment remains active. The company believes that markets such as Brazil, India and China are growing fast and could partly compensate for the slowdown in advanced markets. Mr Green said Accenture has considerably refined its solutions to help companies navigate through the down phase of the business cycle and that should keep contracts coming in.

Short-term dips not withstanding, Accenture believes the medium term outlook for computer services remains robust. Hence, the company is hiring about 60,000 people in the current fiscal year to August. It will also hire nearly 15,000 people in India over the next 12 months.