CM: Given that consulting is a relatively new line of work for Hitachi, has your parent company sought to better educate its workers about why consulting work is highly strategic to the overall company?
Travis: Our parent company's position has been to encourage us to share information with other Hitachi companies about customers and opportunities and possible service situations.
The other thing that's interesting is that Hitachi does spend a significant amount of money annually on research and development, a lot of it in the technology space. I think that their total R&D budget last year was like $3.5 billion U.S. That's a huge expenditure. And, you know, we've had discussions, and I've met with the vice presidents in charge of Hitachi R&D to kind of start to think about how Hitachi Consulting, through our understanding what's going on in business, the Western markets, both U.S. and the Americas and Europe eventually, how we could feed information back to R&D that would be of benefit to them in terms of new product development.
And my thought there is that we get in there. We understand future needs for clients, where they want to go. How can we take that intelligence and enable Hitachi maybe to leverage some of that to come up with products or solutions or, eventually, services, I guess, also, that can be winners in the marketplace and benefit those clients?
CM: Given the nature of some of its R&D investments, where do you believe consulting opportunities could sprout up?
Travis: Hitachi does have some interesting technologies. They've got RFID chips and all kinds of security identification technology. They've got one of the leading technologies in finger vein identification, where basically they can recognize people off the veins in their finger. They have a lot of smart card technology, ATM kinds of applications that are widely deployed, especially in Asia. And we've thought about how we could play a larger role in helping Hitachi roll out some of these technologies in the Americas or, again, in Europe someday.
CM: Still, it's not as if the consulting organization is being tasked with such a role . . .
Travis: There's been an increase in the level of discussion. I think that Hitachi is very interested in us collaborating with our sister companies. But it's certainly not a mandate. You know, Hitachi really is a decentralized group of companies that all kind of work autonomously, and we're working with the management of sister companies to try to figure out where there are synergies and what we should be doing. But it's not something that Hitachi Ltd. has elevated and is demanding that we do at this point in time.
They understand that a consulting company has to go to market being independent of specific vendors and providers in the marketplace, and that our goal is to find the best solution or to present options to our clients that they could select from.
CM: How do you remain competitive in the U.S. and in Europe with other firms that are now leveraging low-cost talent in India, China, or Eastern Europe . . . wherever?
Travis: Hitachi Ltd. operates two different sites in India right now, and we are currently using lower-cost, technical resource kinds of head count to supplement a number of our projects in the U.S. We know that over time, especially for certain solutions that you'd offer the marketplace, the only way to be competitive there is to have this mix of some on-site specialists teamed with some very highly capable and competent but offshore kinds of technical skills. I guess I'd say that we're heading in that direction, and we're already doing that.
CM: Should we be surprised to perhaps see two additional acquisitions before the end of the year?
Travis: I don't think that you should be surprised to see up to a couple, and it might be one bigger one. We still would like to have more of a footprint and a market and a client capability in the Northeast. That's obviously New York, New Jersey, Pennsylvania, Massachusetts, that whole sector. There are a lot of large companies and enterprises there, and we don't have all the people we want.
CM: Having completed a number of acquisitions, can you give us an M&A report card? How have these acquisitions gone?
Travis: The first acquisition I did in my role as president of the company was Asperity. And then the BI [Business Intelligence] acquisition. And I think that we've done a very reasonable job there of
holding on to the talent. No doubt, we lost a few people.
The recent acquisition of Navigator is too new. I mean, I think that all of the people who are here right now will be here six months down the road and hopefully we haven't lost anybody yet from Navigator. At Navigator, we made job offers to 95 people. I think we got 93 acceptances. And one was having a career change.
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