PricewaterhouseCoopers: Building a Global Network
PricewaterhouseCoopers (PwC) today is one of the four largest professional services firms in the world. It makes up the so-called “Big Four,” together with the three other firms – KPMG, Ernst & Young and Deloitte touche Tohmatsu. (Hoover’s website) “It was formed in 1998 from a merger between Price Waterhouse and Coopers & Lybrandm both formed in London. PwC is a Big Four auditor, alongside. In January 2009, it became caught up in a $1. 5 billion fraud at Satyam, an Indian software company.
As the auditor for Satyam, there are charges of complicity that, if proved, could threaten the survival of PwC (as happened with Arthur Andersen with Enron). ” (Hoover’s website) “Price Waterhouse: Samuel Lowell Price, an accountant, started his practice in London in 1849. In 1865, Price went into partnership with William Hopkins Holyland and Edwin Waterhouse. Holyland left shortly after to work alone in accountancy and the firm was known from 1874 as Price, Waterhouse & Co. The ‘& Co’ and comma were dropped from the name much later. By the late 18th century, Price Waterhouse had gained significant recornition as an accounting firm.
As a result of trade between the United Kingdom and the United States of America, Price Waterhouse opened an office in New York in 1890, and the American firm irself soon expanded rapidly. The original British firm opened an office in Liverpool in 1904 and then elsewhere in the United Kingdom and countries abroad, each time establishing a separate partnership in each country: the worldwide practice of PW was therefore a federation of collaborating firms that had grown organically rather than being the result of an international merger. ” (Wikipedia)
“Coopers & Lybrand: In 1854 William Cooper established his own practice in London, which became Cooper brothers seven years later when his three brothers joined. In the USA in 1898, Robert H. Montgomery, William Lybrand, Adam Ross Jr and his brother T. Edward Ross formed Lybrand, Ross Brothers and Montgomery. Coopers & Lybrand is the result of a merger in 1957 between Cooper Brothers & Co; Lybrand, Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co. ” Wikipedia “In 1998 Price Waterhouse and Coopers & Lybrand merged to form PricewaterhouseCoopers in an attempt to gain a scale that would put the new firm in a different league.
” Wikipedia “How we are structured: We’re structured as a network of member firms, connected through membership in PricewaterhouseCoopers International Limited. PwC’s member firms operate locally in countries around the world. But by working together, member firms also comprise a vigorous global network. This structure provides PwC firms with the flexibility to operate silumtaneously as the most local and the most global of businesses. As a direct result, we are able to serve a broad range of clients: large, publicly-listed multinationals; small, private, domestic companies; and almost everything in between.
In most parts of the world, the right to practice accountancy is granted only to national firms in which locally qualified professionals have majority or full ownership. Consequently, PwC member firms are locally owned and managed. But local ownership also confers two additional strengths: a deep understanding of local markets; and the sense of individual responsibility and initiative that comes from having a stake in the practice. The member firms are linked together through membership in PwC International Limited (PwCIL), a UK membership-based company. PwCIL does not provide services to clients.
Its primary activities are to: identify broad market opportunities and develop associated strategies; strengthen PwC’s internal product, skill, and knowledge networks; promote the PwC brand; and develop and work for the consistent application of common risk and quality standards by member firms, including compliance with independence processes. ” PwC website “The key to this challenge was how to successfully integrate the internal networks of the firms into one network for the new, larger entity that would incorporate and build on the strengths of the two merging firms. ” Case.
PricewaterhouseCooper’s ultimate goal was to establish a common global knowledge base: a networked information service that would be available to the PwC workforce and its clients. To achieve this, however, PwC had to consider size – about 150,000 partners and staff with a geographical coverage in 152 countries and territories – in integrating and linking them together. Prior to the merger, PW and C&L operated from different IT platforms. In addition, there were thousands of databases in different types of servers that had to be rationalized for a global knowledge database to be put into effect.
” Case. “Consolidation was considered the most effective way for companies of this nature to expand their range of services, global capabilities, market share and intellectual capital. As clients expanded their business globally, it became necessary for professional services companies to lifewise expand their global presence. Clients wanted the same application to be applied simultaneously to their respective offices worldwide, which meant professional service firms were required to have a matching (and therefore global) presence in order to be able to respond to such demands. ” Case.
“As a result of the merger, the new company, PwC, surpassed Arthur Andersen, which had previously been considered the industry giant in terms of asset size. PwC had more than 150,000 people in 152 countries and annual revenues pushing US$16 billion. ” Case. “The merger brings together complementary capabilities to add value to our clients of all sizes throughout the world. Clients in the United States will benefit from Coopers & Lybrand’s strengths in strategy and human resource consulting and Price Waterhouse’s equally strong packaged software and global IT implementation practices.
