Mazars’ managing Partner, Owen Koimburi explains why mergers are a proven strategy in upscaling clientele base and geographic reach.
By DERRICK VIKIRU
Business growth can be rewarding, challenging or even bewildering. This is the process which start-ups, most in need of growth, usually go through before they can finally break the wave of uncertainty and gain a market share. Most of them are usually too busy to pause and plan for growth. Growth in business can be elusive if there are no deliberate strategies to foster it. However, the narrative for Mr Owen Koimburi is so different that it almost seems scripted. The present-day Managing Partner – the most coveted position for accounting professionals – at Mazars Kenya is a sharp and brilliant mind who transformed his business formally known as Koimburi and Associate through mergers into a now global force in auditing and financial advisory. Speaking to Management Magazine at his office on the West wing of Green House mall on Ngong road, Koimburi details to us the grueling journey of establishing and running an auditing firm in a harshly competitive market like Kenya.
“The market is competitive, and clients are looking for more value addition just beyond the traditional financial reporting role of audit firms. Thus, as a financial advisory firm, we provide an essential service to the capital markets especially through promoting integrity in financial reporting and building a basis for confidence in our clients,” he notes.
There are many new entrants in all business sectors in the Kenyan market with global foothold, and this has not only created demand for audit and tax advisory services but also stiff competition among service providers. These market forces, Koimburi notes, are what made him seek growth beyond his local clientele base. He had the vision to grow a business that will outlive him and whose impact would be felt globally. He admits that scaling up internationally is not easy without forming partnerships and mergers. The main challenge in achieving this is the lack of a succession plan. He notes that getting a partner who has the knowledge, experience, expertise and reputation is the best way to ensure continuity of your business. This is what led KOKA Koimburi & Company to merge with Mazars Certified Public Accountants (Kenya), a French auditing firm with a physical presence in 89 countries and a foothold in all the continents.
“The businesses that we deal with have a global reach, be it in manufacturing, retail or service industry. Thus, they want to deal with a firm that has a global appeal and subscribes to international best practice. We are able to achieve that through our partnership with Mazars,” he says.
He goes on to add that mergers and acquisitions with international players is a common practice in this industry and have become a viable succession planning strategy for accountants looking for growth of their practice and clientele or even those who are looking towards retirement. Koimburi advises more mergers among accounting firms in Kenya. He says that the Institute of Certified Public Accountants of Kenya (ICPAK) has over 600 registered audit firms and many are small players. “Due to the tough market conditions and the need for geographic expansion, mid-sized accounting firms should aim to acquire/merge with smaller firms with the aim of achieving their growth targets,” he advises.
He prides in the growth of the firm and diversification of their traditional roles. He says that they currently employ over 60 professionals. They also provide a full range of assurance, taxation and advisory services in the areas of information technology, business development, corporate strategy and human resources.
Impact of technology in financial reporting
Market forces institute change in any institution in any industry. Koimburi notes that with the advancements in technology, there has been a major shift on how accounting firms are managed and run. Technologies such as data analytics, Artificial Intelligence, machine learning, and even blockchain have stirred up transformation in the accounting profession and practice. He says that there is constant need for them to recruit people with new skills and train their staff to perform more analytical services, use new billing models, and provide advisory and strategic thinking services. A global survey done by Sage that sampled 1,000 accountants as respondents found that 83 per cent of respondents said that clients are already asking for more services and 42 per cent of clients expect their accountant to provide business advisory services, over and above accounting, compliance, and tax services.
Challenges in the market
When asked about the challenges he has faced along the way, Koimburi emphasises the staffing challenge. He notes that there is a mismatch with what learning institutions are training and the skills the workplace requires. This therefore calls for education stakeholders to study the skill-gap in Kenya and bridge through modern day training. He also laments of the overregulation of the industry that does not afford all players a level playing field, hence unhealthy competition. Cases of lack of integrity brought about through corruption and flaunting of international best practices have also played a great role in hampering growth of business.
Koimburi lauds Mazers as the most transparent accounting firm through its accountability policy to the public. The firm publicises its consolidated financial accounts, a practice that is seemingly unusual especially for private audit firms.
Derrick Vikiru is the sub-editor Management Magazine. Email: firstname.lastname@example.org