E-commerce is rapidly becoming a major service offering for Ernst & Young LLP but most businesses looking at the web see it as a vehicle for a marketing strategy, with clients implementing systems with any transaction processing functionality being few and far between. At the moment transaction level e-commerce is the exception rather than the rule in Europe and even where it has been implemented the volume of transactions is still very low, Sam Dunnachie, partner in Ernst & Young LLP’s IS Strategy Services division told us. Nevertheless, this week Ernst & Young LLP put together a strategic alliance with packaged e-commerce vendor Broadvision, one of the leading suppliers of one-to-one (or personalized) e-commerce applications. The deal is expected to provide Ernst & Young with a ready-made e-commerce offering to suit corporate and retail banking, a vertical the consulting firm expects to grow exponentially.
Supply chain management is another slice of the market that Ernst & Young has earmarked as drawing high levels of professional services support in the coming couple of years. Against the 120 or so specialist e-commerce consultants that operate within Europe, it currently has 180 supply chain consultants, 80 or 90 of which are based in Germany where demand is strongest.
The Broadvision announcement follows quick on the heels of a deal between Ernst & Young and Hewlett-Packard in the supply chain management sector. The partnership is designed to better enable global manufacturers to optimize supply chain performance. The joint effort centers on HP’s Automation Integration Software (HP AIS), a set of products used to integrate SAP R/3 manufacturing with a company’s supply chain processes. The deal also ties up well with Ernst & Young’s ongoing partnerships with supply chain vendors such as i2 and Manugistics. Ernst & Young use HP AIS to help clients, particularly in process industries, develop and implement a complete integration architecture with the consulting firm providing all the necessary business process consulting and SAP R/3 implementation know how.
In Europe it currently has around 1,000 SAP consultants and a further 1,750 consultants specializing in Peoplesoft, Baan, Oracle and JD Edwards. The ERP sector is not as buoyant as it was two or three years ago, says Dunnachie. A lot of work is reportedly going into convincing clients that business benefits can actually be realized. ERP optimization is the main thing clients are looking for, comments Dunnachie, where systems have been implemented without much customization, where interfaces were not developed too well or where performance is poor. One positive result of the slow down is that churn rates among SAP professionals is not as great as it has been. Staff retention is not the issue it was Dunnachie says
For the year ending September 1998 Ernst and Young reported revenue of $4bn attributable to its global management consulting activities representing a 33.3% rise on revenues for the year ending 1997. The bulk of revenue derives from 50-60 long-term multi-national clients drawn from verticals such as consumer products, banking, telecoms and in the petrochemical industry where clients include giants such as BP, Shell and Mobil.
Ernst & Young’s management consulting offers IT services in five core areas, IS strategy services, ERP, e-commerce, supply chain management and e-commerce security.
Its Information Systems Strategy Services sells four key services of consulting on so-called ‘competitive’ technology; IT alignment and effectiveness; mergers & acquisitions technology synergy – merging separate and possibly radically different IT organisations; and application development methods frameworks. Its ERP team combines business, project management, and application skills for the design and implementation of packages that include SAP, Peoplesoft, Baan, Oracle and JD Edwards.
Ernst & Young’s e-commerce Advisory Services provides guidance on the logistics of electronic re-engineering and develops e-commerce strategies and prescribes system architectures. Particular areas of expertise are considered to be the development of electronic storefronts, banking and transaction processing, integrating smart cards and other peripheral electronic services, extranet architecture and design, business to business transaction architecture, software and intellectual property distribution strategies, and advice on legislative and regulatory implications for cryptography deployment.
The supply chain management practice concentrates on cost minimization, working capital and fixed capital efficiencies and minimising tax liabilities. The four key areas in which Ernst and Young provide consultancy are demand & supply planning, sourcing and supplier management, transportation and distribution, and supply chain strategy.
In demand and supply planning Ernst & Young says it can help clients formulate strategies, develop processes and organization, and apply technologies including ERP and supply chain management software from third-party vendors. It can help develop sourcing and commodity strategies and look to improve distribution efficiencies.
eSecurity Solutions, is one of the fastest growing practices within Ernst & Young’s Information Systems Assurance and Advisory Services (ISAAS) group. Globally this division has more than 1,200 security professionals working for a long list of corporate and governmental clients on electronic commerce operations and network security. Nearly two dozen eSolution Centers are located in major business and technology centers worldwide. These can be used to test tailored security developments. The centres are also used to train clients on latest security practices, simulate current and future IT environments, and experiment and test new security and control software. The main Global Security eSolutions Center is located in Kansas City, US with European showcase eSolution Centers in Amsterdam, London and Paris.
