Information Technology Reference
In-Depth Information
Today, KPMG has three main lines of business: auditing, tax preparation, and
advisory services. The first two are the older, traditional kinds of business that date
back to the 1870 era. Advisory services is a more modern business based on com-
puters and software.
The KPMG advisory groups also have three broad ranges of service: manage-
ment consulting, risk assessments and management, and restructuring.
Note
The term “risk” is an important word that is in rapid evolution. Up
until the computer era, about 1970, risks were either financial or
legal. In today's world of hacking, viruses, and denial of service at-
tacks, computer and software risks are now a critical component of
risk management.
KPMG is a microcosm of the history of auditing, accounting, and management
consulting. The companies in this group have frequent mergers and name changes.
They play a major role in corporate operations because an annual audit is a critical
milestone that is important for stockholders and business activities such as venture
funding or future mergers. Readers should read the section on Accenture in this
chapter to learn what can happen when audits are not done well. (Arthur Andersen
had to give up its license as a result of the Enron audit.)
KPMG's advisory services have become large and well respected and serve
many major corporations. It is a multinational organization, but its corporate struc-
ture is intricate and complex. The KPMG groups in each country are separate legal
entities that are part of a cooperative organization headquartered in Switzerland.
The reason for this perhaps is to provide liability protection. In any case, KPMG
is an interesting case study for business schools.
Lotus
Lotus shows that Silicon Valley was not the only venue for software startups.
Lotus was incorporated in Westford, Massachusetts, in 1982 by Mitch Kapor and
Jonathan Sachs with financial support from the venture capitalist Ben Rosen. Jim
Manzi started as a consultant and soon joined to become the President of Lotus.
Mitch Kapor had previously worked on the pioneering VisiCalc spreadsheet at
VisiCorp, where he was head of development (VisiCorp was yet another pioneer
company).
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