Can you give us a brief historical background of your company?
Ernst & Young was one of the first public accounting firms to start operations in Venezuela over fifty years ago. At that time it was primarily focused in serving energy companies, and, eventually, that little group of dedicated professionals grew and operations were expanded to provide accounting and auditing services to other companies operating in various industries. Ever since, the firm has been very successful and experienced considerable growth. As the market and the profession changed, the firm evolved and new service lines and different legal structures were incorporated to provide greater value to clients in compliance with local professional standards. During April 1995, we decided to further upgrade our strategy in response to emerging circumstances and, consequently, we performed a complete revamp, bottom up and top down, of all operations. It was a "dream come true" characterized by the adoption of improved people recruitment and retention processes, enhanced risk management policies, heavy investment in state of the art technologies, expanding our knowledge base and improving our go to market strategies, amongst others, in order to achieve the highest standard of value deliverable to our people and clients. So at the very start of Báez, Dasilva & Asociados, the Venezuelan member firm of Ernst & Young International, we focused our efforts primarily to serve the multinational clients of Ernst & Young and some of the most reputable local companies. Thus ever since inception, we have maintained a consistent growth pattern which has been about ten fold over the past six years. Looking back, I think we can all say we are proud that although it was a tremendous challenge going through the various changes in the global and local social, economical and political circumstances, we have been successful and, looking forward to the future, I am ready to bet that we will keep winning and enjoying professional and economic rewards.
Our strategy was based on two specific aspects. First and foremost, people, and our "people first" motto has become our primary vision of doing business. We are committed to help our people grow, both professionally and personally, as we are convinced that by doing so we will position ourselves to serve clients better. Second, we pride ourselves to be the trusted business advisors that provide the most value and confidence. We are geared toward and focused on serving the best and most reputable companies and even though during our early stages we were serving multinational companies for the most part, as of today we serve a large number of local companies. We really find ourselves in a position where we provide substantial advisory services to clients, particularly the national clients. Generally speaking, multinational companies have a well-defined set of strategies, methodologies and resources; what they need most is help in how to do business in Venezuela whether it is to remain incompliance with laws and regulations or to deal with business opportunities and threats. On the other hand, national companies have a greater need to access best practices worldwide and to develop innovative strategies to cope with either the local market or with the global market, whether they intend to compete with incoming investors or compete as an exporter or just to develop better structures, upgrade risk management or achieve better financing conditions. Providing those services, successfully, has been the most fulfilling reward for our partners and staff.
What would you say are your comparative advantages over KPMG or Arthur Andersen for instance?
I think we provide significant value and have a strong personal commitment to our clients. We are able to line up the right professional and technological resources to serve them, and they quickly find that their decision to use our firm was the right one. Ours is an organization of people committed to achieving professional success, where the younger generation knows that by providing value-added services to clients they will become partners some day, hopefully soon. Our firm has a reputation for its technology such that working in any of our Venezuelan offices is the same as working elsewhere in the US or Europe or Asia; we are totally interconnected with full access to all the knowledge bases of Ernst & Young, so it is very easy to download all the information we need to be helpful to clients: people, reputation, technology, commitment, resources are all our strong points.
What is your policy as far as training is concerned?
Our training is continuous. We provide anywhere from 2 to 3 weeks to new hires, thereafter, yearly, they move into training programs that could last anywhere from 1 week to 2 weeks, whether in Venezuela or abroad. As a matter of fact, over the past year we provided locally 2 or 3 seminars for professionals from other countries and vice versa, some of our professionals attended seminars overseas. So they are continuously being trained in the normal basics of the trade whether auditing standards or methodologies, accounting principles, financial advisory services, local or international taxes. At times we provide training on foreign professional standards because some of our clients are multinationals and they need financial reporting in those standards. We could say that on the average our people attend training programs anywhere from 60 to 80 hours annually. As a matter of fact there is a training program taking place right now in our classroom just two offices from here. It is a continuous task because it is the only way you can really be part of the world. What you learn today is almost obsolete a month from now. Moreover we have "intranet and computer based training" so our professionals can keep themselves updated regardless where they are located, office, home, overseas.
