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| | partnerships to reveal
their latest steps
towards a global
integration which they
may have – inadvertently
of course – led the
market to believe had
happened already. When
the accounting firms
began the messy and
sometimes fragmented
process of divesting
themselves of their
consulting arms, the
true nature of these
networks was often
revealed.
Like self-assembly
wardrobes, they all
looked pretty solid as
long as they were left
where they were, but
moving them from place
to place was a different
story.
Now, of course, the
real Big Four have been
given a fresh start and
can build up their
businesses from scratch.
Restrictions on
cross-border
partnerships have also
eased, and we are
beginning to see the
emergence of entities
which are global – or at
least pan-European – at
a far deeper level.
KPMG – although it
prefers the term
"advisory" to
"consultancy" these days
– has been rapidly
rebuilding its capacity,
and this story has
recently taken a new
step with the merging of
its German, Swiss and UK
units.
"We've effectively
formed ourselves into a
'superpartnership',"
explains Bernard Brown,
who now heads Operations | |
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| | Transformation in the
new structure. Together
with Financial
Management and People &
Change, this forms one
of three service lines
in Business Performance
Services, which then
intersect in a matrix
(alongside IT advisory)
with KPMG's three lines
of business: corporates,
financial services and
infrastructure,
government and health.
"As well as sharing
solutions we now have
all of that scale to
bring to clients," says
Brown. "We're also able
to create cross-border
working."
Areas which the UK
firm can now draw on
include centres of
excellence in
manufacturing,
operations and finance
in Germany, as well as
exploiting the potential
for IP-related work in
the Swiss market.
This doesn't mean
that KPMG has narrowed
its focus: the new unit
continues to work
closely with other
members of the "European
family" – KPMG has a
large advisory practice
in the Netherlands and
also operates in France
– and to operate on
global projects.
"About 60-70% of my
projects are global,"
says Shamus Rae, a
partner in the sourcing
advisory service line.
"From an organisational
point of view we work
with global teams and
use global methods. KPMG
is a great step forward
but it's only part of a | |
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| | bigger client-facing
story."
Amid the doom and
gloom KPMG remains
bullish about the
future.
"We've had a very
good first quarter in
spite of difficult
business conditions,"
says Brown. "I'm looking
to double the team in
Europe over the next 24
months – there doesn't
seem to be a limit to
our growth even in
difficult times."
One benefit from the
European integration is
that the firm is more
balanced between the
highly cyclical UK
market and the German
economy, which is
stabilised somewhat by
the preponderance of
mid-sized, family-owned
businesses.
Brown also believes
that KPMG's structure
and its ability to draw
on the resources of the
wider firm give it a
good story to tell in
current conditions,
trading the
"soup-to-nuts"
capability of a
traditional consulting
organisation for the
breadth of an advisory
firm.
"For example, in
performance or cost
optimisation work we can
look not just at
restructuring but
security and tax," he
says. "Or we can put
supply chain specialists
together with tax and
procurement and forensic
accounting people to
look for patterns than
in some cases might | |
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| | include fraud."
This multi-faceted
approach is also coming
into play as outsourcing
moves deeper into
organisations.
"When you do the back
office outsourcing its
more discrete, it
doesn't have such an
impact on the rest of
the business," says
Brown. "When you start
to look at the 'middle
office', it's like a
Rubik's cube – you
change one side, you
change all the other
components. It's also
about scale – the middle
office is a big job."
Brown is even
optimistic in areas
where people seem to be
pulling their horns in.
Private equity houses
are increasingly looking
for transformation and
portfolio advice as the
options for financial
engineering and trading
tail off. Even in the
public sector the tail
of recent
transformations is
creating a renewed
interest in optimising
the massive investments
in IT and infrastructure
that have been made.
There is also a great
desire in the public
sector to apply
expertise in areas such
as Lean to a service
environment.
"There's no lack of
appetite to invest where
we get a good return,"
says Brown. "And the
bets we've placed so far
seem to be paying off."
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| | The mergers that created
the big accountancy
firms – and the growth
which propelled them to
positions of dominance
in consultancy – created
the series of strong
global brands which are
with us today. Even now
we talk about "Big Four"
consultants as almost a
generic term, even
though no-one
necessarily agrees who
the biggest firms are
and how many of them
there are.
One of the advantages
of the partnership model
is the way it allows the
rapid creation of such
vast global networks.
One of the disadvantages
is the long tail of
integration that
follows. There were good
and bad reasons for
this: regulations
limited the creation of
genuine cross-border
partnerships, but often
member firms, even at a
sub-national level, were
less than willing to
throw everything they
owned into the common
pot. Sometimes the
problem was simply the
slow pace of
consensus-building that
accompanies change in a
partnership.
This was hidden very
effectively behind some
powerful global
branding, which
sometimes made it
uncomfortable for | |
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