RSM’s vision is to be the first-choice advisor to middle market leaders globally. The middle market is a dynamic segment of the U.S. and global economy that comprises 40 percent of our nation’s gross domestic product and accounts for one-third of its jobs. Yet the middle market is often overlooked by policymakers and media because there is little publicly available data about these companies.
In 2015, RSM set out to change that when we introduced The Real Economy and the RSM US Middle Market Business Index, which are designed to provide a view into the challenges and opportunities facing middle market leaders. These publications expanded our forward-looking thought leadership that is helping to shine a light on the middle market and influence the conversation about what is important to these businesses.
In FY 2019, we added some exciting new products to our middle market thought leadership, including special reports on cybersecurity, capital expenditures and social responsibility, as well as our new The Real Economy Blog that provides daily economic insights. We launched our innovative RSM Industry Eminence Program, a leadership development platform designed to build robust analytics capabilities, forecast industry trends and understand the factors that are reshaping the ecosystems we serve. And we continued our focus on critical issues identified by the middle market leaders we serve, including tax reform, labor and workforce trends, evolving regulations and emerging technology.
RSM’s insights provide a robust platform for discussions with clients, media, policymakers and other stakeholders about the forces that are shaping the future of middle market businesses.
As we look ahead to FY 2020, we will continue to offer leading insights into the topics that matter the most to the middle market and the industries we serve.
Ensuring a consistent experience for clients
around the world
Middle market companies that are internationally active need a trusted advisor who understands how to help navigate the complexities of doing business globally. This advisor should:
- Understand local language and culture
- Leverage established relationships and a globally experienced workforce
- Possess multicountry technical expertise
- Offer effective global compliance solutions
- Tap into a worldwide organization that offers coverage in the world’s major markets
RSM is quickly becoming the premier first-choice advisor to middle market leaders globally. Our global focus informs highly personalized, relevant and seamless client experiences, regardless of time zones or international borders.
Global strength, local relationships
RSM is a member of RSM International, a leading global network of audit, tax and consulting firms focused on the middle market. Worldwide, RSM provides access to more than 41,000 professionals in 116 countries, with combined revenues of $5.4 billion. Globally, we share a singular purpose to deliver the power of being understood to clients, colleagues and communities through world-class audit, tax and consulting services.
Over the last year, we expanded our presence in Canada by adding three leading Alberta firms in Calgary, Red Deer and Edmonton, as well as launching our RSM Canada Alliance with three affiliated firms. RSMI also deepened our global presence in Argentina, Brazil, Canada, China, the Czech Republic, Germany, Norway, Spain, Switzerland, the United Kingdom and the United States. RSMI also established a new presence in Costa Rica, Cyprus and Mozambique.
Global insights tailored to your business
RSM continues to expand its unique middle market thought leadership platform to bring clarity to global economic, business and industry issues. Our chief economist, Joe Brusuelas, regularly meets with clients, policymakers and other leaders around the world to discuss middle market issues. Our premier publication, The Real Economy, is distributed to more than 4,500 clients globally as a resource for issues-based conversations. This year, its analysis focused on global topics such as Brexit and the impact of trade tensions and tariffs on middle market businesses.
Cohesive global compliance strategies
Our global compliance and reporting services expanded at a rapid pace in FY 2019, helping middle market clients manage complex and diverse regulatory requirements from country to country through a single engagement leader. Our proprietary Global Tracker system continues to evolve, giving clients a comprehensive view of their global compliance strategies.
Global capabilities that create consistent, high-quality client experiences
Our global methodologies ensure consistency and quality around the world. This includes leveraging best business practices and common development tools for all RSM firms to support a consistent RSM experience, and improve client satisfaction and retention. Our new global audit methodology is being rolled out in 2019. We also continue to expand service capabilities for middle market companies, with the most significant growth in the areas of global compliance, risk management, transaction support, information technology and cybersecurity.
Foreign direct investment expertise drives growth
We are quickly becoming a dominant firm for middle market foreign direct investors, leveraging our global business advisory capabilities and country specialists to provide critical support for flourishing inbound and outbound FDI activity. We currently serve more than 1,200 foreign-owned clients in the United States, one of the fastest-growing segments of our revenue.
