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Hitachi Consulting has trans-Pacific plans

The consulting and services wing of the Japanese technology giant aims to grow by highlighting its familiarity with the business practices of both Japan and North America.

Hitachi Consulting plans to expand by playing the culture card.

The United States-based consulting and services wing of Japanese technology giant Hitachi aims to grow by highlighting its transoceanic expertise: familiarity with the business practices of both Japan and North America. Hitachi Consulting aims to help North American-based companies build their business in Japan and Asia, and is also targeting the United States-based operations of Japanese corporations.

"As a U.S. subsidiary of a Japanese corporation, we feel we have more insight into their business model and their reporting structure, and how they relate back to their parent company in Japan," said Jim Budkie, director of marketing communications at Hitachi Consulting.

Although not as prominent in the United States as, say, IBM or General Electric, Hitachi is actually quite large. The company, whose products range from semiconductors to nuclear power plants to washing machines, posted revenue of $68.3 billion for the year ended March 31.

Just a small fraction of that revenue came from Dallas-based Hitachi Consulting. The unit, which provides business and information technology consulting, has about 725 employees and a recorded revenue last year of about $120 million. But it is growing quickly. In a recent interview, Michael Travis, president of the unit, said 23 clients have been signed in the last two months. The company predicts annual revenue will grow about 8 percent this year to roughly $130 million.

Even so, the company is using its modest size as a marketing weapon, positioning itself as an option to bigger outsourcing companies, such as IBM, Accenture and BearingPoint.

This summer, Hitachi Consulting launched an initiative to outsource customers' tasks such as application development, procurement and human resources. "What (clients) lack is a real alternative for outsourcing specific applications or processes that are too small for the large outsourcing providers to be interested, but beyond the capabilities of specialized, niche providers," Travis said in a statement earlier this year.

That outsourcing effort echoes a similar strategy by the parent company in Japan. Hitachi began an outsourcing business in its home country about two years ago and has signed on about 500 companies in Japan.

Like other IT services providers, Hitachi Consulting has been shifting some tasks to India and expects the amount of work done offshore to increase over time, Travis said. But for now, less than 5 percent of the company's work is sent offshore, he said. What's more, Hitachi Consulting is hiring in the United States, Budkie said.

The company's history dates to 2000, when Hitachi decided to launch a United States-based consulting unit. It was called Experio Solutions in the early days, but Hitachi ditched the dot-com-sounding name in May of this year for its current moniker.

Ted Kempf, an analyst with research firm Gartner, said the name change was wise, and it helps the company stand out from competitors such as Answerthink and Sapient. "The name Hitachi has huge recognition," he said. Kempf also suggested that Hitachi Consulting is one of the few "full service" midtier IT services providers in North America. He defined "midtier" as including companies with more than $100 million but less than $1 billion in annual revenue.

So far, Hitachi Consulting has served some major companies, including Northrup Grumman, Volkswagen of America and H&R Block.

Hitachi Consulting also intends to turn to its corporate siblings. There are roughly 90 different Hitachi operating companies in the United States, but the consulting unit gets just 4.5 percent of its revenue from them.

In addition, plans are brewing to integrate the products from Hitachi's technology businesses. For example, Travis says there may be ways of combining Hitachi radio frequency identity technology with consulting services to help businesses improve their supply chains. Hitachi companies "have a lot of technology that we feel is underapplied," Travis said.