How KPMG is building its managed services arm in the Netherlands

17 November 2022 6 min. read
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Having built a presence in the managed services space around the world, KPMG has now also launched the business in the Netherlands. Leaders of the practice Partha Basu and Jotham Hensen spoke to about the firm’s Dutch ambition, and how it adds to KPMG’s leading advisory market positioning.

The rise of managed services is one of the top trends in the consulting landscape. While consultants are known for helping companies with transformation and change – coming in, advising and implementing, then leaving – managed services extends that client relationship one step further – into the day to day operations.

As companies deal with a growingly complex (and digitising) landscape, many find that outsourcing the maintenance and improvement of processes and technologies provides them with a stronger foothold to deliver efficiently, with agility agile – while being able to focus on the core business and innovation.

KPMG is building its Managed Services arm in the Netherlands

“Our managed services offering involves process, people and technology support on a continuous basis,” explains Basu, who mid-2021 was handed the remit to establish and grow the division from the firm’s Amsterdam office (which technically is also KPMG’s global headquarter). “While the responsibility for delivery of the service is owned by our team, we ensure that we deliver as per clients need since the ultimate accountability is always with the client.”

According to Basu, while the sector has traditionally been dominated by companies specifically associated with BPO, IT and technology, large management-focused consulting firms have the capacity to break into the industry, due to the deep functional expertise they bring, the breadth of their services, and the technology fundament which they have built over the years.

In particular, KPMG is already enjoying a successful launch in the space – focusing on risk & compliance, internal control and cybersecurity domains. “We already have a large corporate client, and we are engaging with a large bank and a large public sector entity,” says Basu, quick to add, “we obviously can’t name our clients specifically.”

“And there are many exciting things on the horizon,” added Jotham Hensen, a manager at KPMG and a core team member of the business.

Asked about the focus of KPMG Managed Services in the Dutch market, Basu and Hensen pointed at five areas. First are internal control and risk management. In both cases, KPMG offers continuous checks and screenings on controls and processes, followed up by reports and required mitigations.

The third domain specialises in financial crime. “We insource the know your customer of companies (mainly in financial services),” explains Hensen. “Key in this segment is that we focus on the complexity that requires more expertise – setting us apart from service providers that focus purely on operational matters,” adds Basu.

Beyond this, KPMG Managed Services also offers managed cyber detection and incident response as a service – helping clients prevent and act on cyber issues. Basu: “This goes further than a simple monitoring and quick fix, as we add ideation into risk management, with multidisciplinary KPMG professionals working to improve defences for future attacks.”

And finally, regulation based services – targeted most at public sector clients – looks to assist the implementation of change programmes at a governmental level. These services typically have a high sense of urgency, as well as longer durations – from six months to three years – meaning finding a trustworthy partner like KPMG can be crucial to saving time and money for public servants.

Partha Basu, Head of Managed Services, KPMG

Resource scarcity

Reflecting on the range of go-to-market solutions, Basu and Hensen believe that the portfolio addresses a few common trends unfolding in the market.

“There is an increasing complexity of regulations which clients have to navigate. Whether it’s from the Dutch government, European banking authorities, or the European Union. Due to this growing complexity, operational and financial risks are higher than in the past, with specific domain knowledge more important than ever,” said Basu.

While technology is touted by many as a silver bullet for process improvement driven by automation, “access to state-of-the-art technology is expensive and risky.”

“Mounting IT demands are distracting companies from their core tasks. Bank institutions need to take care of banking matters. Pharmaceutical firms want to focus on developing drugs. Things like customer due diligence, implementing cybersecurity protocols or regulatory risk reporting are not what they want to be doing – and the more time they spend on it, the less time they can develop and innovate their companies.”

“And not to forget the shortage of skilled resources,” adds Hensen. “Companies are struggling to attract the talent which can help them run their processes optimally, and are therefore increasingly looking outwards at partners for talent.”

Indeed, with 70% of business leaders considering talent availability to be their top concern in the coming months, outsourcing work to managed services providers has taken on an added importance.

This is where KPMG’s offering comes in. “We believe we have all the things in place to put in place a seamless delivery experience for our clients,” says Basu. “We’re basically telling our client: ‘take care of your area of expertise, and we’ll take care of the rest’.”

Hensen: “The model leads to cost reductions. Cost-wise and efficiency-wise, we can help our clients find important breathing room – especially in this challenging market. This also provides them with more room to add value to their own business model.”

In its delivery, KPMG works with a local to global approach. “With staff placed around the world, we can provide customer-facing services on a local basis, backing this up with managed services work which doesn’t really matter where you are – so it can be done by staff further away. In India we have over 20,000 people supporting our businesses worldwide, so finding the numbers to take care of work remotely is not an issue.”

“For more strategic or public sector work, we’ll do a lot more onshore or nearshore, because that work often requires understanding of local languages,” adds Basu.

According to the KPMG leader, this global interlinked network gives the firm a level of size and flexibility that places it among the “leaders in the market.”

Extending its own business

Meanwhile, internally, the extension of its own operating model means that KPMG can build more intimate and long-term relationships with clients, culminating into a stable recurring line of income – complementary to the more volatile fee nature of consulting work. Basu: “Adding managed services to our advisory business can make a real impact, both for our clients as well as for our own teams.”

The Dutch wing aims to mirror its managed services arm to those already successfully built in the the US and UK. “There KPMG is an established player in the scene. Over here in the Netherlands the potential is there, now it’s down to us!”