Combined, the two organizations offer clients a powerful consulting resource. – Cees G. van Lujik, Chairman, Coopers & Lybrand Europe, and Jermyn Brooks, Chairman Price Waterhouse. ” Case. “PwC provided unprecedented service to global, national and local companies in markets worldwide; offering a comprehensive range of business assurance, business advisory, tax, management, IT and human resource consulting services and a commitment to helping clients formulate and implement strategic solutions that drive growth and improve business performance.
The two firms were similar in terms of business and geographical coverage, however they were not necessarily similar in terms of industry coverage. The uniting of the various practices offered by Price Waterhouse and Coopers & Lybrand was expected to bring significant benefits to clients, particularly in those industries that were rapidly converging and in which sector distinctions were becoming less pronounced and competition more intense. ” Case. “Traditionally, both PW and C&L were very line-of-service-oriented organizations, as being more industry-focused was a relatively new phenomenon in professional services.
The line of service was the historical model in which most of the PwC people were well versed. For PwC, there was the focus in the industry, but the history was with the line of service. ” Case “Knowledge management was to play an important role in the merger process, as the ability to share knowledge and intellectual capital across the two firms was to become the key to successfully achieving rapid integration with continued client service. The head of the PwC Global Knowledge Management Team explained why knowledge was so important in a professional services firm such as PwC: ‘To a great extent it is all we have, and all we share and sell.
It is the basis of what we do. We sell to clients the knowledge our consultants have and have access to. So managing the resources effectively and making sure we can share it across the consultancy is vital to us. It is the lifeblood of the organization. – Julia Collins, Head, PwC Global Knowledge Group. ” Case Technical evolution has enabled cost-effective methods of capturing, updating and distributing knowledge throughout PwC by way of an intranet. The intranet was the entry point to capture firm-wide knowledge and make it accessible to the organization.
It was the foundation for stored knowledge, which was the core asset for a knowledge-intensive organization such as PwC. ” Case “Knowledge Curve (KC) was the name of the intranet introduced to PwC. Originally developed by the IT team from C&L, the KC was the core of the PwC intranet system. With careful structuring, this knowledge base could become a powerful tool that could be used as PwC’s competitive advantage. Simplicity in usage was important for this knowledge base to be effective, as well as the firm’s ability to capture, package and deliver the knowledge. ” Case 5.
Identify the major issues associated with the implementation of these e-business solutions. “Quote from Julia Collins, Head, PwC Global Knowledge Group: ‘When we merged, we also became a global practice, as we had been country-based before. We faced big change and big challenges in getting people up to speed with how to use things, and how to use the technology which changed when our networks changed. ’” Case “Integration on a global scale was not an easy task. One of the things that made the integration process complex was the way the original systems were developed by each of the firms.
Prior to the merger, both PW and C&L had developed their systems around their line-of-business focus and were independent systems. The problem was that this enabled only limited access to the knowledge base by the people within the entire PwC. The new integrated system aimed to eliminate such an inefficient use of assets. Breaking up the closed structure of the original system and creating a system that would enable everyone in PwC to have access to all the knowledge base was the major goal for the new corporate IT system. This required preparation and time to be completed. ” Case
“Other challenges that PwC encountered included: differences in IT systems and organizational structure, e-mail networking and intranet using Lotus Notes, and integration of databases and servers. ” Case “It took the IT team one whole year of thorough planning to have the integrated e-mail system running in time with the operation of PwC in July 1999. As at February 2000, this work was still on-going. ” Case “Duplication of the database: There were many duplications of the database that, together with the servers, required rationalization. Rationalization took place starting at the office level.
The database problem was typified by the fact that there were hundreds of databases in one country location alone. To rationalize, the content of each database had to be checked and re-evaluated by those responsible for those databases. Such a task was beyond what the IT workforce could do, so the task was delegated to the respective line of service. The process included the following steps: identification of the data owner, a complicated and time-consuming process, but it was completed in a relatively smooth manner; and the identified owner was given the responsibility for updating the database on a regular basis.
“At the beginning of the year 2000, GTS’ main focus was on the GTS itself: its internal policies and procedures. The GTS was reviewing its administrative systems and how it could communicate better with PwC’s customers. ” Case “PwC had resources that other service professional organizations lack. Fully integrating all the resources at a global as well as organizational level to create a knowledge base was the main challenge. This would mean successfully integrating the internal networks and the use of the network. Therefore, PwC had to effectively manage and share the knowledge base across the firm.
After all, knowledge was the ‘lifeblood’ of PwC and it was all Pwc had to ‘share and sell’. ” Case. References McCauley, M. (2000). PricewaterhouseCoopers: Building a Global Network. University of Hong Kong. PricewaterhouseCoopers. (2009). About PricewaterhouseCoopers. Retrieved January 12, 2009 from http://www. pwc. com/extweb/aboutus. nsf/docid/59573FF2E41FA4CD852570 130059050A. Hoover’s, Inc. (2009). PricewaterhouseCoopers International Limited. Retrieved January 12, 2009 from http://www. hoovers. com/pricewaterhousecoopers/–ID__57443–/free-co-profile. xhtml.Sample Essay of Eduzaurus.com