Barclays Won't Renew Multimillion-Dollar Accenture Contract
The arrangement covered application development and management of Barclays UK commercial and retail banking systems. Six years ago, Accenture was hired to improve Barclays' resource flexibility and lower the costs associated with developing and maintaining its software applications. However, the bank recently underwent a standard process review and has determined not to renew the contract.
The decision is not out of step with the economic times; Accenture has seen outsourcing demand decrease in the first quarter of its fiscal 2010. The solution provider's recent first-quarter results showed outsourcing bookings were lower than expected in the quarter, with clients remaining cautious about signing large multiyear contracts. Although the number of signings increased, those deals continued to decrease in size and be tighter in scope.
However, Accenture expects net revenue for the second quarter of 2010 to be in the range of $5.1 billion to $5.3 billion. The consultant saw growth in management consulting, with bookings focused on risk management, strategic sourcing and global expansion activities, as well as increasing operating efficiencies. Further, bookings grew in technology consulting as customers continue to look at consolidating data centers and virtualizing infrastructures as ways to streamline costs.