kpmg peat marwick the shadow partner
TRANSCRIPT
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 client-focused 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:– 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.
Figure: Hierarchy of Leadership Tools
Vision
Mission,Principles,and Values
Goals / Objectives
Strategies
Plans
Tactics
Hierarchy of Leadership Tools
Frame for Analyzing Organizational Impacts of the Shadow Partner
Frame for Analyzing Organizational Impacts of the Shadow Partner
DefiningDirection
Environmental Context and
Resources
Information Policy
Purpose Core Values, & Core Competencies
Strategy
Exhibit TN-3
Executing and Adapting
Units, groupings
Formal and informal power
Incentives Coordinating mechanismsAuthority
Boundary systems
operation, processes
Management processes
Control
People
Technology
Work
Values and
Behavior
Sustaining Value
Process PerformanceTimeQualityCostFlexibilityInnovation PotentialStakeholder SatisfactionEmployee/PartnersCustomersShareholdersSocietyBenchmarksBest of classBest of breadReputationOtherSustainabilityResiliencyFlexibility
Implementing the Shadow PartnerImplementing the Shadow PartnerIndividual
TechnologyTask
Information
ContextContext
EnvironmentOrganizationWork Group
EnvironmentOrganizationWork Group
Effectiveness
ResultIntervening
Factors
AlignmentCommitmentMastery/Competence
IndividualWork GroupOrganization
Level of FunctionalityDataInformationRulesDecision Making
Design IssuesHow knowledge is apportioned between machine and individualLevel of interactivity between machine and individualDegree & timing of feedback provided to individual
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 product-centered 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 – 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
Business
Succeed
Surviveor
Service speed quality innovation
Improve
Continuous
RadicalChange Management
Technology Organization Management
Ethically AcceptableSocially ResponsiblePolitically control
(Behavior) (Human)Structureattributedecision-makingoperation
culture(Strategic Advantage)
Risks Benefit
uncertainty
strategyovercome enhance
I SA Digital Society
1) choosing strategy
2) organizing the business
3) organizing the systems management area
Ability & flexibility to compress time and space and to expand organizational knowledge and then increase flexibility
culture
HUMAN ADAPTABILITY The Driver & Servant
[ organizational change] ------Radical Change
Objectives of MIS (Cont’d)
[ organizational change] ------Radical Change
A FIRM/ORGANIZATION: Evolution of change
Efficiency(Automate)
Effectiveness
(Informate)
Innovation
(Innovate)
[Doing the things right]
-Proper utilization of resource
{Save Money}
[Doing the right things]
-Attainment of goals
{Make Money}
Restructuring
Competitive Advantage
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.
- property of culture
- creativity
IT Yesterday, Today and Tomorrow
YesterdayComputer age
Computer proc.
Computing
Accuracy
Automation
Efficiency
“doing things
right”
TodayInformation age
People proc.
Communication
Perspective
Information
Effectiveness
“doing the right
things”
TomorrowKnowledge age
Knowledge proc.
Connectivity
Reality
Innovation
Performance/
Innovation
“creativity”
Vision
Mission
Policies
Goals
Metrics Values TimeHorizon
Objectives
Metrics Values TimeHorizon
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 inthe Management
Leadership
Technical skillsBehavior traits, flexibilityConcern for excellence,Learning and self-confidence
Management1. Planning2. Budgeting3. Organizing4. Staffing5. Controlling6. Problem-solving
Leadership1. Establishing direction2. Aligning people3. Motivating4. Inspiring5. Empowering
“Soft” Interpersonal Skills1. Effective communication2. Deep listening3. Facilitating4. Negotiating5. Working with conflict6. Relationship building7. Understanding how to work
effectively in teams8. Knowing when to say “no”
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 low-cost 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?