Transcript KPMG Peat Marwick The Shadow Partner

KPMG Peat Marwick
The Shadow Partner
http://www.kpmg.com
Suggested Study Questions
• 1. What are the challenges that KPMG Peat Marwick faces
over the next five to ten years? What are the organizational
implications of these challenges?
• 2. How important is implementation of the Shadow Partner
for KPMG?
• 3. Why is the Shadow Partner project facing so much
resistance?
• 4. As Bob Elliott, how would you describe the benefits of
the Shadow Partner to the partners?
• 5. As a member of the U.S. Operating Committee, how
would you evaluate the investment in the Shadow Partner?
What is the Shadow Partner?
• An on-line “reservoir of practice and
knowledge” (may be a vision or a system) would provide partners of the firm with
universal and immediate access to expertise
currently contained in internal client
reports, and external expertise contained in
third-party data bases.
The objectives of the KPMG case:
• Discusses a large professional (one of the Big
six in the accounting industry) service firm’s
vision for using information technology (IT) to
address the challenges it it facing.
• Confronted with over-capacity in its traditional
audit business and a need to grow clientfocused value-added advisory services, a
senior management team develops an
ambitious strategy for capitalizing on emerging
networked IT capabilities.
Strategic Challenges
• As clients began to view audit as an
undifferentiated commodity, loyalty declined
and price competition increased.
• Increased pressures on the Big six to:
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improve efficiency; - reduce litigation risks,
provide value-added services
reconcile conflicting cultures and business strategies
compete internationally
shift from current product-focused strategic and
organizational orientation to a client-focused one.
Vision
Mission,
Principles,
and Values
Goals / Objectives
Strategies
Plans
Tactics
Figure: Hierarchy of Leadership Tools
Frame for Analyzing Organizational
Impacts of the Shadow Partner
Defining
Direction
Environmental
Context and
Resources
Executing and Adapting
Units,
groupings
Incentives
Coordinating
mechanisms
Authority
Formal and
informal
power
Purpose Core
Values, &
Core
Strategy
Competencies
Information
Policy
Exhibit TN-3
Control
Management
processes
Process Performance
Time
Quality
Cost
Flexibility
Innovation Potential
Stakeholder Satisfaction
Boundary
systems
operation,
processes
Sustaining Value
People
Work
Values
and
Behavior
Technology
Employee/Partners
Customers
Shareholders
Society
Benchmarks
Best of class
Best of bread
Reputation
Other
Sustainability
Resiliency
Flexibility
Implementing the Shadow Partner
Effectiveness
Individual
Context
Environment
Organization
Work Group
Intervening
Factors

Information
Technology
Task
Alignment
Commitment
Mastery/
Competence



Data
Information
Rules
Making
Design Issues
How
knowledge is apportioned between machine
and individual
Level
of interactivity between machine and
individual
Degree
& timing of feedback provided to
individual
Individual
Work Group
Organization

