Our organisation

During the year we welcomed Norway, Saudi Arabia and Kuwait to KPMG Europe LLP. More recently, in December 2011, we welcomed Jordan.

We add new ELLP firms only when we can be sure that the merger offers recognisable benefits to both our national practices and KPMG Europe LLP as a whole.

Working together, we are much better placed to build true global expertise for the benefit of our clients.

We are also building KPMG Europe LLP through carefully targeted acquisitions that are helping us to enhance our capabilities in areas of critical importance to clients.

We continue to look for new opportunities for growth by acquisition. But we need to balance carefully the speed of our acquisition programme with the need to integrate the skilled people joining us into the KPMG culture and organisation.

A key ambition behind our programme of change is to achieve operational excellence — both in our front- and back- office functions.

We are aiming to improve the delivery of front-line services by using more efficient operating models.

A great illustration of this is our newly established Centres of Excellence, where we are bringing together leading experts from our member firms to support clients operating in the six key growth areas identified by our global strategy. The idea is to make it much easier for them to collaborate with each other to create really innovative solutions for our global clients working in these sectors.

A number of these have already been established, including an ENR Centre of Excellence in Moscow, which now serves clients globally, not just in Russia and the CIS; a Climate Change and Sustainability Centre in Amsterdam; and a Financial Regulation Centre in London, which works alongside complementary centres in Hong Kong and New York.

We have turned the recent establishment of Portfolio Solutions into an opportunity to build a global Centre of Excellence in helping clients manage large and complicated loan portfolios.

We are also looking to lower the cost of delivering front-line services, while maintaining the highest standards of quality, by transferring selected areas of our work to lower-cost locations.

KGS — jointly owned by KPMG in the UK and other member firms of KPMG International — is, for instance, now carrying out a range of important Advisory services for the UK practice. Progressively ELLP firms are taking advantage of this important resource and we expect that process to continue.

Another example of this approach is the newly established Indirect Tax Global Compliance Centre in Budapest. Initiatives like these are not only allowing us to control costs, but are also giving us access to rich new sources of talent.

Take the introduction of our integrated back-office IT platform, SAP. It has now been implemented across the UK, Germany and Spain, with the Netherlands due to go live with the system in 2012. SAP will progressively be rolled out to other ELLP member firms giving us a single efficient way to manage a range of activities including finance, IT, people management, marketing and client engagement.

We now plan to consolidate our data centre for infrastructure, with the main centre based in Frankfurt, replacing the individual centres currently located in each of our markets. In spring 2012 we also plan to open a Shared Service Centre in Prague to manage parts of our finance and HR back-office functions. We expect our UK, German and Dutch firms to take the lead in operating the new centre, before rolling it out more widely over the next few years.

Steering through such a volume of change across KPMG Europe LLP presents clear governance challenges. We have to make sure that great ideas get turned into practical and working solutions that will produce clear benefits for our clients and for the ELLP firms.

During the year we set up a Shared Services Executive to oversee the programmes we are undertaking. With representatives drawn from across our major back-office functions and country representatives from the UK, Germany and the Netherlands, our three largest practices, the Executive is not only overseeing our initiatives but also acting as a forum for new ideas.

The Executive provided real focus during the year for all our efforts to harmonise, standardise and optimise our processes. It is also keeping us fully focused on the benefits we know we can achieve as an integrated organisation — much higher quality specialist services for our clients, developed in an efficient and inspiring work environment.