Global review 2013
Thinking and acting globally
At EY, globalization has long been a driving factor in how we manage our business. And we are constantly working to make sure that we get the balance right between strengthening our global organization and empowering local decision making.
Thinking and acting globally
Globalization is compressing time and distance as people, products and ideas move faster than ever before. Demographic shifts are changing the sources of talent. Technological advances are changing how and when work is done. Trade, technology and investment flows are increasingly connecting emerging with developed markets.
In response to these trends, leading companies are globalizing. They see the growth potential in the emerging markets. They realize the cost advantage of scale and the recruiting advantage of global mobility. They know the benefits of having a global view in the way they manage their business, but they also understand that they can’t lose sight of local market dynamics.
Over the past decade we have transformed the structure of our organization to keep in step with the changing needs of our clients and people.
At EY, globalization has long been a driving factor in how we manage our business. And we are constantly working to make sure that we get the balance right between strengthening our global organization and respecting and empowering local decision making. Creating the right balance is about getting our structure and mindset right. It is about creating operational efficiency to generate earnings and investment capacity, recognizing that the delivery of our services is affected by local market regulations and dynamics. So we have to take the great knowledge and benefits of a global organization to the local markets through sharing knowledge, providing resources and investing in technology that enables our teams to better serve our clients in their local communities.
Our global structure
Over the past decade we have transformed the structure of our organization to keep in step with the changing needs of our clients and our people. This transformation has seen us evolve from a loose collection of national practices into a global organization, unified in our approach.
We have simplified our structure; it is composed of the Executive and Regions. The Executive includes our global leadership, governance bodies and our four geographic Areas. Working together they oversee our global strategy, brand, business planning, investments and priorities. While much of our business can be run on a global level, when we talk about serving clients and nurturing talent, we do that locally through our 29 Regions. These are similarly sized business units in terms of revenue and people and are grouped under four geographic Areas: Americas; Europe, Middle East, India and Africa (EMEIA); Asia-Pacific; and Japan. This streamlined structure allows us to leverage our global scale, but it also empowers our partners to be responsive to their clients’ needs, to drive innovation and to manage their people at the local level.
To drive consistency in how we serve our clients we use the same measures to manage all accounts, large or small. Using one set of globally aligned metrics means that all our people are working together toward the same goals, allowing us to work seamlessly across borders and service lines. Additionally, we have simplified our reward and recognition programs so that all of our partners are reviewed against the same metrics. This level of alignment allows us to think and act as one team, while still taking into account local market dynamics.
Our global workforce
Our vision is to create a truly global workforce that has deep local market knowledge. We will draw upon our diverse workforce to assemble the most talented teams from anywhere in the world and develop future leaders who have a global mindset accompanied by deep client, industry and geographic experiences.
The workforce today reflects the interconnected world we live in. To be successful we need to foster a global mindset in all of our 175,000 people. This involves global business knowledge as well as an ability to adapt and team collaboratively with those from different cultures in a way that leverages all of our different perspectives. As our clients continue to globalize, we expect cross–border service delivery to grow and form an increasing source of international experiences for our people.
Our Global Exchange program provides high performing seniors and managers the opportunity to go on 18- to 24-month international assignments before returning to share their learning with colleagues in their home country. Our New Horizons program operates in our EMEIA, Asia-Pacific and Americas Areas and gives high-performing seniors the chance to undertake a three-month work placement in another country.
Additionally, many of our people undertake international assignments or transfers outside of our programs in order to fill a business need. Across EY during the 2012 financial year, 1,915 people undertook international assignments.
Our structure gives us an advantage from which we can drive efficiencies of scale in how we manage our business. Globalizing the way we run our business has reduced costs, increased efficiency and improved service quality throughout the global organization. This underpins our global structure, while also reducing the administrative burden on our client-serving professionals, so that they can stay focused on serving their clients and delivering exceptional client service. These services are delivered by our worldwide Global Shared Services (GSS) network. With locations in India, China, Poland and Argentina, our GSS network provides services to all EY Areas, in 18 different languages.
Additionally, our Talent Hubs are a key solution to address many of our challenges in the market from winning new engagements to managing resource availability. Our Talent Hubs enable client service teams from across geographies to extend their talent pool to diverse locations, largely emerging markets. These markets provide qualified talent that is integral to delivering exceptional client service. The cost effective Talent Hub resources will also help enhance our competitiveness and improve engagement margins.
IT was our first function to fully globalize in 2010. We are investing in the range of US$1.2b in new technology. At the heart of our investment is a focus on delivering technologies with the potential to transform the way we do business. But it is not just the needs of our clients that we have in mind. A central role of IT services is to enable our people to work simpler, smarter and faster. Our IT services group will evaluate new and different ways to let our people work their way without compromising security or intellectual property.
To leverage our global purchasing power, we have globalized our procurement function. By consolidating EY’s spending power through economies of scale we are able to generate significant savings. These savings have allowed us to make significant investments in our business that will contribute to our long-term sustainability. More than just cost efficiency, though, our procurement function has sourced real estate solutions that improve EY’s working environment, travel solutions that support the mobility of our people, and technology and external content solutions that maximize the value of our purchases.
Some activities, such as nurturing talent, are best executed at the local level. This past year we formed one global HR transactions team to administer HR processes, transactions and related technology across our global organization. This frees up local resources to focus on nurturing talent to improve employee engagement levels and work more closely with business leaders.
Our structure also allows us to have one global Risk Management team that is responsible for making sure we focus on the right things as we manage our business. Areas of focus include enterprise risk, ethics and compliance, legal matters, policy issues, conflicts and independence.
The Risk Management team oversees tools and processes designed to help our people meet all of our global and local compliance responsibilities and help support our client-facing teams in delivering quality and exceptional client service. And they own our Global Code of Conduct, which provides the ethical framework on which we base our decisions every day. All of our people are required to sign the Code, which is anchored in our values and underpins all that we do. Additionally, the Risk Management team manages global tools and processes that support our people in evaluating, accepting and serving the right clients with the right services. These tools include our Global Tool for Client Acceptance and Continuance and our Service Offering Reference Tool, which allows our people to quickly assess which services can be delivered to our audit and non-audit clients.
The world economy is becoming more interdependent. Trade and financial system linkages are growing. Success in the long-term will depend on having a strong global network, including in the emerging markets. We have made big bets in the emerging markets over the past decade. We have invested in China, India, Brazil, the CIS, the Middle East and Africa. As the emerging markets grow to make up a larger percentage of our revenues, we feel it is important to give them a greater voice in our leadership team.
This year we created an Emerging Markets Committee and the chair of the committee is a member of the Global Executive, our highest management body that is focused on strategy, execution and operations. Its membership brings together all the elements of our global organization, including the leaders of our geographic Areas and service lines. The committee was established to connect the emerging markets with developed markets, so that an emerging markets view is considered in all key decisions. The committee recommends investment plans for the emerging markets, reviews thought leadership, branding and EY positioning for the emerging markets and prioritizes inbound and outbound mobility needs.