15 August 2001
Ernst & Young is one of the big five accounting firms in the world and has been present in Malta for the past year. David Lindsay speaks to E&Y's Mario Galea to discover what it takes to become a big five member firm, the emphasis of IT and employing the right people and on the changing face of business in Malta.
What is Ernst & Young and how did the Malta membership come
We are one of those firms. Of course there are larger firms such as those found in the bigger cities in the world, like London and New York, which employ anywhere between 2,000 and 4,000 people. We employ far less than that but, but by having around 70 employees on board so far, we are relatively large and this growth that has been achieved in a comparatively short period of time.
This enterprise was set up as Ernst & Young a year ago, in July 2000. However, this inception was preceded by a preparation period of four to five years.
Our rate of growth has been impressive, but it is within the context of modesty. With all the other big five firms being present on the island, we know that what stands out most about us is our rate of growth, as other firms on the island are much bigger and have been around for much longer than we have.
Indeed, we have not had as long as the other firms have had to develop, so our rate of development has to be much faster if we are to survive in todays market.
Coming back to your question as how Ernst & Young came about, I started my experience some 16 years ago with the company and it became apparent in the mid 90s that Ernst & Young needed an office here in Malta, as it was not properly represented.
It so happened that I was aware of the opportunity and that I was also uniquely related in Ernst & Young as I am the only one who has worked for the firm in the past. I realised that we had an opportunity and that we had to do something about it. Together with my partners we arrived at a stage at which we agreed to prepare this firm for eventual membership to a big five, which a formidable task requiring good measures of both courage and investment.
In May 2000, after a number of quality assurance tests, we were informed that we had been accepted to become qualified full members of Ernst & Young.
We were assisted by the Italian office in Milan during the process, which guided us through the preparation period. That helped a good deal as the Milan office is one of the major offices and with their guidance, we managed to organise the firm in such a way as to gain entrance to Ernst & Young and began carrying out operations under that name.
Apart from being able to bear the name of Ernst & Young, what
other beneficial aspects does membership bring?
The second foremost benefit is the access to expertise. We have expertise all over the world. This expertise, through an IT infrastructure, makes our offices very much in touch with each other at any point in time. So whatever we need, even if we dont have the specific expertise locally, there is always a colleague just a few keystrokes away who can help you with any query.
All member firms and their cumulative 85,000 employees are available at all times. The firm has made a concerted effort and has been successful in a big way in being truly global. We are seeing the results of that by working hand in hand with other offices and you get to know these seemingly distant colleagues as you know your Maltese colleagues.
However, not all prospective clients are interested in recruiting a big five name, but its a process that filters through. We needed to know what type of client we can serve better and which clients are better served by being your clients. By that I mean that one very basic concept within our firm is the concept of delivering value. There are methodologies, systems and methods of how to achieve this and we here in Malta are working hard to apply these philosophies toward our clients.
How does your service differ from mere accounting?
However, in order to deliver value you have to have the people to do it. Ernst & Young is very much centred around people. There are two very important aspects of our business. One is delivering value to our clients, by actually being of use to the client as opposed to simply helping the client to comply with the law. We do act as business advisors, not only when we are asked to, but we adopt the mentality of being business partners, we understand their business in such a way as to be able to identify opportunities that will give them value.
So client focus is one of the main components, while people is the second. We cant deliver value without having the right people, the right expertise not to mention the right set up, such as our IT infrastructure.
However, people who can deliver this expert business advice beyond identified opportunities dont come cheap and they dont necessarily stay on once youve recruited them. You have to make sure you retain them. This type of professional is very mobile and competitive. In Malta, one has all the big five represented here, we all want our share of business, I believe that we all chase international business, but we are all keenly enthusiastic about the local market. So we are all sharing the same number of limited people and therefore, the only way to retain your staff is by simply paying them better and better salaries.
That means that we have to deliver our services not below a certain minimum cost and that automatically and unfortunately it is an accepted fact that the market filters out certain clients who are not interested in having big five service because they can do with less.
Accordingly, whilst we understand the realities of the market and are very keen on being of service to all businesses in Malta, we do place emphasis on going more for corporate work than entrepreneurial work. However, we do not exclude entrepreneurial because it is the seed of corporate business.
You can have a very successful entrepreneurial business that keeps growing, we continue to chase this kind of business. In fact, we take entrepreneurial business as a challenge in helping the entrepreneur within the opportunities that Malta has to offer. We assist them to develop in such a such a style that one day he or she can perform in the same way as a corporate business.
We dont ignore the entrepreneurs business at all, but there is a certain automatic filter with the clientele. Of course, the market has enough levels to cater for the business needs of all those in the business sector.