Country specialists serve FDI CLIENTS and ease foreign market access
RSM’s country desks help clients resolve technical issues as well as navigate business, regulatory and cultural issues when entering new foreign markets. Based in the United States, these professionals provide answers and perspectives on both inbound and outbound business opportunities, and offer cross-border knowledge across our audit, tax and consulting services. We currently have dedicated desks for China, France, Germany, India, Ireland, Mexico, the Netherlands and the United Kingdom.
Globally focused development fosters global advisor talent
We created a global section of our career development framework and offer an evolving training curriculum to further align talent development with the broad and complex needs of our internationally active middle market clients. RSM’s global mobility program provides our professionals with real-world inbound and outbound experiences that build global advisor skills. Our global mobility program is a critical component of our global strategy, as it serves to strengthen our relationships within RSM International and provide a seamless experience for our internationally active clients.
- Long-term, multiyear expatriate assignments for experienced professionals provide depth and connectivity in host countries. Expatriates work closely with our country specialists and RSM International firms to meet with clients and ensure they receive the same high-quality RSM experience around the world.
- Short-term assignments provide resources and learning opportunities for experienced professionals to share regulatory and business practices in other countries. Staff assignments for junior professionals help deepen their international capabilities earlier in their careers.
Global alignment to deliver the power of being understood
RSM hosts world and regional conferences each year to stay informed, connected and actively focused on our middle market vision worldwide. At this year’s RSM World Conference, we showcased the transformative opportunities that innovative technologies offer middle market companies, and the ways we can optimize our global presence to drive middle market transformation in light of global risk, trade wars and the tax implications of the digital revolution.
“Our expertise, capabilities, deep talent and global presence ensure a consistent experience for our clients wherever they are doing business.”
Tom Ferreira, Partner and Global Executive Sponsor, RSM US LLP
Offering industry-specific insights and guidance
Understanding the challenges unique to a client’s industry is a key element of our service approach, and it’s what our clients have come to expect from RSM. FY 2019 was a year of breakthroughs as we enhanced our industry focus—and we’re just getting started.
Serving clients through industry communities
Our professionals begin focusing on specific industries early in their careers. By the time they are senior associates, the vast majority have declared one or two industries of focus. This serves to enrich our understanding of the industry-specific issues, challenges and opportunities middle market companies are facing.
In FY 2019, our clients endured changing rules, regulations and trade issues that had serious implications for their businesses. Tax reform, technology, and environmental, social and corporate governance practices, just to name a few issues, have changed the way companies and entire industries are doing business. It’s critical that we help our clients stay informed and up to date on these relevant issues.
To ensure we are achieving that goal, we are constantly developing new thought leadership addressing the most important issues in the industries we serve.
Industry thought leadership highlights
The RSM Industry Eminence Program
Our commitment to going to market with an industry perspective has led to some innovative ways to bring this to life. One such innovation is our RSM Industry Eminence Program. This cutting-edge program, created and led by Joe Brusuelas, RSM’s chief economist, and Kevin Depew, RSM’s deputy chief economist, began in May 2018 and gave 10 senior industry analysts the tools and training to understand, forecast and communicate the economic, business and technology trends shaping the industries RSM serves. In the last year, the inaugural class has helped the firm advise its clients on conditions affecting middle market companies.
The success of the first year has been overwhelmingly positive and, in May 2019, the firm announced a new class of industry analysts. This three-year rotational curriculum is a bold step forward as we continue to develop the industry leaders of the future.
“The Industry Eminence Program enables RSM to accelerate the evolution of our industry platform by offering robust trend forecasting and insights to our professionals across RSM, enabling them to have more meaningful and timely conversations with our clients.”
Don Lipari, National Industry Leader, RSM US LLP
In the coming year, our industry professionals will continue to work closely with our audit, tax and consulting practices to provide solutions that anticipate market changes and disruptors, enabling us to help our middle market clients successfully navigate whatever comes their way. In FY 2020, we will continue to expand training and development opportunities for our professionals to ensure they remain the middle market, industry-specific specialists our clients need.
Addressing strategic challenges for middle market businesses
Regulatory issues are at the forefront for middle market companies.
