IS Strategy

In the modern world, Information Technology has become the greatest enabler of business across industries especially for the multinational conglomerates. There are two main reasons behind more and more technological integration in business domain. Firstly, the completion is growing in such an astronomical rate that no company will be in a secured position unless it invents new product or penetrates new market[1].  Secondly, through globalization of the economies across the world, a competitor can challenge a Dominant Local Company sitting in a different hemisphere with ease. That is why Information Technology (IT) strategy become one of the most important facet of the overall business strategy.

Information Technology strategy is a plan having planning horizon of 2-5 years. The planning horizon may change from company to company as per the business requirement. It is proven that, the companies which align their business strategy in line with the IT strategy outperform the peer companies. There is no definitive formula is available in the market which will transform the business strategy into the IT strategy out of the box[2]. Hence it is essential for the company to devises the business strategy in such a way that it will fit into the progressive looking IT strategy. 

The diagram shown aside, depicts the relationship between Business strategy, IT strategy and Operational strategy. First the alignment of the business strategy along with IT strategy will be explored and then the operational strategy will be devised to execute the requirement of the business strategy with input from the IT strategy[3]. The importance of the IT strategy grows in case the company is diversified into multiple geographies and multiple industry verticals as the factors determining the proper execution of the business plan are too many to be handled by non-integrated IT measures. 

In this assessment, we are going to deep dive into the IT strategy of PwC one of the Big4 accounting firm of the world. PwC (previously known as PricewaterhouseCoopers) is a professional service network firm headquartered in London, United Kingdom. PwC is a network of firms in 158 countries with 236,000+ people. The company’s global revenues were $37.7 billion in FY 2017[4]. In FY 2017, PwC firms provided services to 419 companies in the Fortune Global 500 and more than 100,000 entrepreneurial and private businesses.

The revenue breakdown of the PwC across different geographies (in US$ million)

	FY17 at FY17 ex.   rates	FY16 at FY16 ex.   rates	% change
Americas	16,800	15,742	6.7%
Asia	4,900	4,391	11.6%
Australasia and Pacific	1,650	1,452	13.6%
Central and Eastern Europe	776	678	14.4%
Western Europe	12,192	12,339	-1.2%
Middle East and Africa	1,362	1,294	5.2%
Gross revenues	37,680	35,896	5.0%

Table 1

“PwC is the brand under which the member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide professional services. Together, these firms form the PwC network. ‘PwC’ is often used to refer either to individual firms within the PwC network or to several or all of them collectively”[5].As a professional firm, PwC has broadly three different line of services:

1. Assurance
2. Tax and Compliance
3. Advisory

The entire organization spreads over almost 157 countries across 5 continents. High level organizational structure is like the below mentioned diagram. Each of the entity at the country level has different legal status. Pricewaterhouse Coopers International Limited (PwCIL) is the global non client facing reporting organization. The sole purpose of the PwCIL is to work as a coordinating entity among all the member firms of the PwC network spanning across all the geographies[6]. The PwCIL mainly responsible for the brand image enhancement, global strategy& policy implementation, risk mitigation among network firms and global quality standard maintenance.  Robert E. Moritz is the current chairman of the PwC global. 

How to Align Business Strategy and IT strategy

Global technology leader Sigal Zarmi works as the Chief Information Manager (CIO) of the network.[7]Global IS strategy is formulated by the global technology team reporting to her. This long term global IS strategy plan is propagated to the network firms as the standard practice in a staggered way. Each of the network firms consists of proper IT management team except few very small network entities which leverage shared IT management network provided by the bigger firms.