When acting as a business advisor for a client, is that more in
terms of identifying market opportunities, or to fine tune the workings
of the company?
However, the question is valid in the sense that we do take requests for personal services as an opportunity to fine tune our methodologies and to apply the tools that we have been provided with.
But this is all part of the whole process. You cannot position yourself on the market unless you give good advice, you cannot give the best advice, in our case, unless you make use of the tools and the facilities given to you, which is one of the reasons that one becomes a member of a firm such as Ernst & Young.
It is quite an onerous task. You have to look after standards, you have to impress with methodologies and with whatever you do. Its not always easy to achieve that but the only way to succeed is to use each and every opportunity to improve and to try out the tools that are at your disposal. We are inundated with tools, methodologies and knowledge that we can put to use for our clients.
You mentioned an impressive growth rate, what factors are attributable
to such growth?
In Malta, we provide our people with impressive training opportunities. For example, we have just concluded an induction course and we have used Ernst & Young's audio visual and other facilities as part of the course material to show them what their lives at this firm ought to be like.
Another opportunity for our employees is that of working abroad. Many members of our staff have spent between three and six months working in the larger offices abroad to get the feel of these larger offices. They bring a lot of wealth back with them and these are the people who spread their experiences amongst those who willingly stay behind.
Of course, whom you serve is a very important element in who you are going to employ. Today's employees are no longer merely looking for work, they are looking for fulfilment. Today's professionals look for a good way of starting their career, while those who are experienced are looking for the best way to progress with their careers. The question is whether they want to work in a saturated, mature firm or if they prefer working with a firm with which they can grow and develop.
The new graduates are looking for a good way of starting their career on some footing in order to continue moving step by step toward their ambitions. It is ideal to join a company when it's young and when one has enough faith in the people who are running it and with enough faith that one day you will be part of the leading team. This is how we try to promote the firm.
This is a growing firm and one that is, all over the world, more than just growing, it's as present and large as any other. But in Malta we have the opportunity to grow within something that has already matured overseas. It's an exciting, and sometimes a bit of a daunting task. However, we have a lot of good brains here that help each other to live up to these challenges.
As I said before, this is a firm of people, in which people come first. We are doing our best to employ the best people and to keep them on board. We know that Ernst & Young has the best material to keep them interested, but we also have to ensure that the firm here lives up to the Ernst & Young name world wide. This is where it becomes a bit daunting - because of the very high standard of the firm, it settles for nothing but excellence.
Do you see the face of business in Malta changing, in the way people
carry out business, in the way that businesses are structured?
These are changing not only through international businessmen investing in Malta but also because of the local consumer, who today is freer to choose. Their shopping centre is no longer necessarily in Malta, they can go elsewhere. They can also do their business and earn their profits elsewhere and therefore, unless the Maltese businessman improves the way he does business, he will simply not satisfy the consumer and will not satisfy his stakeholders.
There is no choice, the way we do business is changing and it will continue to change. That is why firms like Ernst & Young find a place in this country, otherwise there would be no room for so many sophisticated firms. All the big five and the other large, sophisticated firms invest a lot the world over in being sophisticated because their clients are becoming more sophisticated and Malta is definitely no exception.
With this change, the market is getting tougher, but if you work hard, intelligently and with good business advisors, then it is more likely that you are going to succeed.
The whole scene is improving when it comes to firms like ours and what we can provide because, although the businessmen out there can do what we do, there is a certain level which they'd rather pay advisors to achieve. By doing so, the client gains access to our knowledge databases, knowledge is one of our main commodities.
Can you elaborate on these knowledge databases?
If a member firm develops something that is considered by the central body to be of good practice and generally applicable, then it qualifies to be placed on the web. So when a client in Malta asks us about a particular service, we don't have to start from scratch. We can see how our colleagues have handled similar situations and, more often than not, we find all the logistics we want in the database.
Then it is up to our intelligent people here in Malta to learn from the experience and apply it to our clients' specific circumstances. You obviously can't just copy what people have done in New York and apply it to a local scenario. That is why databases, no matter how good they might be, are not going to get you everywhere. You need the people who are able to exploit the information at hand.
This doesn't come easy. There has been a great investment to build these systems, there is a lot of effort and investment, in what we call non-productive time and in research ensuring that there is enough technology and knowledge to go around so that our people can be of the best service to our clients.
We are fully aware of competition, we know that our competitors can
deliver as well, but we always try to be slightly better by ensuring
that the client gets over and above the value they are asking for. Of
course there are always there difficulties, but that is part of the