KPMG International and Microsoft today announced two important strategic initiatives that will expand the scope of their global alliance: providing clients with a portfolio of digital solutions^[1], and enabling KPMG’s smart audit platform, KPMG Clara – both built on KPMG business experience and the Microsoft intelligent cloud.

The two organizations are establishing the Global Digital Solution Hub, which will leverage Microsoft Azure intelligent cloud services and artificial intelligence (AI) technology with KPMG business experience to help companies transform all areas of their businesses -- including finance, operations and the customer experience.

KPMG^[2] and Microsoft also announced plans to place the new KPMG smart audit platform, known as KPMG Clara, on Microsoft Azure, which will make KPMG the first of the Big Four professional services firms to enable its member firms to conduct external financial statement audits utilizing Azure, a comprehensive, cloud-based platform. Deployment across the KPMG network will depend on, among other things, applicable country regulations and any applicable engagement terms with companies audited by KPMG member firms. KPMG currently has 73,000 audit professionals worldwide and provides audit services for 23 percent of global Fortune 500 companies.

Of KPMG’s commitment to deliver KPMG Clara through Microsoft Azure, KPMG Global Chairman John Veihmeyer said: “As businesses become increasingly digitized and face continued disruption, audits need to continue to evolve with those changes and KPMG is committed to leading digital transformation in the professional services sector. Placing our smart audit platform on the Microsoft Azure cloud and leveraging other Microsoft technologies will accelerate and expand digital capabilities to further enhance quality, consistency and efficiency.”

Regarding the importance of the Digital Solution Hub to KPMG member firm non-audit clients around the world, Satya Nadella, Microsoft CEO, said: “As every industry and every organization becomes digitized, leaders are looking for the right technologies and partners to accelerate their transformation. Working with firms like KPMG, we aim to help customers harness the intelligent cloud and build AI capability to drive business outcomes and unlock new opportunities.”

Veihmeyer remarked: “The CEOs I talk to are looking for new types of digital solutions that combine the best technology with deep sector and business expertise. Creating a global Digital Solution Hub demonstrates our joint commitment to develop and deliver world-class, technology-led solutions that harness our combined business and technology expertise to transform their business. The technology solutions we develop will help clients optimize their operations, to build more efficient and sustainable digitally driven business to compete in an ever-changing world.”

KPMG Clara builds on KPMG’s deep global audit experience combined with the advanced security features and industry-leading compliance capability of Microsoft Azure to enhance audit quality and provide deeper insights into the results of audits, potentially highlighting specific issues and audit risks. The KPMG Clara platform’s standardized application programming interface (API) integration framework will support seamless integration with other cloud, data and analytics technologies.

“The future of audit for the digital, always-on age lies in providing services that one day likely will include real-time audits and continuous audit risk analyses. KPMG and Microsoft are working hard to move audit to the next level of digital transformation, leveraging Microsoft’s Azure cloud technology,” said Bill O’Mara, KPMG Global Head of Audit. “KPMG Clara on Azure will be a significant step toward the audit of the future.”

By applying Microsoft intelligent cloud capabilities such as Azure Machine Learning and Power BI (Business Intelligence) analytics to the full breadth of a client’s data, KPMG Clara can help bring more automation to the audit, reducing the burden on clients around data preparation and delivery. KPMG is committed to protecting client data, and this will only intensify with moving into cloud technology.

The Digital Solution Hub marks the most significant step forward for the KPMG and Microsoft strategic alliance formed in early 2015. The Digital Solution Hub will manage ideation, architecture and development of ready-made, Microsoft Cloud-based solutions, empowering the C-suite to drive digital transformation in strategic areas of their business.

The Hub will soon launch a portfolio of CFO solutions, and Procurement 365 Digital, a data and analytics-driven solution that aims to set a new standard for digital strategic procurement.

New solutions from the Hub intend to center on artificial intelligence, machine learning and analytics to help non-audit clients’ businesses improve performance, profitability and growth in the disruptive global economy. Operating as a geographically distributed facility, the Digital Solution Hub will have locations in the Seattle area, at the KPMG Lighthouse – Center of Excellence for Data & Analytics location in Berlin, and other yet-to-be-named satellite locations around the world.

The Hub will be staffed by data scientists, developers, analysts, designers and other specialists from both organizations. KPMG and Microsoft plan to begin operations by the fourth quarter of 2017. Further details about the Digital Solution Hub’s portfolio and client engagement opportunities will be shared at the Microsoft Envision conference in Orlando, Fla., in September.

In addition to the two initiatives announced today which build on the longstanding alliance between KPMG and Microsoft, KPMG recently received the following Microsoft awards:

• In early June, Microsoft announced that KPMG was a finalist for their annual Public Sector: Health partner of the year award.
• KPMG was among the best in cloud experiences in Microsoft Dynamics in the Horses for Sources (HfS) Blueprint Report: Microsoft Dynamics Services 2017 published on June 14th.
  
• At their July 10th partner recognition reception, Microsoft will name KPMG as their Worldwide Consulting & SI Digital Transformation in Action partner.
  

^[1]Solutions described herein may not be permissible for KPMG audit clients and their affiliates.
^[2]References to KPMG services in this document refer to service provided by KPMG International’s network of member firms.