At the global level IS strategy reflects on the following broad points:

• Provides the transformation strategy to the global network so that PwC will be at par with the industry best technology standard. The completion among Big4 is very fierce[8]. So it is imperative that implementation of cutting edge technology and proper due diligence in maintaining highest standard of integrity and quality in technology spectrum is required.
• Also provide the future technology roadmap which is compliant with the global financial operation standards. Enterprise wide and business vertical wise technology solution for global network.
• Global IS strategy of PwC also leverage the technology in such a way that risk management is done accurately and timely. Historically the audit industry is vulnerable to different financial fraudulent activities, so the risk mitigation is the most important thing. PwC is moving towards the preventive risk mitigation rather than post facto risk management. With the advent of data analytics and global strategy of implementing analytics based risk mitigation technology solution helps the firm to implement proper due diligence in risk profiling before a project start and also provide insight of prospective risk prone jobs where more caution to be taken.
• Another major target of the global IS strategy is to provide higher productivity and compliance by introducing more automaton and less human intervention in data crunching, data input and data consolidation.
• Provide network wide unified ERP model in next 5 years so that each of the network firm is compliant with the global standard following industry leading best practices. This will narrow the gaps between different standard followed by the different network firms in terms financial and operational activities. Here each of the network firm will also be compliant with local governing body. This also ensure that KPI’s fixed at the global level is properly maintained and exercised in the network firm level.
• Global IS strategy follows the staggered implementation methodology rather than the big bang approach. As the company is diversified in so many countries complying different accounting, auditing and operational standard the staggered approach of rolling out the technological solution geography wise make sense[9]. Though it is more time consuming than the big bang approach, it is far less risky and easier to implement.
• PwC global IS strategy also invests a lot in building strategic alliance with other global industry leading technology giants like Google, Microsoft, Lenovo, Oracle, SAP etc. This provide the best of the products available in different technology verticals to PwC.
• Global IS strategy also recommends all the network firms to follow the global standard though the network firms are not legally bounded by the global network to accept the recommendation.
• Recent global IS strategy is to move towards more cloud oriented products rather than on-premises product as the entire technology industry is going through a transformation towards cloud from on-premises technology stack. 

PwC has broadly three different line of service:

• Assurance
• Tax
• Advisory

The business requirements of the three line of services are different from technological aspect. Let us discuss in brief on these aspect

• Assurance: Assurance is the largest line of service of PwC. Auditing practice has faced various controversies and challenges over the year across the globe. PwC is no exception. PwC audits many of the fortune 500 companies over the years. The biggest threat to the assurance service is independence check and integrity of the data and resources. PwC IS strategy is formulated in such a way that all the auditing trail and documents is properly secured. Also before project initiation, proper background checking of the customer along with the resources are done through data collected from various sources. The entire background checking process is unified in the global level.
• Tax: Tax is the second largest line of service of PwC. Tax compliance generally varies significantly from one geography to another. Hence unified tax compliant technological solution is difficult to achieve. So global IS strategy does not provide greater details in tax specific technology backbone[10]. On a generalized basis strict auditing trail and proper data archiving is done at the local network firm level and sometime country specific tax compliant technology solution is provided by the local network firm.
• Advisory: Advisory is the fastest growing line of service of PwC. Advisory has different sub-divisions. Here the risk is less than the assurance service. Advisory service leverages the global knowledge repository extensively. The global IS strategy provides great attention to the global knowledge repository building as this directly improves the productivity. In near future the knowledge repository is going to be overhauled which will be more user centric with a focus on simplicity and compliance.

Beside this, a huge transformational change is devised in the global IS policy. Mostly all the internal shared services like Human Resource Management, Financial Services, Resource Mobility Management etc. will be more technology, process and data driven. Proper data capturing at the various stages will provide greater insight to internal KPIs and transparency. The entire firm’s data archiving and mail process is moving towards the cloud in a staggered way. With the strategic alliance between PwC and Google the on premise mail and document transfer method is moved into Google based cloud. This has already been implemented in PwC US, PwC UK, PwC Australia. Now this is being rolled out in other network firms. 

In wake of Enron Scandal in assurance industry, the greater needs of proper governance and policy implementation is felt by everybody.

Proper governance will ensure the KPI’s of global IS strategy

• Minimize IT related cost
• Maximize transparency
• Minimize risk related to IT asset and data stored in laptop, data card, server and cloud.

