Ask the Expert: Hitachi Consulting

 Jonathan Gray of Hitachi Consulting speaks to ITM about the consultancy services they offer, how the market has changed and his business predictions for the future

Tell us about Hitachi Consulting and your role there.

I joined what was then known as Cambridge Management Consulting in 2001 and subsequently renamed to Celerant Consulting, a ‘pure-play’ business operations consultancy. Two years ago Celerant was acquired by Hitachi Consulting, so I’m relatively new to the company as it is now. When we were acquired by Hitachi we brought with us deep industry expertise and a wealth of operations consulting experience, which were closely aligned with Hitachi Consulting’s management consulting and IT consulting capabilities. Hitachi Consulting is the global management consulting and IT services business of Hitachi Ltd., and we focus on delivering high value, sustainable results and investing in long-term client relationships. In my role today, I’m responsible for delivery across the industrial sector in EMEA. This includes leading client engagements directly, where I focus on Operational Excellence, Supply Chain Transformation and Operational Strategy whilst securing best practice across all our engagements in the sector. In addition, I bring together our combined capabilities to develop thought leadership, provide practical industry advice and architect tailored offerings for our clients.

What services do Hitachi Consulting offer?

Hitachi Consulting leverages 25 years of management consulting, extensive industry expertise and leading edge technology experience. What we, as Hitachi Consulting, bring to the table is what we call ‘business operations consulting’, encompassing business analysis, operations strategy, and then implementation. Big consulting firms hold the corporate strategy space, but we excel at operationalising/implementing that corporate strategy. Hitachi Consulting also offers technology consulting over all of the major platforms (including Oracle, SAP & Microsoft); we provide IT advisory, systems integration, custom development and managed services. Hitachi Consulting is an integral part of the Hitachi Group, which gives us a unique advantage among consulting firms. We draw on Hitachi Ltd.’s powerful corporate parentage, as it has quite a big name in industrials, operating in various sectors with extensive research, development and technology capabilities. Currently, we are in the process of developing offerings where we can leverage all of those capabilities, and we have a very exciting future ahead of us.

Do people still see Hitachi from a technology or manufacturing perspective rather than a consultancy one?

It depends where you ask the question. In Asia the name is definitely synonymous with manufacturing. In America we’re more known for consulting; in Europe and the Middle East, less so. When you look at the Hitachi brand a lot of people think about technology expertise. Hitachi is very well established there, but it is not the only area of the market. Over the last ten years, Hitachi Consulting developed its European presence in three countries (UK, Spain and Portugal) and with the acquisition of Celerant we now have offices in all major European countries, and are enhancing our brand awareness across Europe.

Who in particular are you trying to target – is it SMEs, manufacturers, or the whole industry?

Today our client base spans across 13 industries with a strong focus in chemicals/life sciences, industrials, consumer, energy/utilities, transportation and high tech. We have a huge breadth of capability in the organisation and we can work across the entire value chain. From an operational consulting perspective, we focus on operational excellence, supply chain transformation, innovation and engineering, sales and service – the core of any company. A lot of our business is large enterprise corporations. We work less with the S part of SMEs, but medium-sized businesses are definitely a big part of what we do. Where we start to really add value to a company is around the €500m revenue-and-up mark.

Would it be fair to say that the supply chain is becoming more esoteric and consultative nowadays, especially as it continues to shift online?
I think it depends on what side of the industry you’re on. In the consumer industry it is definitely much more prevalent. On the B2B side it is still very physical, but I think there are many more channels than before, and many of them are online. It’s more important and relevant to the consumer side as you will do a lot more business through those sorts of channels.

Do you offer an entire end-to-end 3PL service?

Hitachi Consulting does not, but Hitachi Transport Systems, a Hitachi Consulting sister company, does. However, our consultancy services provide support to our clients irrespective of the provider they use, whilst leveraging our own knowledge and capability

Where do you do most of your business?

In terms of EMEA, we have a very strong presence in Europe, more so than the Middle East, which we are continually learning about. North and South America are strong for us, as is Asia. We have always had a strong footprint in Japan, where Hitachi is based. In the last few years we’ve been growing in India and China. Hitachi Consulting is truly global. Over the two years as the combined business we now have equal strength in all the regions. We help our clients where the challenge is, anywhere around the globe.

Talk us through your approach to consulting.

What we do is bring deep industry expertise into every part of our business. That’s very key to our offering – we look to offer tailored expertise to every individual market and sector that we’re operating in. Our consultants understand the context of the companies and individuals we work with – they have experience operating within industry and consulting, which adds real value to what we do. Our approach to consulting is value-based, so we always talk about delivering tangible business benefits. Our success is based on us being able to go to a client, run a short piece of analysis work at the start and then look at the real challenges facing the business and what we can do to help them. Then we can build a strong case for change, develop a project definition with the client and gain a clear vision of what success looks like. That is a very discrete stage of our operations and is designed to set the company up for a real and tangible change. At that point we are able to commit to delivering results, and going forward we help the client to put our advice into practice. Because a lot of our work is based on knowledge transfer, we gradually pull out and encourage the client to stand on their own two feet to ensure they have developed the competencies they need for the results to be sustainable and for continuous improvement. We work top-down, bottom-up and end-to-end with our clients, implementing practical operational strategies and technology solutions that deliver measurable and long-lasting business value with all levels of the organisation.

Is there a sector you do more business with?

The industrial sector as a whole is very big for us, and that’s very wide. The consumer market (or FMCG, depending on what language you use) has always been, and will remain, a very strong area as well. Oil and gas companies, including other energy related organisations, have also been strong, as has the chemical sector. From there, we can look at the burgeoning industries, such as transport, financial services, healthcare and infrastructure which we are continuing to expand.

How has the business landscape changed over recent years?

We are all seeing a shift towards emerging markets, and a lot of organisations are beginning to expand into these new markets. What that has created for a lot of mature companies is a growth in cost base, and a struggle to manage a newly global organisation. The challenge is not just managing this expansion, but predicting how it is going to change in the future. Macroeconomics around the world are extremely volatile, so companies find themselves investing a lot of money and putting a plan in place with a certain direction in mind, only to find this may not be as set in stone as originally imagined.

Premium established brands are not feeling the pressure as much as others from the emerging brands in emerging markets. Look at automotive manufacturers, for example: The German brands are pretty much untouched in emerging markets – in fact, they are growing fairly steadily. It’s the emerging market brands more than the premium brands that rely on cost competitiveness. There’s an interesting landscape developing – if you’re a premium brand company, the real challenge comes in getting the best customer experience from your global network, but for less premium brands it’s all about driving cost competitiveness and streamlining the supply chain. Things are pretty complex these days, with a global customer base that is always demanding more. The majority of COOs I’ve been working with are focused on reducing that complexity. We can make things as simple as possible in terms of how things operate internally, but ultimately, we work with a global customer base with complex demands.

How much emphasis is put nowadays on the so-called BRICS countries?
I think they are still critical for business success. We’re seeing a lot more requests for support in China and India in particular. When they were set up, many companies in the BRICS countries were focused on getting new equipment to high standards. What you’re seeing now is that their focus is changing towards the next generation of performance. There’s a real push for efficiency, much as there is in the rest of the world.

The other thing to consider is that there is a lot more investment in ‘knowledge centres’ in these countries. The shift away from manufacturing and engineering towards leveraging the skills and experience of the countries is becoming more popular than they have been previously – things like research and development are now more important.

Overall, the BRICS are important and they are part of the future, but they’re not dictating the future like they used to.

www.hitachiconsulting.com

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