In addition to training in audit, tax and corporate finance methodologies, we train our people in specialized industries such as telecommunications, financial services, manufacturing, energy, etc. The business world is becoming increasingly specialized and our clients expect that the people working on their account will know their business.
I have been speaking about technical and business training, but we also provide training for our people in such personal skills as how to better present, how to conduct meetings more effectively, using their time more productively and other practical and personal skills that will enable them to advance in their careers.
I believe that every one of us needs to feel that we have the maximum opportunity to grow both personally and professionally. That is why our firm invests so much money, effort and resources in our training and development programs. When our people build skills and knowledge, they perform the best and our clients get the benefit.
Could you tell us who your customers are?
I would normally not mention which companies are clients of ours unless it is a matter of public record. In that regard, I may say that we have great pride in being the trusted business advisors of many of the most reputable national companies and of the Venezuelan subsidiaries of many of the largest and most innovative companies in the world. All that said, I am proud to mention that our clients include: British Petroleum; Compaq; Seguros Caracas, the Venezuelan subsidiary of Liberty Mutual; CANTV; Owens-Illinois; EMI Music; Seguros La Previsora; UNISYS; Ascensores Schindler; CADAFE; Chubb; Hewlett-Packard; Hilton; Bauxilum; Digitel; Sol Meliá; ABN-AMRO; Robert Bosch; SINCOR; Louis Vouitton; McDonald's; Balboa Records; Coca-Cola; Federal Mogul; Editorial Santillana; Auto Mundial; Venezuelan Superintendency of Banks; and HBO to name a few.
From that short list it is evident that we do serve very important clients operating in the most varied industries.
Do you provide a full package or are you in a position to provide full package services like the one-stop-window to any new comer?
We could, but then again we have some limitations with respect to consulting. The US SEC has new requirements requiring companies to disclose the level of audit and consulting fees provided by the same firm. Actually, there was an article very recently in the Wall Street Journal as to where companies stand in respect to fees paid to the Big Five or big hundred audit firms; in some cases, it shows that the audit fees are much smaller than the consulting fees provided and this is what has caused the SEC to question whether the auditors could be truly independent. Back in 1999, Ernst & Young chose to sell its consulting practice to Cap Gemini, one of the leading consulting firms in the world. It was a difficult decision as you can imagine, and having been part of the consulting ranks earlier in my career, I found it difficult to longer be in the same organization with many of my friends on the consulting side. But I think it was the right decision to take. I think it was a bold decision taken at the time it should have been taken. As a matter of fact, I think we were one of the very first to do so and ever since others have followed suit or are in the process of doing so.
| Aside from the information technology, yes we provide a whole spectrum of advisory services whether financial or tax advisory services. We also provide back office outsourcing services to non-audit clients. One of our outsourcing clients is a venture operating throughout South America, and we provide all the back office outsourcing for this organization in all its Latin American locations. I think it is one of the largest regional outsourcing services currently provided from Venezuela. We are also very active in the area of mergers and acquisitions as well as in providing internal audit services.
Though you are not providing a full package, you are however offering a complete package. Could you elaborate?
But even then, from the consulting end, Cap Gemini is Cap Gemini Ernst & Young and we have very close ties with them, so if our client needs consulting service, we can connect them with our former colleagues at Cap Gemini Ernst & Young. We can work together provided that each one does what each one can and should do. The acquisition I am currently working with could eventually involve Cap Gemini Ernst & Young consulting services in providing the acquirer all the operating infrastructure and strategy to successfully accomplish this major retail chain we are helping to get started.. Incidentally they could actually increase the operations ten- fold by doing this, and it is a national investor.
According to you, what is the overseas perception of Venezuela as an investment destination?
