EY isn't afraid of digital disruption; it's embracing it -- to the tune of $1 billion dollars.
The "Big Four" accounting firm -- which has 260,000 employees working in over 150 countries across the globe -- recently announced that it would invest $1 billion in "new technology solutions, client services, innovation and the EY ecosystem" over the next two fiscal years.
"I think the reason we're doing it is fundamentally based on something you already know -- the world is moving faster than it ever has before and that change is really pressing on companies to keep pace, particularly with regards to technology," said Jeff Wong, who joined EY in 2015 as the company's global chief innovation officer and helps oversee many of the company's new technology initiatives.
Wong, who worked in venture capital and spent a decade overseeing growth and innovation at eBay prior to EY, sees the investment not only as an opportunity to define what EY is in new and interesting ways, but also to define what the firm wants its industry to be like in five or 10 years. Redefining itself includes taking EY beyond its accounting roots and deeper into the realm of technology-driven enterprise-grade services, where it hopes to be a competitive force. In this new model, EY is often its own first customer.
"Clearly, the ambition of the investment size and scale we're making isn't just about us," Wong said. "We realized that our problems are similar to the enterprise-grade problems [other companies] face."
In part one of this three-part interview series, Wong talks about three of the top technology initiatives EY's $1 billion investment will help fund: data analytics, artificial intelligence and blockchain. And he lays out the steps the London-based firm is taking to be at the forefront of those technologies as they apply to the enterprise at large.
Editor's note: This interview on EY's investing in AI and other cutting-edge technologies has been edited for clarity and length.
What technology initiatives is EY investing in?
Jeff Wong: Naturally, at that size and scale of investment, we're looking at making investments across the board within EY. The three [technology initiatives] that I want to emphasize are data, artificial intelligence and blockchain.
Let's start with data then.
Wong: What is interesting when you look at data at EY is the amount and type of data that crosses our laptops and our computers every day. It's an extraordinary volume of data and it's an extraordinary type of data. We see financial information, transactional information, supply chain information and people information -- and we see it across every sector and every country in the world. We believe that type and scale of data gives us a unique opportunity to deliver very powerful and unique insights to the enterprise and to the working world. There are very few companies in the world that have access to the scale and type of information we have access to.
So, we're making an investment, of course, into our data as an asset: How do we think about it? How do we make sure we have it secure and we hold private the things that need to be held private? How do we make sure that, contractually, we have the correct rights to the different pieces of the data? How do we make sure we're using this in an honest and powerful way, but also a way that honors the trust that our clients have given us?
So, we're making a big investment in [our data] from the technology perspective, but also from the concept perspective -- making sure we maintain the trust with the organizations who have entrusted us with this amazing type and amount of data that we have from them.
Applying AI to lease contracts
Why is EY investing in AI?
Wong: If we have this type and scale of data, one would imagine our investment in artificial intelligence should match. Artificial intelligence is obviously -- or we believe it to be -- one of the most important technologies of this next generation. We believe we can be the leaders in artificial intelligence as it applies to the enterprise.
Jeff Wongglobal chief innovation officer, EY
Where we think we have an advantage -- and we are investing differentially in -- is asking: How does artificial intelligence apply to the enterprise? How can artificial intelligence help us and help our clients make better business decisions in the world? A very simple example -- one of many examples -- is our use of artificial intelligence to help us read lease contracts. [EY is] responsible for reading and characterizing hundreds of millions of pages of these types of contracts on behalf of our clients around the world. It takes us hours and hours to read these lease contracts, each numbering in the hundreds of pages.
We decided we should apply artificial intelligence to help our people read these contracts. In the first 90 days of our application of the technology -- in the pilot phase -- we were 200% to 300% better on all the relevant metrics in terms of 'reading these contacts' than we were using the current process. We're about to take that pilot project and roll it out into the world as a true beta product. We're now looking at reading all sorts of different types of contracts and all different types of business documents. This is the first stage for us in terms of heading toward that goal of being the leader in how AI applies to the enterprise.
Blockchain beyond bitcoin
So, it appears that investing in AI could pay big dividends -- why invest in blockchain?
Wong: We find blockchain to be one of the most interesting new technologies out there. We believe that, over time, it will have a significant impact on the working world and we think it's growing in its influence and possibilities every day. We also recognize that blockchain in its original form was developed to support cryptocurrencies, and that's a different environment, different use case and different purpose than for the enterprise. Our goal is to be an important part of the evolution of blockchain as it applies to the enterprise. We want to take this technology originally built for the cryptocurrencies and we want to make it useful for the enterprise.
Do you have a blockchain project?
Wong: We recently announced that we built the blockchain for Microsoft's gaming business. Whenever somebody buys a game, lots of different people need to get paid -- the publisher of the game, the developers and all the parties associated with how the purchase of the game happens. Historically, this has been done in a very complex web of databases and spreadsheets. As you can imagine, disputes would arise around, 'Wait, what did you sell? So, you owe me this much versus that much?' So, we built a blockchain to run this process. At full scale, it will be at 3,000 partners and 2 million transactions a day. We just recently launched it, but we believe when it hits full scale, it will be the largest blockchain by transaction volume ever.
How does it work?
Wong: What we did was we created a network where, when a transaction happens, the fact that that transaction happened is immediately viewable by the entire network. Everyone can say, 'Yes, a copy of that game was sold, therefore, all of these players need to be paid.' The logic of the contracts themselves -- how much people need to be paid, at what time and what on what terms -- is built into the blockchain itself. So, instead of this old resolution process of figuring out who owes who what and looking at multiple databases that don't all fit together, we have a single, very secure and very private blockchain that allows this network to communicate together and creates an incredible amount of efficiency throughout the system. It makes it easier for the trading partners to work together.
It also does things like loops in the data from the blockchain directly into people's ERP systems so that their current methods of doing things works with the modern method of doing things. That's what we mean when we say we're making investments to be the leaders in terms of how blockchain applies to enterprise-grade solutions.