On 22 February 2021, KPMG in Central Asia celebrated 25 years of its operations in Kazakhstan. In the anniversary interview, Saken Zhumashev, Managing Partner of KPMG in Central Asia, spoke about how businesses should use their own intellectual potential, with what assets the firm approaches the anniversary and how to support corporate culture in the pandemic era.
KPMG in Central Asia is part of the international network of KPMG firms – a Big Four firm providing audit, tax and advisory services. In 1996, KPMG first entered the market of Kazakhstan: then the global office of the firm, together with its local partner Janat Berdalina, opened the first branch in Almaty. A few years later, offices in Tashkent and Bishkek began their operations. Thus began the history of the establishment and further development of the practice. Over the past 25 years, the firm has actively adapted to the local market, mentality, business specifics, won new clients, and today it is rightfully competing with other Big Four firms for the first place in Central Asia, constantly expanding the range of services and helping its clients become even more efficient. Today, KPMG in Central Asia brings together more than 720 talented, creative, ambitious people – professionals of the international level.
The journey to the 25th anniversary
KPMG in Central Asia is a single pool of resources uniting subdivisions in Kazakhstan, Kyrgyzstan and Uzbekistan. Over 25 years, the practice in Kazakhstan has grown from 20 to 620 people, about 30 people work in Kyrgyzstan. A few years after the opening of the office in Uzbekistan, its operations had to be suspended – the economy became more closed and did not quite allow business to be conducted "to the full extent." The office in Tashkent, where more than 90 people work today, reopened two years ago – and since then the KPMG team has managed to resume the provision of the full range of services.
The value of this extensive and complex work is that companies have begun to better understand their own economic activities, and enterprises in the oil and gas sector, mining, smelting and extractive industries have clarified many issues related to the tax code.
"In 1996, KPMG in Kazakhstan offered audit of financial statements as one of its main services. We approached companies and helped them to form an accurate picture of their financial condition. At the same time, tax advisory services were also developing. The value of this extensive and complex work is that companies have begun to better understand their own economic activities, and enterprises in the oil and gas sector, mining, smelting and extractive industries have clarified many issues related to the tax code,” Saken Zhumashev says.
So KPMG became a driver that brings financial literacy to business at the level of large enterprises and entire countries. The firm's experts have worked hard to ensure that today any Kazakhstani CEO reads the financial statements and understands the meaning of all indicators. The firm conducts such work in Uzbekistan and Turkmenistan where local accounting standards are still used. The transition to the IFRS in the near future will be vital for local businesses, in particular, for successful cooperation with investors.
Consulting became the next evolutionary element in 2005-2008. KPMG started helping market participants improve business processes by providing recommendations based on the analysis performed. This area developed most rapidly, and today the firm's assets include unique methodologies for introducing innovations and information technologies.
Over these 25 years, the firm has achieved a lot, but even more awaits in the future.
"When I joined the firm, KPMG was not the largest one among the Big Four firms, but over the past 12 years it has made a tremendous leap forward," Saken Zhumashev is sure. “If we draw an analogy with the age of a person, today we understand exactly what we want from the market and where we will move in the coming years. We have reached maturity, but we have not yet reached the maximum point of growth. I would compare KPMG to a young athlete who is well prepared for the main start. There are still many kilometers ahead.”
About the firm’s services
The KPMG umbrella encompasses a significant portfolio of services that allow implementing comprehensive projects on a turnkey basis.
"This means that our clients no longer need additional expertise, third-party specialists in IT technologies, finance, taxes or training of the necessary personnel – we already have all these experts. This is our main advantage in the market”, Saken Zhumashev says.
Our clients no longer need additional expertise, third-party specialists in IT technologies, finance, taxes or training of the necessary personnel – we already have all these experts. This is our main advantage in the market.
KPMG services are represented by four key areas. The first one is audit, the firm’s main service provided according to the International Financial Reporting Standards. The second one is consulting which includes, among other things, the introduction of Digital CFO systems that help manage financial activities within an enterprise.
"It is difficult to imagine the contemporary world without technologies, and the speed of their updating is extremely high. In order to keep up with the dynamics of the ongoing changes companies and industries need innovations more than ever. And this is when we come to the rescue, helping our clients move forward, optimize and automate business processes, recruit and train new personnel,” Saken Zhumashev adds.
The third area of KPMG’s services in line but not in terms of its importance is the provision of tax and legal services. The tax code can be interpreted in different ways, and our specialists help to translate it into a simple language and find optimal options of its application. The general improvement in the legal literacy of the population and the business community increases the importance of understanding and interpreting laws. KPMG's legal team helps clients lay the right foundation in any contract or legislative act to avoid potential risks in the future.
M&A deals, i.e. mergers and acquisitions, are the fourth area of KPMG's services. Experts evaluate companies based on financial indicators and reporting, assets and liabilities, help sell them to other players or potential investors, and also find these investors worldwide. As a guide, KPMG also helps to acquire suitable assets to expand the companies’ portfolio.
The pre-IPO business valuation service is now particularly popular in Kazakhstan – many public and private companies are considering it. KPMG experts clearly understand how to build this process, which in the absence of a professional approach can take years of painstaking work.
"I want to emphasize the relevance of two KPMG services during the pandemic period," Saken Zhumashev says. “The first one is finding strategic partners and support of M&A deals. This service is helpful to companies experiencing difficulties after attracting financing in a foreign currency, or a business that needed a private investor. The second service I would point out concerns innovations. Today the business world is well described with a quote from Lewis Carroll: "It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” We help companies quickly introduce new products in order to work and develop effectively."
Of course, the pandemic has seriously affected the economy. But according to the Managing Partner, the business as a whole has adapted to the new reality.