That is a very tough question to answer. I am going to say it from my heart and head. I do not think that Venezuela is always taking the right steps to make investors willing to invest in Venezuela. In today's world, whether you advertise in printed media, broadcast stations, Internet, and we have freedom of choice, you would notice that there are all sorts of visions as to what is going on. I do not think that at the end, the right message is going overseas. The right message that would make investors consider that this could be a land of opportunities- in every respect! The Venezuelan economy has mostly been oriented towards satisfying the oil industry needs, yet there is such an abundance of opportunities in other sectors. Now we are opening ourselves to telecommunications. Tourism is another area where we should be moving faster. In oil, once you find the oil and you are able to transport it to market - it is almost a done deal. In telecommunications once you have the signals and the satellites and the technology and obviously the market - it is also a done deal. In tourism: tourism is like marriage you have to work on it day by day. It is a service concept. Services are provided by people and people have to be trained and have to be motivated. Venezuelans are some of the most hospitable people I have ever seen, but our hospitality is that amongst friends, it is not the service business hospitality and if you want to develop a business you have to convert that natural hospitality into a profitable hospitality. The only way you can do that is by training and by way of proper selection. You will notice that whether you go to a hotel or to a restaurant the service levels are absolutely inconsistent. You might find in a highly advertised restaurant a foul service and in a small restaurant maybe managed by the owner and his family a superb service. Where will you repeat? To the place that you were welcomed and you were dealt with as somebody important to them. Now that conscience has to be developed and I do not think we have really worked on it. Sure, many hotels, resorts, beaches, airlines have developed, but one thing is to have the facilities and another thing is to have the abilities.
Where does the image of Baez, Dasilva & Asociados ( Ernst & Young) fit in to the image of Venezuela. How do you think you are perceived by outsiders and by the Venezuelan community?
I think that we are perceived as a firm with very high professional standards. I think we are respected by our people, our clients, our peers and other significant players such as those in academia. We have not been ultra aggressive in proclaiming an image; we have been low key. understand that quality has its price. In the end we would like to be consistently seen as the trusted business advisors that contributes the most to people and clients by providing value and confidence.
From a regional perspective, how do you see the future of the Latin, Central America and the US working together?
I think it is a very strong possibility. We are all Americans. Maybe now, we are not so new, but we still are the new world. I love to see ourselves, Americans, as pioneers in a lot of respects. Sure, we will drop the ball many times. I think it was Thomas Edison who said " I have not failed, I just found out that these materials are not good". So I think that we a have different approaches to life. I think that we have different cultures whether it is language, religion.. Then environmentally, most of Latin America is in the tropical zone and we do not have to face the hardships of winter. Just from that start- we must realize that we are in different environments, but still we have more things in common than we have differences. Of course you might say the US has all the technology and all the wealth. When you come to think of it, when you go to a little town in any mid-western state, I do not see much difference between that individual and the villager in any of our smaller towns, they have a lot in common. I think there is a lot of respect and admiration from both ends towards each other. When you start with that as your basis, respect and admiration, then you have what you need to build a good way of communicate; once you can communicate you can work together.
Ernst &Young has been excellent with its communication. " From Thought To Finish"- is this still your slogan worldwide?
Yes, and we think it will be for many years to come, even though I know it might change sometime and it will be for the better. We like this slogan it has really become part of our inner selves to accomplish things.
What final message would you address to our readers?
Our message is that we would be delighted to meet them and their challenges. We would welcome the opportunity to demonstrate to them our capabilities and the fact that we can really partner with them in achieving their strategic goals. With respect to Ernst & Young, I can tell you that I am proud of being part of this global family and of our people. It is just inconceivable to think that there is a challenge that we cannot overcome no matter how big it is. This brings me back to a very old Venezuelan saying: " El Venezolano es tan grande como el compromiso que se le presenta" (The Venezuelan is as big as the challenge he meets). I think that is, in fact, our own culture in this firm. We have proven it successfully. We started in 1995 with one client, today we have over 150 clients and we are doing over 800 different projects for those clients.
NOTE: Forbes Global/World Investment News Ltd cannot be held responsible for the content in unedited transcriptions. |
