TechnologyAccounting SoftwareIntellectual capital to bind KPMG

Intellectual capital to bind KPMG

KPMG’s consultancy arm will be irrevocably bound into the rest of the partnership after the firm sets up a central body to house the firm’s global intellectual capital. The knowledge centre is known by the working title of KPMG Intellectual Capital and will own all KPMG names, trademarks, processes, databases and methodologies. KPMG is currently in talks with bankers about raising a $200m bond to finance IT restructuring plans.

“We will be doing two things: redesigning the structure of KPMG and creating a body of common economic interest, which will be executed from the centre,” said Colin Sharman, international chairman at KPMG.

Under the restructuring plans, six CEOs will be appointed, each responsible for an international practice. “We will be raising some capital to try to accelerate the restructuring and a lot of that money will be used to finance new information systems. We will have an intellectual capital body that will have a golden share in all our methodologies,” said Sharman.

The new proposals will have the effect of preventing an Andersen Consulting vs Arthur Andersen style split. “Management consultancy has been set to remain on an integrated basis,” Sharman said. The proposals for the centre are being put forward to KPMG’s executive committee this month.

Sharman admitted that the abandoned merger with Ernst & Young would have helped the firm’s technology systems, but he denied that KPMG was now copying Ernst & Young’s global consultancy structure.

“You could surmise that we are taking the route that we were talking about with Ernst & Young. The merger talks have been a very good consultancy exercise: we learnt some of the things we don’t do so well and how we should refine things,” he said.

“We are absolutely confident that we can overtake Deloitte & Touche to number three position.” Sharman also believes that, if Arthur Andersen and Andersen Consulting split, KPMG will be in a position to beat the accountancy firm in the US and expand its consultancy arm.

“If Arthur Andersen separates from Andersen Consulting, it is not clear that the former will be bigger than us in the US. Second position will be up for grabs,” he said Sharman.

KPMG said that, after first quarter growth in UK management consultancy revenues of 45 per cent to #37.3m, it expects 50 per cent growth over the next year. In the UK, fees grew by 36 per cent to #153.2m at the end of 1997.

Related Articles

Accountancy in the digital age: Flexibility, agility, efficiency

Accounting Software Accountancy in the digital age: Flexibility, agility, efficiency

3w Pegasus Software | Sponsored
Sage purchases Intacct in its largest ever acquisition

Accounting Software Sage purchases Intacct in its largest ever acquisition

5m Alia Shoaib, Reporter
5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
UK behind foreign markets in digital accounting, but gap is narrowing

Accounting Software UK behind foreign markets in digital accounting, but gap is narrowing

7m Alia Shoaib, Reporter
The rise of the progressive accountant

Accounting Software The rise of the progressive accountant

8m Emma Smith, Managing Editor
Making Tax Digital: Revolution or revolt?

Accounting Software Making Tax Digital: Revolution or revolt?

8m Emma Smith, Managing Editor
Making Tax Digital: Is HMRC’s recent system fault a cause for concern?

Accounting Software Making Tax Digital: Is HMRC’s recent system fault a cause for concern?

8m Emma Smith, Managing Editor
Four reasons why SME owners should switch to cloud accounting

Accounting Software Four reasons why SME owners should switch to cloud accounting

9m Emma Smith, Managing Editor