"Global companies have learned the coronacrisis lessons well," the Managing Partner of KPMG in Central Asia notes. “For example, today, business not related to production is rapidly reducing expenses associated with office premises. Also, the lockdown has caused us to increase efficiency through videoconferencing from anywhere in the world. Even this aspect – one of many – will significantly change the foundations of business for the coming years. Regardless of the situation in the future, we will probably continue to work in the new online format. This will allow appreciating and paying not for man-hours in the office, but for the result of work. The future belongs to those employees who can consciously approach a task and provide deliverables wherever he or she is."
KPMG will probably continue to work in the new online format. This will allow appreciating and paying not for man-hours in the office, but for the result of work. The future belongs to those employees who can consciously approach a task and provide deliverables wherever they are.
Saken Zhumashev calls digitalization of processes another valuable consequence of the pandemic. Many banks are developing the client digital sector: technologies are becoming simpler and cheaper, and people – generation Y, X and Z - want to receive services in the online format. The world will no longer be the same.
"After the lockdown, I can confidently say that KPMG was ready to switch to the remote format of work. Our experts have always been mobile during many years of project work. Of course, I had concerns about the format of interaction with clients and the preservation of the corporate culture. However, the performance report for March – December 2020 showed that we quickly and almost painlessly switched to the new model. Our fundamental principle of meritocracy was helpful here – in order to join us, it is often not enough to be just an excellent specialist in your area. We recruit conscious and talented people into our unique team,” Zhumashev notes.
About the corporate culture
The principle of meritocracy partially explains the success of Saken himself, who became a living example of the effectiveness of this approach.
"I joined KPMG in 2008 in a basic position, five years later I became a partner, three years later I became the head the consulting division, and in December 2018 I became the Managing Partner. At KPMG, you become a leader not because of seniority or kinship – only your result works for you. Twice a year we conduct a performance review by service lines, such a model does not allow an unmotivated and unqualified employee to remain unnoticed or keep his/her position. Go up or out – you are either constantly growing or leaving,” the Managing Partner of the firm says.
KPMG specialists’ responsibility is hard to overestimate, so human capital is considered the main value here, and improving the employees’ comfort is the focal point. The innovation team created for these purposes continuously tracks new work optimization tools. Significant attention is paid to the development of soft skills, and work on emotional intelligence – so that managers are able to communicate correctly and motivate their subordinates.
"We have a family environment, however every family member exactly knows the list of his/her duties, where to move and based on what principles. I will tell young people who are considering whether to join a Big Four firm: do not be afraid to roll up your sleeves and work. During the first years in the firm, you will considerably replenish your knowledge, see university theories in practice and decide whether to continue working here, go to the corporate sector or become an entrepreneur. All acquired skills will remain with you and will be helpful in the future. The KPMG school of life teaches you to effectively find non-standard solutions to any challenge while changing stereotypes about doing business,” the head of KPMG in Central Asia adds.
Many efforts in the firm are also devoted to wellbeing projects that help employees switch their attention from business processes. During the COVID-19 period, for example, a winter marathon and training sessions on overcoming difficulties were held, and yoga classes are held in the firm's offices in the morning. Saken Zhumashev is not a stranger to sports either, but he admits that it was not always possible to combine it with his career.
The KPMG school of life teaches you to effectively find non-standard solutions to any challenge while changing stereotypes about doing business.
"For the first eight years of work at KPMG I did not have time to do sports – the workload and responsibility constantly grew and, frankly, the young body did not need regular training much. Today I have no less work – it’s just that the approach to organizing the daily routine has changed significantly. Planning for a few weeks ahead and, of course, digital technologies help me a lot in this. I recommend that young specialists spend 90% of their energy on work, education and searching for a partner in life, and 10% – on hobbies and pursuits. I believe that for employees over 30 years old it is just vital and absolutely essential to find time to do sports. Good physical fitness will only contribute to your productivity. I resumed sports activities when I was 33 years old, and today I run marathons, swim, ride a bicycle, I love active recreation,” Saken Zhumashev notes.
I recommend that young specialists spend 90% of their energy on work, education and searching for a partner in life, and 10% on hobbies and pursuits. For employees over 30 years old it is just vital to find time to do sports. Good physical fitness will only contribute to your productivity.
About charity and results
KPMG is, of course, a socially responsible firm. The environment in the broadest sense, according to Saken Zhumashev, is very important for an international company – after all each of them is part of the global ecosystem.
"In addition to our main work, we are implementing various social projects. During the pandemic, at KPMG we added the item "Planet" to the list of our postulates and are now contributing to the conservation and development of the Earth's ecosystem. We also do charity work in the traditional form - plant trees, go to volunteer clean-up events, give New Year's presents to children from orphan boarding schools, visually and physically impaired people. Each employee, to the best of his or her abilities, participates in our projects – for example, you can prepare master classes for schoolchildren that clearly explain the basic rules of safe behavior on the Internet,” Saken Zhumashev comments.
We can say with confidence that in Kazakhstan the future is being created every day with the hands of KPMG specialists. Each project of the firm has a positive impact on the development of the country and the region. This applies both to projects on reforms and tariff setting, and to the search for financing of the construction of new roads.
We can say with confidence that in Kazakhstan the future is being created every day with the hands of KPMG specialists. Each project of the firm has a positive impact on the development of the country and the region.
"By our 25th anniversary, we have written only the first chapter of the history of KPMG in Central Asia. There are still many chapters ahead, many new achievements. Today, our main goal is to increase the number of significant projects that improve the life of the region. So that the information systems that we implement make our clients more efficient. So that companies can earn more and, accordingly, pay more taxes to the country's budget. KPMG employees make our professional environment better and more comfortable every day. This is necessary, among other things, for our children to want to live, work and develop in our region,” Saken Zhumashev, Managing Partner of KPMG in Central Asia sums up.