To achieve the proper governance PwC follows the below mentioned processes strictly:

• PwC generally maintains different sets of documents to encapsulate all the Ethics, IT related policy and Information related policies.
• Refresher course for all the staff including the partner is arranged on a periodic basis.
• CMMI audit and Internal IT related audits are performed diligently.
• Most of the network firms are highest rated audit compliant entities[11].
• IT and information security related policy adherence has been one of the key KPI’s of employee appraisal system.
• Each processes of this measures are SOP based, so that proper execution of the IT plan can be happened and tracked.

Robert E. Moritz is the current chairman of the PwC global network. Network leadership team consists of Raymund Chao, Kevin Elis, Tim Ryan and Norbert Winkeljohann. The overall alignment of the business strategy along with the IS strategy is overseen by the network leadership team. The global network leadership team has laiddown the long term vision of PwC.

Global leadership team works under the supervision of the global network leadership team. There are various vertical positions in the global leadership team. Few of the important people related to IS strategy and IT management are as follow

Sigal Zarmi:She holds the position of both global CIO and CIO of PwC US. Her responsibilities have included developing and implementing PwC’s IT transformation strategy; leading the delivery of IT services to the PwC network; and creating the technology roadmap for PwC’s global portfolio of IT projects, initiatives and enterprise-wide systems[12].

Mary Waldron: She holds the position of global Chief Risk Officer. She is responsible for leadership of network and global risk management from a strategic, operational and client perspective, and leadership and oversight of risk governance, strategy and compliance across the PwC network.

Christopher Kelkar: He fulfills the role of Global Alignment Leader in PwC. He is mainly responsible for the synergy between the global strategies with network firm’s strategies.

Carol Sawdye: She is the Chief Operating Officer of PwC global. She mainly responsible for collaborating among the different verticals of leadership team and oversee the execution of the strategic plan from a broader point of view[13].

Company Profile

Governance process is generally handled by the local network firms following the guidelines set by the global PwC.  

The entire IT management team is divided among two divisions under the supervision of Chief Information Officer. First division headed by the Chief Information Security Officer accounts for the Information and data security policy governance and the second division is responsible for IT infrastructure and asset management.

To ensure proper governance, PwC builds model code of conducts both locally and globally. PwC’s IS strategy is to build a sustainable framework and approaches which will mitigate outline risk and also help each of the member firm and its staff to collaborate and understand the strategy properly.

PwC’s strategic plan and its execution is subject to the regulatory compliance which differs from one network firm to another. Hence fine tuning of the global strategic plan is necessary at the network firm level[14]. Voluntary internal audit and high level of inter compliance benchmark is being set. This is done in order to ensure proper diligence at the execution front.

Different types of risk can arise during the execution cycle of the IT strategic plan like

• Information security risk
• Integrity risk
• Infrastructure risk
• Investment or expense risk
• Relevance risk etc. 

Operational level risk is identified on a day to day basis and proper risk mitigation is managed on priority basis at the basic managerial level itself. Project level risk identification and address mechanism is in place within but not limited to business line of service of the firm. At the firm level separate independent risk management team handles all the risk related issues and pre-emptively provides solution. Based on the past experience and changing regulatory and socio-economic condition, strategic level risk management plan sets the broader guideline to be followed.

PwC’s IS strategy plan is more leaned towards auditing and regulatory compliance. So there is scope of improvements in providing simpler but effective compliance framework to the end user. This transformation will provide more productivity and reduce redundancy. Internally business line wise alignment of the IS strategy plan can be achieved more effectively as the compliance and regulatory requirements are drastically different for Advisory from Assurance or Tax. 

Conclusion

PwC is working towards building a unique IS strategy plan. The business strategy and structure of the business model of PwC is ever evolving and agile in nature. This will ensure proper functioning of the firm mitigating all the risks and sustainable development can be achieved in near future

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