International audit and consulting company Deloitte Touche Tohmatsu has taken the first step toward moving its global IT operations to Prague in the Czech Republic. Over the past year the company started migrating the running of one of its critical systems to the city, an application that ensures corporate funds in the global organization are not kept with any financial institution that Deloitte is auditing.
Bob van Nes, chief executive officer of Deloitte Central Europe, sees this as a first step towards moving most, if not all, of Deloitte’s IT operations from the U.S. and other locales to Prague, which offers the right mix of lower operational costs and skilled IT staff. IDG News Service spoke with van Nes during a recent visit to Riga, in Latvia.
IDGNS: What part of Deloitte’s IT operations are being run out of Prague at present?
van Nes: We have a system called GERS, which tracks the funds that senior managers hold for the company in various accounts, so that we don’t keep funds with our clients. That is against the rules. With 120,000 people in the organization, it is a huge amount of data that has to be updated on a daily basis. We are starting to bring parts of this system to Prague to see if we can run it from there. We are looking to when we can move the whole department in charge of this to Prague and run it with 100 people.
IDGNS: This is a proprietary system?
van Nes: Yes, GERS is an internal Deloitte system.
IDGNS: And it is to keep you from having funds on account with a client that you are auditing?
van Nes: Every year we are reviewed, the global organization has information from GERS and asks me to show my current status of funds. They check if we are still independent.
IDGNS: Where was GERS run from before it started moving to Prague?
van Nes: It was partly done by all countries and by Deloitte in the US. Then the U.S. people said, Why couldn’t we do it in a concentrated way from somewhere in Europe?
IDGNS: When was the decision made to concentrate in Prague?
van Nes: It was about a year ago, but there was the usual politics and coordination of policies. At the end of the day we are happy with the decision.
IDGNS: Will more of Deloitte’s IT operations be shifted to Prague?
van Nes: If we can really show the global environment — that is, Deloitte in the U.S. — that we can handle this, then why should they continue to run these expensive systems over there?
IDGNS: What other systems could be moved to Prague?
van Nes: We have no clear ideas about that yet. But if you want a spontaneous answer, I would say our database of guidelines and directives. We have a U.S. company running it for us now, but in the future we could run it in Europe or India. You need skilled people to [electronically] shelve all that documentation, but for the professional who needs to log in to look at it, it doesn’t matter where it is kept.
IDGNS: Why Prague?
van Nes: At some point you have to put your finger in the wind and say, why can’t we have this kind of development in our part of the world [Eastern Europe]? You also need to have people concentrated around universities and institutions of education. Why Prague? Prague is Central Europe. It is where we have a central office, and it is a good place to live and to attract [local] talent because of the cultural and educational attractiveness of the city.