ey

Businessmodel of EY

Customer Segments

Ernst & Young has a mass market business model, with no significant differentiation between customers. The company targets its offerings at firms of all industries and sizes desiring assurance, tax, transaction, and advisory services.

Value Proposition

Ernst & Young offers one primary value proposition: brand/status.

The company has established a powerful brand as a result of its success. It is the third largest professional services firm in the world in terms of revenues ($28.7 billion in 2015), and is one of the “Big Four” audit firms (along with KPMG, Deloitte, and PwC). It has over 230,000 employees in more than 700 offices in 150 countries. Lastly, it has won many honors, including the following:

  • Recognition as one of Fortune’s 100 Best Companies to Work For (2016)
  • Recognition as Best Auditor (Funds and Tax) at Asian Investor’s Asset Management Awards for two years in a row (2016)
  • SAP Pinnacle Award* for Fastest Growing SAP Transformation Practice* (2015)
  • Stevie Award for Innovation of the Year – Business Service Industries category (2015)
  • Recognition as Best Thought Leader at the Wealth Briefing European Awards (2015)
  • Recognition as Financial Advisor of the Year by P3 Bulletin magazine (2015)
  • Recognition as Russia Transfer Pricing Firm of the Year at the European Tax Awards (2015)
  • Global Most Admired Knowledge Enterprise (MAKE) award 17 years in a row (2015)
  • Recognition as Best Financial Advisor by the National Award in Infrastructure in Russia (2014)
  • Recognition as the Best Management Consulting Firm in Australia by the BRW (Beaton Research +Consulting) Client Choice Awards (2014)
  • Recognition as Energy Advisory Firm of the Year by the Petroleum Economist (2014) ### Channels

Ernst & Young’s main channel for customer acquisition are the customer relationships of their partners. The company also promotes its offering through its social media pages and attendance at summits and conferences such as KM World, KMUK, KM Asia, the APQC KM conference, Enterprise Search Summit, and the Strategic and Competitive Intelligence Professionals Summit.

Customer Relationships

Ernst & Young’s customer relationship is primarily of a dedicated personal assistance nature. The company has its teams work closely with clients to solve their problems. That said, there is a self-service component. The company’s website has a “Library” section that includes self-help resources such as reports, newsletters, and white papers. The site also features a Client Portal where customers can manage the various aspects of their account.

Key Activities

Ernst & Young’s business model entails designing and providing problem-solving services for clients.

Key Partners

Ernst & Young forms strategic partnerships with other companies in order to provide customers with enhanced offerings. A high-profile example of such a relationship is its alliance with Microsoft Corporation in which it uses Microsoft’s cloud and data platforms to deliver new offerings. Examples of these solutions are as follows:

  • Jointly delivering business services using EY’s business/technology capabilities and Microsoft technologies, including purpose-led transformation and advanced program management
  • Combining EY expertise and Microsoft technologies to advance cybersecurity across industries
  • Implementing a range of enterprise products on Microsoft Azure, with EY collaborating with Microsoft Consulting Services
  • Using Azure-based applications to obtain near-term value from data and software that reside within clients‘ existing operations
  • Establishing co-innovation capabilities on various advanced management science applications and driving customers’ advantage from the “Internet of Things” ### Key Resources

Ernst & Young’s main resources are its human resources. Within its staff of over 230,000, it has a network of 800 thought leadership professionals operating across 40 countries who write publications such as reports and white papers. The firm also relies heavily on customer service staff to provide support.

Cost Structure

Ernst & Young has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of customer support and operations and administration, both fixed costs.

Revenue Streams

Ernst & Young has one revenue stream, the fees charged to its clients for its range of services. These fees vary by type of client and individual project.

Written on October 25, 2017