Level of Functionality
Decision
Result
Roles of the Shadow Partner
• The vision of the Shadow Partner (SP) was to
efficiently leverage the knowledge and expertise in
the firm.
• The SP would make available to all partners external
databases and an ability to communicate with each
other any place at any time using e-mail and voice
mail.
• SP would enable rapid development of value-added
services that addressed client needs while also
enabling management of the complexity that would
come with customization.
Roles of the Shadow Partner (cont.)
• Enable client-centered rather than productcentered information management and access.
• Increase options for firmwide and external
communication and coordination.
• Codify expertise of the firm through interactive
training packages (e.g., interpretation of tax laws)
• Increase productivity through integrated
management support tools (e.g., calendar and time
management, project management tools etc.)
Sources of Resistance
• Should KMPG proceed with the
implementation of the system?
• Resistance
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costly?
risky? (experience with the technology)
benefits?
confidentiality and privacy (mutual trust)
sponsorship (from top management)
radical change (organizational culture ready?)
project size and structure
Recommendations
• The alignment of people, technology, and work
(IS?) must be assured within the context of the
organization and the environment.
• Changes may be needed in any one of the these
areas to enable successful implementation.
• Examine ways to redesign the IT to decrease
the technology risk.
• Implement the system as “revolution” or
“evolution.”
Success or Failure Factors of IS
Succeed
Business
or
Survive
Technology
Service
speed
Improve
quality
innovation
Continuous
Change Management
Radical
Organization
Ethically Acceptable
Socially Responsible
Politically control
(Behavior)
Structure
attribute
decision-making
operation
Management
culture
(Human)
(Strategic Advantage)
uncertainty
Risks
Benefit
overcome
enhance
strategy
I S
A Digital Society
Ability & flexibility to compress
time and space and to expand
organizational knowledge and
then increase flexibility
1) choosing strategy
2) organizing the business
3) organizing the systems
management area
HUMAN ADAPTABILITY
culture
The Driver & Servant
[ organizational change]
------Radical Change
Objectives of MIS (Cont’d)
[ organizational change]
A FIRM/ORGANIZATION:
Efficiency
------Radical Change
Evolution of change
Effectiveness
(Automate)
Innovation
(Informate)
(Innovate)
[Doing the things right]
[Doing the right things]
- creativity
-Proper utilization of
resource
{Save Money}
-Attainment of goals
- property of culture
Restructuring
Competitive Advantage
{Make Money}
Re-engineering
Cooperative Advantage
Electronic Market: flatten the organizational hierarchical structure
“ Revolutionary significance lies in generality” e.g., steam engineers--triggered the first Industrial
Revolution Computers--Seem to be triggering a second one.
IT Yesterday, Today and
Tomorrow
Yesterday
Today
Tomorrow
Computer age
Computer proc.
Computing
Accuracy
Automation
Efficiency
Information age
People proc.
Communication
Perspective
Information
Effectiveness
“doing things
right”
“doing the right
things”
Knowledge age
Knowledge proc.
Connectivity
Reality
Innovation
Performance/
Innovation
“creativity”
Vision
Mission
Policies
Goals
Metrics
Values
Time
Horizon
Objectives
Metrics
Values
Time
Horizon
Strategies
Tactics
Figure
Stages of Information-Systems Strategic Planning
Three Types of Planning
• Strategic Planning
– It deals with the development of an organization's
mission, goals, strategies, and policies.
• Tactical Planning
– It involves the design of tactics, the setting of
objectives, and the development of procedures, rules,
schedules, and budgets.
• Operational Planning
– It is a planning done on a short-term basis to implement
and control day-to-day operations.
Changes in
the Management
Leadership
Management
Leadership
1. Establishing direction
2. Aligning people
3. Motivating
4. Inspiring
5. Empowering
Planning
2. Budgeting
3. Organizing
4. Staffing
5. Controlling
6. Problem-solving
“Soft” Interpersonal Skills
1. Effective communication
2. Deep listening
3. Facilitating
4. Negotiating
5. Working with conflict
6. Relationship building
7. Understanding how to work
effectively in teams
8. Knowing when to say “no”
1.
Technical skills
Behavior traits, flexibility
Concern for excellence,
Learning and self-confidence
Planning Terminology
• Vision
– A vision is what an organization wants it to be, and it is
a message that every employee should not only hear,
but should also believe in. The company’s vision is
about its values, beliefs, quality, and the future.
• Mission
– A statement of the basic purpose or purposes for which
the organization exists. It tell an organization what it is,
why it exists, and the unique contribution it can take
(what it does not do, as well as what it does). For
example, the utility company could be: "To supply
energy to consumers."
• Goals vs. Objectives
– Broad statements of the ends the organization intends to
accomplish in order to fulfill its mission. Objectives are
more specific, measurable elements of a goal. For
example, the utility company might have increased
profitability and energy utilization as goals, measured
by objectives such as specific increases in earnings per
share and kilowatt hours used.
• Strategies vs. Tactics
– Strategies are general approaches that show how goals
should be achieved, and tactics are more specific guides
to actions that would implement strategies. For
example, a company strategy of "becoming the lowcost producer in its industry" would probably require a
tactic such as increasing investments in automation.
• Policies
– General guidelines that direct and constrain decision
making within an organization. For example, many
organizations have a policy of "promoting from within"
that guides managers in filling job openings that occur.
Policies are implemented by rules and procedures
which are more specific statements that direct decision
making. For example, procedures to follow in hiring
employees, and rules protecting employee job rights,
would help implement a policy of promoting from
within an organization.
Suggested Study Questions
• 1. What are the challenges that KPMG Peat Marwick faces over the
next five to ten years? What are the organizational implications of
these challenges?
• 2. How important is implementation of the Shadow Partner for
KPMG?
• 3. Why is the Shadow Partner project facing so much resistance?
• 4. As Bob Elliott, how would you describe the benefits of the Shadow
Partner to the partners?
• 5. As a member of the U.S. Operating Committee, how would you
evaluate the investment in the Shadow Partner?
• 6. What advice would you give Tony Sapienza? What advice would
you give Jon Madonna and Jim Brocksmith?