Global review 2016

Disrupt – or be disrupted?

“EY is investing in many of the areas that are going to help our clients going forward. One of them is around acquisitions; another one that’s closely related are strategic alliances. The third area is around digital. Now, we have a different strategy around digital than some of our competitors. For us, we believe in putting digital in everything we do. And then the fourth area is all around innovation – we’re looking really to disrupt ourselves. We’re looking to disrupt our tax practice, we’re looking to disrupt our audit practice, we’re looking to change our people model.”Carmine Di Sibio, Global Managing Partner – Client Service

What are some of the challenges that EY clients face today?

Our clients are facing uncertainty. There’s a lot of uncertain situations going on around the world. There’s political situations around the world, and really, conducting business globally in an uncertain environment is a huge challenge today.

Then there are other challenges like innovation and disruption. In many industries right now we have clients that are being disrupted by technology, by different ways of doing business.

How does EY support its clients?

At EY we are proud to help our clients navigate a lot of difficult issues. And what we bring to our clients; we really bring a relationship there. We have account teams that really understand what our clients are looking for. They understand our clients, they understand the industry they live in, and then we do bring technical expertise in whatever subject matter they need help in. But we also bring expertise at the strategy level.

It’s also, today, much more around: how do they do things digitally. And how do they improve their front office digitally, how do they improve their back office digitally and also, how do they look at disruption, how do they look at innovation?

Where is EY investing to help clients navigate disruption?

EY is investing in many of the areas that are going to help our clients going forward.

One of them is around is acquisitions. We, starting about three or four years ago, felt that we needed to add different skill sets to us, including acquiring companies that would give us those skill sets. So we’ve done 60 acquisitions in the last two and a half years and those acquisitions more and more are focused on things like cyber, digital, analytics and so forth.

Another one that’s closely related are strategic alliances. In today’s world, you can’t build everything yourself. And you have to align with different partners to deliver different services. The third area is around digital. Now we have a different strategy around digital than some of our competitors. For us, we believe in putting digital in everything we do. And making sure that no matter what practice we’re in, whether it’s the audit practice, the tax practice, the consulting practice, the TAS practice, we want to make sure that they’re incorporating digital in how they’re delivering their work, in how the client’s looking at us, and also in our solutions.

And then the fourth area is all around innovation. And we look at innovation really in three different areas. We look at it in terms of disruptive innovation, adjacent innovation and then just innovation at the ground level – sustaining innovation. All our people on all our accounts do a lot around sustaining innovation. They deliver services differently, they create innovative solutions on each account, in each service. And that’s our bottom line, and we want to encourage that. Then we have adjacent innovation.

And this is where we innovate some of our services on a more macro-basis. And that could be using technology to create a service or to change a service so it’s delivered in a different way. The top part is disruptive innovation. And in disruptive innovation we’re looking really to disrupt ourselves. We’re looking to disrupt our tax practice, we’re looking to disrupt our audit practice, we’re looking to change our people model, and this is something where we brought in an Innovation Leader from the outside, Jeff Wong, who’s very focused on disruptive innovation. He’s also very focused on creating an innovation culture around the other areas of innovation as well.

You’ve been at EY for 31 years. Is this an exciting time for the organization?

This is a really exciting time to be in a professional services organization, and in particular to be at EY because of the change that’s happening, the disruption that’s happening, you get to see a lot here at EY and you get to see it across industries, you get to see it across geographies. It’s really a view that not many people have and not many organizations have. And we have that at EY.

Is there an upside to disruption?

“In the current environment, companies really have no other choice but to embrace disruption and embrace change.” Watch Uschi Schreiber, Global Vice Chair – Markets, talk about the upside of disruption.


How can companies embrace disruption rather than be overwhelmed by it?

In the current environment, companies really have no other choice but to embrace disruption and embrace change. We’re living in a time where change is so rapid, really driven by technology and there’s really no choice. You have to engage with it. Many of our clients, of course, are already doing that.

But we are seeing increasingly, conversations in particular at the CEO level or the C-suite level, very much to the question: how do we respond to this? In particular, how do we respond to these changes but at the same time, managing our day to day business, meeting our stakeholder and shareholder expectations and of course looking after our people. So these are interesting, challenging times, and I think in particular at C-suite level, we’re seeing people needing to balance those two issues.

What are the upsides of disruption?

There are significant upsides to disruption. It’s always easy to look at the scary bit about this. It’s much, much better of course, in a business context, to look at what opportunities it presents. Every time there is change, it presents opportunities – there is an upside. And the approach that we are taking, in thinking about disruption, is very much to look for that. Where is the opportunity here to improve a business, to restructure a business, to create new services, to connect differently with customers and clients. That is the question to ask at this point in time.

Many of our clients who are doing that will of course roll through this period of disruption and fundamental change with flying colors.

What do business and government leaders need to do to stay ahead?

This is a very interesting time for business and government leaders because they’re really required, in our perspective, to work very, very closely together. Much more so than they did in the past.

