Mark Goodburn can remember the days when clients couldn't wait for KPMG to finish a consulting engagement and move on. Today, it's a much different story. "They don't want us to leave," says Mark Goodburn, vice chairman and head of the advisory practice at KPMG. "Today, they have their next 'to-do' waiting for us when we finish a project." This client change of heart, Goodburn says, is a direct result of a strategic shift KPMG made following the spinoff of its systems implementation business in 2001, a move that allowed KPMG to "rethink" its advisory practice. "We made a strategic shift and conscious decision to move from a more project-based relationship with clients to a more annuity-based relationship," Goodburn says. "Before, we were focused on implementing a technology solution and then we'd leave. But now, we can address much more complex problems and we're connected into many more parts of the business."
This dramatic strategic shift is the central piece to Goodburn's vision of KPMG's advisory practice, which he took over in 2004. In the wake of corporate scandals and increasing market and regulatory complexity, Goodburn set out a strategy designed to carve out a new space in advisory services that integrated strategy, financial consulting and risk management on a global scale.
"We had a couple of big corporate failures and people started realizing that they had to look through a risk lens, and we also had true globalization happening," he says. "It allowed us to look at a problem that a client was facing and ask, 'How do we address this through all dimensions—not just people, process, technology—but also through risk and globalization?' " The new approach, he says, is somewhere in between pure strategy and pure systems implementation, but more business advisory. "We kind of created this new space, and I feel very strongly that we're number one in it."
The growth of the advisory practice under Goodburn's leadership has been impressive, with an compounded annual growth rate of 18 percent. Globally, KPMG's advisory practice has revenue of $6.4 billion. "I'm not sure that I could predict that we'll be able to keep up the 18 percent rate—it's tripled the size of our business the last six years," he says.
But something that could help sustain it is the work KPMG will be doing around the International Financial Reporting Standards (IFRS)— the accounting standards that are now being used in many parts of the world.
"A year ago, we didn't have any U.S. companies spending time on IFRS," Goodburn says. "Today, as the world globalizes, all of our U.S. companies are worrying about it." Currently, the U.S. isn't mandating a switch, but "it's not a question of if, but when," he says. Goodburn's best guess is 2011 or 2012. "This is very significant, and we're going to be working on this forever," he says. "But this is one of the huge benefits of being a global firm. When I go out to a client, not only do I have the theory, methodology and the training in place, I've got people who have already been through it. That's a big differentiator for us."
In April, KPMG launched an IFRS Institute to raise awareness and address the needs of those likely to be affected by a transition by U.S. companies to IFRS.
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