Audit: Navigating the challenges of new standards
This year marks the first time that public middle market businesses need to be compliant with the new lease accounting rules (ASC 842) and privately held businesses need to be compliant with the new revenue recognition rules (ASC 606). Both regulations represent a sea of changes for the affected businesses, and RSM has dedicated resource centers with a variety of learning tools—from articles and white papers to podcasts and webcasts—to help middle market companies navigate the challenges of implementing the standards.
RSM’s technical accounting consulting professionals help both public and private companies navigate these changes, and our technology consulting team collaborates with our technical accounting consulting practice on system selection and implementation of ASC 842. We have completed implementations, helped companies discover and understand key process improvement opportunities, and automated revenue recognition processes to prepare for the new ASC 606 guidance.
Realizing benefits beyond compliance
RSM helped Monotype Imaging Holdings, Inc., a digital typesetting and typeface design firm founded in 1887, discover new opportunities for its business during their ASC 606 implementation. Larry Penta, senior revenue manager at Monotype, said, “Going through this process allowed us to realize some improvements in how we price our products and services. The adoption of the standard essentially forced us to look at pricing because we needed to understand and analyze those pricing models to make sure that we could come up with an appropriate standalone selling price. So it really forced us into a thorough analysis of our pricing model.”
RSM professionals helped security solutions company Carbon Black develop and reinforce a revenue approach for ASC 606 to present to its external auditors. Company management wanted to determine if software licenses should be combined with the services provided to deliver key content. As a result, the company recognized ratability over time, rather than when the software itself was delivered. Derek DeStefano, Carbon Black’s director of revenue, said, “RSM helped us understand that we were not leveraging NetSuite the best way at the time for reallocating revenue elements. They were fantastic in helping us configure the system the right way, as well as transferring the knowledge they have acquired over time to help us understand the solution.”
Tax: Traversing a changing landscape
More than a year after it passed in December 2017, the Tax Cuts and Jobs Act continues to affect middle market companies as well as individuals, trusts and exempt organizations. It is crucial to understand how the new and still evolving tax environment will affect tax planning for this year and into the future. To that end, in the past year, we have been providing analysis and a range of resources to help companies and their stakeholders address tax compliance and planning:
- We continually update our tax reform resource center and provide sound tax planning advice to clients still trying to navigate the new tax law changes. In that same spirit, we joined with the U.S. Chamber of Commerce to publish a guide to the TCJA, giving business owners and shareholders an overview of key tax law changes and ways to maximize operational efficiency.
- As part of the TCJA, middle market businesses must evaluate doing business as an entity taxed for income tax purposes, as a C corporation, S corporation or partnership, as well as the investment incentives that qualified opportunity zones offer.
- The effects on the retail industry of the Wayfair decision on nexus obligations and navigating the complexity of a global tax landscape continue to be significant issues for businesses operating across state lines and country borders.
RSM helps business leaders address opportunities during industry events, such as the Tax Executives Institute conferences, as well as through RSM tax events and webcasts.
Consulting: Helping companies seize the future
One foreign regulation that affected all internationally active middle market companies last year was the European Union’s General Data Protection Regulation, or GDPR. While the law affects any company doing business with the EU, GDPR has prompted some U.S. states to enact data privacy laws themselves, such as the hotly anticipated California Consumer Privacy Act. The CCPA, which goes into effect Jan. 1, 2020, applies to any company that does business in the state of California or collects personally identifiable information from California residents.
In RSM’s 2019 Middle Market Business Index Cybersecurity Special Report, more than three-quarters of middle market executives reported that their organizations will likely have to comply with privacy legislation similar to GDPR at a state or federal level in the United States during the next two years; 93 percent indicated that preparing for emerging privacy legislation is a priority.
RSM’s cybersecurity challenges and risks resource center contains tools to help middle market executives understand this fast-moving regulatory landscape.
Enabling compliance on a global scale
RSM professionals created a top-to-bottom, proactive GDPR compliance program, working hand in hand with a leading European integrated water and coffee solutions provider. The RSM team collaborated with stakeholders to understand the company’s processes and what enhancements were needed to align with the GDPR. The RSM team ultimately established a comprehensive data-privacy foundation for the company, leveraging experienced resources in several countries to encourage GDPR compliance.