Every business is impacted by technology change and needs to think about what that might mean for its future delivery of whatever its services are. What we are seeing is, for example, that a whole range of positions or jobs will be replaced through machines. And clearly that will have a significant impact, not just for individual businesses, but for society as a whole. So we see the role of government to be even more important than it has been historically because it’s really government’s role to look after the whole.

And so therefore government and business working very closely together – that’s really what is required now. Of course that happens at a time where the trust in government in many, many countries around the world is very low. So, in business we have certainly a role to play at EY to bring those parties together, to bring together business with government as well as entrepreneurs and NGOs to get the whole system to talk about this and to make sure that decisions are made that are not just good for individual businesses, but that are actually good for society as a whole.

Bringing innovation to the top of the client agenda

This was one of many themes explored at this year’s Innovation realized client retreat in San Francisco. The event was deliberately designed to mirror market unpredictability and inspire fresh thinking, and is just one of the many EY initiatives to elevate innovation to the top of all our client discussions.


Our acquisitions and strategic alliances

No single organization can maintain a lead across all of the new digital platforms that are coming up. It’s therefore now more important than ever to bring in specialist skills and resources, and build an ecosystem of like-minded companies so that we can react quickly to the changes that are taking place. Over the last year we made 26 acquisitions to strengthen our client capabilities and seven new strategic alliances.

Taking the robot out of the human

Robotics Process Automation (RPA) tools automate an organization’s high-volume, highly repetitive, multistep tasks. But that’s not the whole story.

RPA provides a way to integrate IT systems without building an expensive and complicated additional system to do it. Which means that not only can resources that had been absorbed by repetitive tasks be redirected elsewhere, but also data can be collected and used more quickly, securely and accurately; the customer experience can be improved; and the organization can become more efficient and agile.

Find out how RPA could make workplaces far more people-friendly, or connect with Hans Jessen, Global Innovation – RPA Leader.


Becoming an analytics-driven organization

We are proud to be named as a leader for business analytics consulting globally by IDC MarketScape’s annual report series, Worldwide Business Analytics Consulting and Systems Integration Services Vendor Assessment(1).

The IDC MarketScape report cites EY as one of the leading business analytics consulting organizations that provides technical and sector insights and competence to clients.

Find out more about our analytics services, and the importance of not neglecting the human element of analytics.

(1) April 2016 | IDC #US40150316


A business-first approach to blockchain

We hire blockchain specialists globally with not just the ability to understand the technology, but also the ability to ask better questions – like, ‘what happens when value moves as easily as data?’

Read more, or connect with Paul Brody, Global Innovation – Blockchain Leader.


Building a more secure working world

This year we bolstered our cybersecurity services through agreements with leading technology providers. Our services range from end point monitoring (providing deep insight into every computer within the client’s environment) to rapidly responding to attacks, including investigating the root cause and comprehensively remediating any impact.


Working with governments and leading companies everywhere

We work with more than

200,000 clients

In more than

150 countries

including nearly

80% of the Fortune Global 500

We also work with governments, middle-market companies and entrepreneurs.

We help central and local government clients – like Kochi Metro. We also help institutions such as Slovakia’s Association of Innovative Pharmaceutical Industry and the British Museum.

As leaders in high-growth entrepreneurship with more than three decades working alongside the world’s fastest growing companies, we have the experience, authority and know-how to help companies accelerate growth.

We have distilled that experience into the EY 7 Drivers of Growth, which provide a powerful means for determining what our clients need at different stages along their growth journey.

Making smart ticketing smarter

“India’s car-based commuter culture isn’t sustainable,” says Sujith Nair, a senior manager in our Advisory practice. “Without better public transport, average travel speeds could be around walking pace by 2030. Metro railways are a great solution. They don’t take up much space; they’re low-emission and high-capacity. But they’re also capital intensive, and it can be difficult to attract outside investors.”

One city that’s about to open a new metro is Kochi in Kerala, one of India’s 20 Smart Cities investing in new infrastructure as part of a government project. Kochi Metro’s set to be very popular – with estimates that, by 2021, more than 800,000 people will use it every day. Sujith is part of an EY team advising on the project.

“I knew, with close to a million passengers a day, there had to be something for investors,” says Sujith, “it got me thinking about what might happen if smart cards got smarter.”

Using C-EMV (contactless) technology for the first time in an Indian transport system, EY’s team and the leaders of Kochi Metro pioneered a new smart card that would act as a digital wallet for commuters. Rather than being just for public transport – this card could be used in shops and restaurants all over the city. But the innovation didn’t stop there. On offer to investors was an entirely new business model – access to a shared digital platform and a captive consumer-base.

“We approached a number of banks as investors and were blown away by the demand,” says Sujith. “The metro gets capex and a percentage of the non-transit revenue. And it’s a great deal for the bank – as well as receiving a return on their investment, they get transaction fees from a huge commuter base, and branding rights, too.

“The government’s happy too, as it got to reduce its spending and is considering setting the national standards for smart cards based on the Kochi model.”

