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Interfering parents

Hitachi Europe operated from offices in the UK and Germany. They managed transactions with wholesalers and retailers throughout Europe involving the euro and other currencies, e.g. Swiss francs and British pounds. They managed these transactions and the relationships with the parent company in Japan through a number of domestic and international banks. One of the key challenges that Hitachi Europe faced was trying to simplify the process of managing transactions and cutting down on the expense incurred in its thousands of transactions. The first route that it took was to purchase and implement a new accounting system, which in itself took three years from the moment of recognising the nature of the problem through to evaluating possible solutions, negotiations with alternative suppliers and on to buying and implementing the system through to changes in practices and training the staff. The second route was to concentrate the banking business by cutting down on the number of banks Hitachi Europe had accounts with and to develop a new business relationship with a bank that had the international expertise, compatible information systems and service support of the quality level it sought. For an organisation such as Hitachi, choosing a new bank and setting up a new account was not like a consumer going into a bank branch or to a website and selecting a product from a range of standard products. The main obstacle to change faced by Hitachi Europe was the parent company’s insistence that the European offices worked with certain Japanese banks. It is left to your imagination to appreciate the nature and intricacy of the networks and relationships between individuals working in Hitachi headquarters, regional offices, country offices, wholesalers, retailers and the banks that support their operations. Developing a new relationship between Hitachi Europe and a new bank, which would involve the demise of many established relationships, would involve much negotiation within Hitachi and between existing banks and the new bank. For Hitachi Europe, the process started at the time of choosing a new accounting system. Working with the new bank took another two years to complete, five years in all.