An RSM team worked with a global manufacturer that needed increased visibility to understand the effect of new and potential tariffs. The team created a reporting and analytics solution that connected to each of the company’s disparate ERP systems and aggregated sales across business units, enabling stakeholders to view high-level information in real time and drill down into specific regions and groups. The RSM team was able to use the data compiled from previous years and apply the tariffs to historical data, extrapolating the potential impact of future tariffs. The company could then evaluate the tariffs by business unit, market, division, location and other criteria with comprehensive dashboards to help evaluate where process changes could counteract existing, new and even potential tariffs on goods.
Internationally active middle market companies have been concerned with tariff and trade tensions between the United States and some of its largest trading partners. The companies most affected by tariffs have a domestic and international presence, and often have subsidiaries on multiple, disparate enterprise resource planning systems, which makes it difficult to produce meaningful analytics. RSM’s tariff resource center has insights on what middle market companies can do to stay ahead of rising prices and related supply chain issues.
Even as RSM consulting professionals help clients respond to new laws and regulations, they have also been active in helping clients proactively take advantage of opportunities. As noted in our survey of middle market companies, among the most important and promising of these is the digital transformation opportunity. From strengthening operations and enhancing customer relationships to creating better employee engagement, RSM continues to help companies leverage technology to keep pace with evolving customer and employee expectations.
Inspiring real innovation for the middle market
Solutions based on innovative thinking have always been a part of RSM’s heritage. As a business owner, Ira B. McGladrey, our firm’s founder, found ways to create jobs in his community during the Great Depression to help put people back to work. As an accountant, he championed original ideas that would come to define new accounting practice standards nationwide.
It’s this drive for real solutions, combined with our deep understanding of our clients’ needs, that helps our middle market clients capture a competitive edge.
Jeff Johannesen, RSM’s chief strategy and innovation officer, and a committed innovation team are leading a transformational effort to ensure that every RSM professional has a role to play in innovation for our firm, our communities and, most importantly, our clients.
Start with the power of being understood
“I would not consider being able to move forward without being able to look at the advice, the guidance, the leadership and indeed the mentorship of RSM.”
Michael Barrett, President and Chief Executive Officer, Gay Lea Foods Co-operative Limited
Gay Lea Foods and RSM have worked together for years. CEO Michael Barrett relies on RSM as the company’s first-choice advisor and doesn’t make a significant move without us—especially when it comes to innovative ways of implementing enterprise resource planning systems for their many acquisitions.
Real innovation starts with understanding a client’s biggest challenges. Only then do we work together to turn transformational ideas into reality.
The RSM technology experience
To help clients and RSM professionals demystify emerging technologies and develop a clear and cohesive technology road map, RSM recently opened the Technology Experience Center. Located in Denver, the center is a brick-and-mortar digital tech lab that offers hands-on access to more than 30 unique immersion experiences, including modern point-of-sale systems; touch-screen technology for a variety of applications; and wearable technology and mixed reality headsets to enhance communication and collaboration.
Just like our clients, RSM professionals use the center for strategy briefings, solution architecture design sessions, hackathons, proof of concept and training opportunities.
Create, contribute, support and promote
In December 2018, RSM launched the CEO Innovation Fund with $5 million and one objective: Anyone at any level at RSM can be an innovator.
Within weeks, 85 RSM professionals, from associates to partners, submitted dozens of ideas. So far, 17 have been approved to receive funding, including projects to improve productivity and cost efficiencies across the firm and development of hand-held, third-party application for asset inspection audits.
A new app called CLEARthru™, initially developed by RSM professionals, provides food and beverage clients with total food supply chain transparency. Through the CEO Innovation Fund, CLEARthru has received funding for expanded development and resource applications. Many more innovative submissions are being considered to determine their potential.
Powerhouse innovation partnerships
The startup ecosystem is an exciting space that feeds directly into the innovation and digital disruption the middle market faces every day. RSM collaborates with leading industry organizations such as Plug and Play, Microsoft and Automation Anywhere to accelerate transformational opportunities for our clients, including:
- Data analytics
- Optical character recognition
- Predictive analytics
- Robotics process automation
- Tax process automation
- Telecom cybersecurity
“RSM’s commitment to innovation is second to none.”