Hitachi America Ltd.

Hitachi America, Ltd. (HAL), a wholly owned subsidiary of Hitachi, Ltd., markets and manufactures a broad range of electronics, computer products, and industrial equipment and services throughout North America. HAL is a multi-billion dollar company with more than 6,000
employees in 7 divisions and 10 subsidiaries within the United States. The company’s product lines include leading edge technology in the computer, power generation, office automation, consumer electronics and telecommunications industries.

Business Environment

Hitachi America Ltd. was founded in 1959 and established Hitachi as a major leader in the industrial power industry as well as the electronics industry in North America. During the
1970s, HAL. turned its’ focus to the computer and semiconductor industry. Today, HAL continues to pursue all of its’ former initiatives as well as a new mission for the next century - to lead the trend toward digital convergence in the worlds single biggest market – the United States.

Much of the products and services that HAL provides to North America are supplied by various Hitachi plants in Japan and the United States as well as other sites around the world. As a result, HAL, like other companies in the technology industry, conducts business in a global market with a strong emphasis on the Japanese and Asian economies as well as the economy in the United States. The instability of the Asian economy in the late 1990s combined with the fast paced and competitive technology market has created new challenges for HAL. Amongst these challenges has been the initiative to improve operational efficiency and reduce costs throughout the company.

In 1998, HAL implemented the SAP R/3 system in all of its’ divisions. Shortly after going live with the SAP systems, HAL identified the support of their SAP systems as a function that
was not a core competency for their company. As a result, HAL decided to eliminate their SAP
support staff and outsource the support and maintenance of their SAP systems to a certified SAP partner in January of 1999.

SAP R/3 Implementation

When Team Consulting, Inc. (TCG) was first introduced to HAL, the SAP system had already been implemented and all of its’ 7 divisions had been live for 3 – 12 months.

HAL consists of 7 divisions with various plants and sales offices located throughout the United States. Each division provides separate products and services in different markets and,
therefore, has unique business practices and procedures. As a result, each division had been
implemented as separate entities within the SAP system by a 20-member Hitachi implementation and development team. Each division is represented in the SAP system, as a different company comprised of unique sales entities and plants. Additionally, each division uses different aspects of various SAP modules including Financial Accounting (FI), Controlling (CO), Sales & Distribution (SD), Materials Management (MM) and Quality Management (QM).

In January of 1999, the existing 20-member implementation team for all divisions was replaced by TCG as the provider for all SAP activity within the system. The primary objective was to develop and implement a workable vision and model for providing quality support and ongoing
development in the SAP system with a small team.

Scope

TCG immediately began responding to SAP problem issues and support requests from the HAL business community. Additionally, TCG worked with HAL management to develop a model and a methodology for providing ongoing support and development for all of its’ SAP business
procedures. The initial step was to identify, classify and prioritize existing open issues and potential future issues. Once identified a support organization needed to be built that was capable of resolving these issues with a budget of 2.5 people.
The support model needed to support HAL through all activities affecting the state of their SAP system including production problem issues, company re-organizations, new business
procedures, testing, business process rollout and periodic system upgrades to new releases of the software. In both phases a number of interfaces were needed to guarantee the flow of the information required through the entire Apple system environment. Most of the interfaces are vital for Apple’s corporate worldwide integration of Financials, Logistics and Planning functions.

Support Teams

Team Consulting Group, Inc. provides the primary support for the HAL SAP system. The TCG team consists of 2 people full time and 1 person part time to provide all business application
support including SD, MM and FI/CO functions. The team is supplemented by 3 people from the Hitachi information technology group that provides support for basis functions, security and overall management of the SAP team. On occasion, additional outside resources are obtained short term to provide ABAP programming skills. Select members of the business community work with the SAP group to develop changes to existing SAP business processes or new business. The business process leaders are responsible for rolling the process out to other members of the business community.

Duration

All production support and new development for the HAL SAP system commenced immediately and continues in an ongoing fashion. An initial model for creating a long-term SAP support
organization for HAL was created in the first 6 weeks. This model continues to provide HAL with a methodology for maintaining the SAP system and a vision for the future support of their system.