KPMG: Ignoring the HR Block Case Example or That Will Not Happen at the Exceptional KPMG

January 19, 2021

Here’s a fact of life at allegedly blue chip consulting and service firms. Miss those billability goal, and you are invited to find your future elsewhere.

I read “KPMG’s Marisa Ferrara Boston embraces Auditing Disruption with Watson.” My immediate reaction was id the capable, dutiful Marisa Ferrara Boston overlook this article in Beyond Search: “Watson and Block: Tax Preparation and Watson.” Probably. Business analysis from rural Kentucky is not on the KPMG list of suggested readings.

The point of my write up was in early 2017:

The idea is that H&R Block paid cash money to IBM to integrate Watson into the H&R Block proprietary tax preparation system.

The problem, based on information available to me, the Block Watson service added complexity to the tax workflow.

Oh, oh.

Here’s what KPMG has in mind:

KPMG has partnered with IBM to integrate Watson Discovery and Watson Machine Learning into the auditing workflow. KPMG uses Watson as a backbone to a question-answering pipeline for auditors and risk analysts, enabling KPMG audit professionals to better review, classify, and search across documents to extract important attribute values.

Interesting idea. Replace billable humans with super smart, reliable, fast IBM software.

What could go wrong?

If the Block IBM deal went nowhere, the resistance came from the tax professionals the system was supposed to help. Block and IBM parted company.

At KPMG, the litmus test will be billability. Unless the smart software generates more billable hours (regardless of how the bean counters fiddle the calculations), the KPMG IBM deal is likely to be found wanting. Nothing creates more waves in a blue chip professional services firm than a partner responsible for a number who misses his/her bonus. Nothing.

This quote from the IBM blog misses the point for a big time consulting firm. IBM writes:

“I feel really lucky to be able to be in a position where I’m still in the fight to be able to help push these things along,” says Marisa. But deployment is only half the battle. When it comes to maintaining innovation in automation over time, “it’s never over,” she says. “These AIs are living. They need to be nurtured in an appropriate environment. They’re not just something that you create and consider the job to be done. If so, you have failed, and probably in a very expensive way.”

Notice that employee revenue is not mentioned. Cost control is not mentioned. The partner bonuses are not mentioned. The ire of an unhappy KPMG client who is “surprised” is not mentioned. What about the managing partner who learns that a baby Enron or Autonomy has been birthed by the energetic Watson? Exciting? Yep. Very.

Perhaps some KPMG wizards who will find themselves working at HR Block will be able to ask their new colleagues, “What did you think of that IBM Watson integration?”

Stephen E Arnold, January 19, 2021


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