Aalto University: Students Undertake Project on Workload Distribution and Profit Optimization

In a groundbreaking effort to enhance profitability and resource planning in the field of auditing, Thuy Pham and Niko Ollila, students from Business Analytics and Finance programs, collaborated to deliver remarkable results in Workload Distribution & Profit Optimization project. Its innovative initiative is set to modernize traditional audit practices and maximize resource utilization. The project was supervised by Postdoctoral researcher Anila Kiran from the Department of Accounting.

KPMG is a professional service company and one of the Big4 audit and advisory firms. The Company employs 265,000 people globally and operates in 143 countries and territories.

Harnessing Advanced Technologies

The Project, which commenced in April 2023, sought to address the challenges faced by audit firms in managing complex workloads while ensuring stringent quality control measures. By harnessing cutting-edge technologies and implementing advanced data analytics techniques, the project aimed to investigate and assess the possibility and impact of modifying audit timeframe of a certain client group. The aim was to rebalance the workload across months in a year and identify the optimal audit team structure for specific client groups to improve profits.

One significant achievement of the project was the development of an innovative impact assessment technique. This tool effectively visualizes the overtime costs that arise when altering client lists. Utilizing machine learning and in-depth historical data analysis, the students pioneered an algorithm. This cutting-edge algorithm recalculates workloads based on standard working hours and the demands of each client per employee.

‘Being a researcher in the field of auditing, the opportunity to closely examine KPMG’s internal data and gain intriguing insights into the composition of audit teams and the distribution of workload was eye opening. The data not only validated numerous assumptions prevalent in audit literature but also yielded noteworthy findings, particularly concerning team distribution and profit maximization, a correlation that echoes findings in academic research. The resonance between the findings from KPMG’s internal data and existing academic research offers a harmonious blend of theoretical insights and practical applicability,’ says Anila Kiran.

Integrating statistical analysis to furnish recommendations

One of the revelations from the project was the variance in impact on the gross margin at different employee levels, contingent on the number of auditors engaged. This pivotal insight offers KPMG’s planning team a foundation to determine the most suitable team structures according to client specifics.

‘We were very impressed by the findings from Aalto students and their competencies expressed in the project. Some results are consistent with our knowledge, and some came to us as a surprise. This will give us more insights to allocate audit resources for optimizing profits,’ says Kim Järvi, KPMG audit partner.

The Power of Data Analytics 

The implementation of advanced data analytics tools played a pivotal role in the project’s success. By leveraging data visualization and descriptive modeling techniques, the students were able to identify patterns, detect anomalies, and gain valuable insights from vast volumes of audit data. This data-driven approach enabled a deeper understanding of client-specific requirements, enhanced the precision of workload projections, and informed evidence-based strategic planning.

‘Being part of this project was a deep dive into the real-world applications of data analytics. Using theoretical knowledge and applying it to practical scenarios with real audit data provided both challenges and insights. The process of analyzing, interpreting, and collaborating with seasoned professionals enriched my understanding and highlighted the crucial role of data analytics in shaping well-informed decisions in today’s business world,’ says Niko Ollila.

Throughout the project, KPMG was actively involved in providing feedback and directions for deep-dive analyses. Their valuable insights and suggestions allowed for continuous improvement and customization, ensuring that the optimization solutions were tailored to the specific needs of the audit firm.