Tony Kanters (SOFY) discusses real-time service provision, new business models and his belief in the platform concept. ‘I’m convinced that the majority of consultancy is going to move to digital platforms.’
Four years ago Tony Kanters embarked on a new adventure at KPMG. He and Aart-Jan Boor and their small team wanted to latch onto trends such as the cloud, market demand for a different type of service provision and making consulting knowledge more easily accessible. So, they began digitizing KPMG’s most successful services. It was a side project to which they dedicated one day a week, in which they invested independently and which grew steadily. They used a small budget to hire two developers. ‘We produced a few prototypes. But then you need customers in order to improve products. Early adopters.’
Kanters has no trouble recalling the very first customer to buy a SOFY module. It was Hans-Martin Knuppel, IT Manager at an industrial construction company in Germany. He bought a monthly subscription for the application that analyses functional divisions and access to confidential information within ERP systems, so that, for example, the person who pays creditors is never also authorised to alter bank account details. This is to prevent fraud. Until then this could only be checked sporadically and in retrospect. ‘Hans-Martin was the first person to take the plunge and purchase a subscription. From then on we grew.’
By now, Kanters and his team have digitized seventeen KPMG services which are offered as subscriptions under the name SOFY. For instance, one solution checks the quality of data. Whereas another module examines bottlenecks in operational and financial processes. All applications have the same basic components, such as reporting, workflow notifications, interfacing, etc. ‘We use that same basic structure again and again,’ says Kanter, ‘so technically we have a single product. Marginal costs remain so low that we are able to experiment. We are now able to bring tools to market that provide added value to a smaller set of customers.
SOFY operates on two levels: process improvement and compliance issues. When a possible improvement or risk is detected, it is linked to a workflow that forces improvements.
SOFY helps KPMG anticipate the future by digitizing KPMG’s portfolio and inventing new services. Customers and their information systems are connected to the cloud, enabling services to be provided in real-time and giving customers direct insight into their circumstances. Kanters: ‘I’m convinced that most of our current services are going to be provided through this type of platform. Until now, KPMG primarily sold consultancy services through traditional channels. So, a customer who wants to know how his debt ratio relates to revenue is interviewed a few times and then receives a thorough report for a specific fee. SOFY is available as a subscription model. ‘It’s a different business model. It’s less labour-intensive and therefore easily scalable.’
‘SOFY is a different way of solving problems. For existing customers but also often for new, smaller customers who were previously not able to make use of services invoiced by the hour. Traditional consultancy will also continue to exist for complex problems that can’t be standardised.’
Kanters expects relations in the consultancy market to change significantly in the new few years. The balance between “the big four” is going to be disrupted, he’s convinced, but he’s not willing to venture a prognosis about how long this will take. ‘I don’t believe in forecasting anyway. Partly because your own efforts don’t always proceed in synchrony with the market. The main thing is to get the fundamental trends right. I believe that we’re focusing on the right trends by digitizing our portfolio of products. Not just the fact that we’re doing this, but also that we’re doing this in a cloud model which is accessible all the time and from anywhere. Customers are increasingly coming to expect this, partly thanks to the likes of Google and Microsoft.’
‘My dream is to make most of KPMG’s services globally accessible through a single platform. It will not be successful if all the services are completely separate. The future is the platform concept and on a larger scale I think point-to-point solutions will be minimized because they simply aren’t scalable enough. Based on that idea we will create an enormous community of customers and then the network effect will kick in, which smaller software developers will have trouble keeping up with. Knowledge and experience in the area of consulting are valuable because they reach multiple customers and situations.’
It is not only revolutionary but digital solutions didn’t even exist in the form that KPMG offers. Also that the solutions can be compiled more or less to suit each individual customer. ‘Organizations only use 50 to 60 percent of the functionality in software they purchase. We develop the 90 percent they actually need. Why would you buy a Porsche if you don’t need one?’