Hitachi adds notch to services belt

Experio Solutions, the consulting arm of Hitachi, has purchased fellow consulting firm Tactica in a move designed to put Hitachi on par with other full-service technology providers such as IBM.

"We plan to be a billion-dollar consulting company by 2004," said Chuck Scoville, president of Experio. Both Experio and Tactica companies are in Dallas, with combined annual revenues of about $US140 million.

Finalised late last week, the acquisition is part of a plan that began in 1999 when Hitachi hired consulting firm McKenzie to help transform Hitachi from a hardware vendor to a full service provider. Hitachi took the first step when it bought Experio, the consulting division of Grant Thornton in Chicago, in November 2000.

"They [Hitachi and McKenzie] examined about 800 consulting companies," said Scoville. Hitachi finally chose Experio for the company's breadth across strategy consulting, technology implementation, and enterprise integration, he said.

Tactica adds more strategy consulting, custom development skills, and geographic strength in the Southwest and Midwest, according to Scoville. "Tactica also gives us more vertical depth in utilities and telecommunications."

He said the goal is to build Experio into an organisation that can eventually compete with heavyweights such as Accenture and IBM Global Services.

That is an ambitious goal, according to Stephen Lane, research director at The Aberdeen Group in Boston. "It took IBM 10 years to make global services what it is today," Lane said. "It was the result of a conscious decision on the part of [IBM chairman and CEO] Lou Gerstner himself, and it was still a long process."

Scoville admits that Experio doesn't have enough personnel yet to compete with the big guns on really large jobs, but he says his company already goes head to head with the consulting giants on smaller projects.

Joe Lacik, chief information officer at Aviall, an independent distributor of aeroplane parts in Dallas, is a current customer. "We hired Experio to do our Siebel implementation," Lacik said. "I think they are competitive with the bigger firms."

Scoville said Experio's rates are in line with the norm, about $US200 per hour, but he noted there is downward pressure. "Rates are slipping to $185, and some of the big consulting firms are charging as low as $125, just to keep people busy and cover the payroll."

Lacik also said it is a good time to shop for bargains in IT consulting. "These days any IT executive that has a budget has significant leverage with consultants."

Lacik said he liked the depth of experience Experio had to offer. "They really brought in the best players available for our CRM project," he said. "And I know they are not going to pull an experienced person off and put in a kid with a lunch pail to get training at my expense."

Anna Danilenko, an analyst at IDC, said the addition of Tactica gives Experio more front-end, strategic business consulting expertise. "This is especially important now when IT executives are under more pressure to bring IT in line with business strategy," she said.