Professional Services Monitor: Today

Prepare to smudge some newsprint on your giant foam “#1″ finger. The Wall Street Journal has an excellent article, which combines most of my favorite things: college football, great writing, and objective analysis. In The Real No. 1, WSJ crunches numbers to determine the top college football program, ranked by the number and effectiveness of its alumni in the NFL. The writers created a new metric–”Alumni Success Points”–to combine an individual player’s playing level (starter to benchwarmer) and that player’s team’s success. Additionally, they came up with “Draft Success Points,” determined by player draft rounds.
All that adds up to awarding Florida State the top ranking, not surprisingly.

No contest: Former Seminoles blew away the pack, finishing first by an 11% margin. Scouts say top athletes and an emphasis on teaching fundamentals make the Seminoles great pros.

Our beloved Washington Huskies came in at 19th, somewhat as well surprisingly given the dearth of wins in Seattle the past few seasons. The Huskies had only 1 player drafted in 2006.
The The Dow Jones College-Football Success Index covers only players appearing on 2005 rosters. Perhaps in the future we could see an analysis taken farther back, say to 1970 after the AFL/NFL merge.

Collectively, the Big Four do dominate the global professional services market. But these heavyweights are fiercely competitive amongst each other. Earlier this week, Ames Research Group released the latest Big Four Quarterly Competitive Summary, covering this auditor change competitive activity between the third quarter of 2005 and second quarter of 2006.
Ernst & Young widened its lead in winning those engagements on which it proposed. In other words, E&Y has a league-leading batting average. Overall, E&Y was invited to over 60% of competitive opportunities during the past year, and won nearly 40% off those. Through the third quarter of 2002, E&Y had led the Big Five/Four in this key competitive metric by a large margin. Following the Andersen collapse and reshuffle of clients, E&Y had to deal with the six-month suspension in 2004. Though only enforced for six months, the suspension actually impacted the firm for at least 12 months. Ernst & Young has come back strong, however, boosting its engagement success rate steadily since the first quarter of 2005.
KPMG has dealt with its own legal and market setbacks. However, in the past six months, KPMG has been putting these distractions to rest, and we have noticed the firm reasserting itself. Notably, KPMG recently hired a seasoned PR executive to a newly created position of chief communications officer. In the market, KPMG has kept its invitation rate at nearly 60%, and the firm is beginning to convert these opportunities to wins while narrowing its net loss.
While Ernst & Young has edged Deloitte in engagement success rate, Deloitte remains the all-round steady performer among the Big Four. Although the Big Four need to address their continuing net losses in market share, Deloitte has lost the least amount of clients on a net basis since late 2003. And when looking at winning situations, Deloitte won the largest share since 2004, although E&Y is catching up.
PricewaterhouseCoopers situation remains a mystery. The firm is still the largest in terms of overall market share among public and private companies ARGI tracks; PwC leads E&Y by about a percentage point. As noted above, the Big Four continue to have net losses in clients. However, PwC’s net loss appears to be growing while the Other Three are shrinking their losses.

Related: ARGI Releases Big Four Quarterly Competitive Summary, KPMG Names Two to Leadership Roles

Making one’s way through most Big Four offices is an exercise in badge-flashing and card-swiping. Access to building floors is usually regulated, and interior doors are always controlled by keycards. A press release from AXCESS International Inc. describes a new effort in security by PricewaterhouseCoopers in Mexico City. While the press release is both thick with company jargon and short on operational details, AXCESS will be providing PwC with a RFID tracking system for sensitive assets, primarily laptops. Laptops will be embedded with a chip to enable tracking their movements in and out of secure spaces just as people are tracked by their keycards. The Big Four have had their share sensitive information loss through laptop theft, and this appears to be a direct response. Again, the press release does not make operational details too clear, but it is conceivable that PwC would be able to track not just the physical laptop but it’s entire contents as well. Microsoft’s server technology and mobile profiles give IT administrators the ability to track and audit data on individual computers. And PwC likely has additional measures than the built-in MS capabilities. Tying the laptop RFID tag to the laptop network identification ought to be quite simple, if somewhat tedious. Thus, one might expect this security system could prevent a laptop from leaving a facility based on not only its owner but also the hard drive’s contents. Or, as AXCESS puts it: “Alarms are automatically triggered if an asset leaves a controlled area without authorization. Doors can then be automatically locked, and typically wireless alerts are sent to security and responders to recover the asset before it leaves the premises.”

In the last two days, KPMG has named two people to leadership roles within the firm, one from within and one from outside of KPMG. First, Henry R. Keizer has been named as global managing partner, audit, for KPMG International. Mr. Keizer is current vice chair-audit for KPMG LLP and will stay in that position as well. In the firm’s press release, Mike Rake, KPMG International chairman, said, “Henry Keizer is an outstanding leader who brings a wealth of exceptional audit experience to his new role, in addition to broad experience across a range of industries and a demonstrated commitment to achieving the highest levels of professionalism.”

In the second move, KPMG has hired Kathleen Fitzgerald “as executive director of communications serving as chief communications officer,” a newly created position in the firm. Ms. Fitzgerald has considerable experience in public relations at the executive level. She was SVP for PR and advertising at Lucent for eight years, and was most recently a managing director at Text 100, a PR firm specializing in technology.

Links: PRNewsWire “Henry R. Keizer Named Global Managing Partner, Audit for KPMG International”. PRNewsWire “KPMG LLP Names Kathleen Fitzgerald to Lead Communications”.

E&Y has become the second Big Four firm to offer publicly-available podcasts. Deloitte has been offering its Insights podcast since January 2006.

E&Y has two podcast channels: International Tax, and Transactions. Both require a brief, and free, registration with ey.com to gain access.