And it’s not just Kochi that’s benefitting. EY’s model is now helping to attract investment in other Indian cities – Hyderabad and Nagpur – showing just how far a good idea can travel.

When talking is the best cure

The Slovak government faced a challenge: with one of the highest expenditures on pharmaceuticals as a share of GDP in the OECD, it seemed likely doctors were over-prescribing drugs – placing pressure on the public purse. But previous attempts to get costs down – such as rules on how doctors and pharmaceutical sales teams could engage, and price controls – had not so far worked.

In response, in 2014, the government instituted a concept of an industry-wide pharmaceutical withholding tax: taxing any cash and non-cash transactions (like food and travel) between the pharmaceutical industry and doctors and hospitals at 19%. Complex and indiscriminate, it was set to have far-reaching impacts.

Richard Panek, a partner in our Slovak Tax team explains: “In some areas the tax made sense, but in others it had serious unintended consequences – in particular in the field of clinical trials. As a tax on gross revenue, it took no account of the costs of clinical trials, such as blood tests and lab work. Implementing it would have caused major cash-flow problems for doctors – and ultimately stopped the trials.

“The effects would have been serious for patients – who would no longer have access to experimental and potentially life-saving drugs – and also for the industry, diverting some €30m R&D spend annually to other countries.”

The sustainability of the industry, jobs in hospitals and labs, and the continuity of foreign investment in Slovak R&D were at stake. Seeking help presenting their case to the government, Slovakia’s Association of Innovative Pharmaceutical Industry came to us for help.

“It seemed to us talking was definitely the best cure,” Richard continues. “So we worked hard to build constructive relationships between our client and the government – creating a working group to bring everyone together in an open and inclusive way. We then used case-studies, detailed technical tax research and industry-specific positioning papers to explain the complex, far-reaching consequences.”

As a result, several important exceptions were implemented – including for clinical trials: safeguarding R&D spend, the jobs of health care professionals and researchers, and access to potentially life-saving drugs. And in March 2016, our work contributed to another legislative change – a “compassionate use program” that allows hospitals to continue to source experimental drugs free-of-charge, and tax-free, for patients with serious conditions after clinical trials have ended.

By bringing government and business together in constructive conversation, our tax team has helped shape the future of the Slovak health sector. And most importantly, has left a positive legacy for wider society for many years to come.

How do you preserve a museum’s place in history?

When the British Museum decided to move more than 8,000 of its objects and artifacts into a new state of the art storage facility with more efficient access, it asked for EY’s project management recommendations. And when it needed a plan to better manage the flow of its nearly seven million visitors a year, EY’s Valuation and Business Modelling (V&BM) team identified congestion hotspots and made suggestions as to how the crowds could be alleviated.

These are just two examples of the many ways that EY has been helping the British Museum to solve some of its most complex problems and secure its future. As part of the British government’s 2010 spending review, the museum’s grant was reduced significantly, so it has worked with EY to look for new ways to improve efficiency and generate revenue.

“We’ve built a strong relationship with the British Museum, based on a track record of successfully delivering more than a dozen different projects,” said Chris Dabrowski, Director, Performance Improvement, Advisory, and the EY relationship lead.

“We are not considered as just another set of advisors” he added. “We understand how the British Museum works and have built a relationship that allows us to constructively challenge their thinking in new and different ways.”

While he has been leading the relationship with the British Museum, people across all four of EY’s service lines have been involved in different projects. For example, Advisory teams have developed third-party revenue generation business cases for the Loans, Conservation and Scientific Research departments, and have produced a five-year operating-cost model for the museum’s World Conservation and Exhibition Centre.

“We have benefitted enormously from the collaborative approach and from the range of skills at EY, including business process analysis and operational modelling.” said Christopher Yates, Deputy Director of the British Museum. “EY’s ability to think through complex challenges and provide strong data-backed evidence for its recommendations is helping us to develop robust long-term plans for the museum in a changing world.”

EY people work on a pro-bono and skills-based volunteering basis, and gain great experience of an unusual public-sector client.

“Everyone who works with the British Museum says it is one of their favorite clients, because the work is just so interesting and different,” said Chris Dabrowski. “And there is more to come. Our ambition is to build on the strong relationship we have to help the museum in its next phase of development.”

Annette Kimitt

Watch Annette Kimmitt, EY’s Global Middle Market Leader, talk about how we help our clients accelerate growth.

In 2016 we were recognized as a leader in middle market consulting in the first IDC MarketScape: Worldwide Middle Market Business Consulting Services 2016 Vendor Assessment (1).

Find out more about how we work with the analyst community.


Entrepreneurs create new technologies, business models, services and products that change the global competitive landscape. We are proud to help these entrepreneurs via initiatives such our annual EY Entrepreneur Of the Year™ Program, which culminates in the World Entrepreneur Of The Year award ceremony.

EY leaders

Watch highlights of this year’s event.


(1) IDC MarketScape, Worldwide Middle Market Business Consulting Services 2016 Vendor Assessment July 2016, IDC #US41184416.