Slow Recovery for Hourly Rates of Accenture Consultants

Aug.27.10 | About: Accenture plc (ACN)

Accenture (NYSE:ACN) bills its clients for the hourly time of Accenture consultants, but billing rates have dipped in recent years. Accenture’s income and profits are significantly impacted by the rates that it can charge for its consultants, and a recovery of these rates can have a meaningful impact on the $52 Trefis price estimate for Accenture’s stock (40% above the current market price of $37).

Accenture competes with HP (NYSE:HPQ), IBM (NYSE:IBM), Infosys (NYSE:INFY), Wipro (NYSE:WIT), and Cognizant (NASDAQ:CTSH) in key areas like software application outsourcing and business process outsourcing. A broad economic recovery as well as increases in the bill rates charged by competitors can have an important impact on how Accenture’s rates will trend.

Bill Rate per Hour for Accenture Software Application Outsourcing Professionals

Application Outsourcing helps corporate clients reduce IT costs by outsourcing steps of developing and maintaining software applications used in their business. Application Outsourcing essentially entails outsourcing processes such as:

1. Software application development
2. Software application testing
3. Software upgrades, enhancements and maintenance.

In the past, Bill Rate per Hour for Accenture Software Application Outsourcing Professionals decreased from $58 in 2004 to around $47 in 2009.

The average of Trefis member forecasts for Bill Rate per Hour for Accenture Software Application Outsourcing Professionals indicate an increase from $45 in 2010 to around $50 by 2016, in-line with the baseline Trefis estimates.

Disclosure: No position