Best Treasury Transformation Project Highly Commended: Hitachi International

Published: Jan 2024
Photo of Minako Stryer, J.P. Morgan, Mandy Lim, Hitachi International Treasury and Zarinah Zin, J.P. Morgan.

Photo of Minako Stryer, J.P. Morgan, Mandy Lim, Hitachi International Treasury and Zarinah Zin, J.P. Morgan.

Masatoyo Kamiya

General Manager, Treasury Department, Hitachi Ltd.

Mandy Lim

Chief Treasury Officer, Hitachi International Treasury (GTC)
Hitachi logo

Founded in 1910, Japanese multinational conglomerate Hitachi Ltd. has been helping customers and society grow and evolve by applying data and technology in a wide range of industries to create a sustainable society. With over 322,525 employees worldwide, Hitachi recorded revenues of ¥10,881bn for the year ending March 31st 2023.

in partnership with

Deloitte logo
J.P. Morgan logo

Multi-year visualisation journey delivers best in class treasury for Hitachi

The challenge

Hitachi’s business has grown significantly over its 113-year history with the conglomerate operating across 60 markets today. But as Hitachi grew, it acquired hundreds of new entities that not only came with new suppliers, customers and banking providers in more locations but also with complex and disparate systems and operational workflows. Combined with the rapid pace of payment evolution and increasing regulations, Hitachi sought to modernise its treasury infrastructure to optimise the way its group treasury is managed.

The solution

Hitachi embarked on a highly complex multi-year treasury visualisation journey through the adoption of new-age treasury technologies such as SAP S/4HANA and host-to-host (H2H). Hitachi is one of the first adopters of SAP module Advanced Payment Management (APM) which allows the company to consolidate commercial payments from multiple sources combined with SAP regular payment approval workflows and optimise payments-on-behalf-of (POBO) processing. As well as setting up a best in class POBO structure that’s seamlessly connected to existing liquidity structures across other Hitachi entities to automate funding and streamline treasury and risk management for its 233 group entities. Through automation and centralisation, the transformation has helped Hitachi save approximately US$90m in annual transaction fees and indirect costs, including over 28,000 man-hours.

Hitachi set-up resident accounts for key currencies including USD, CAD, GBP, EUR, JPY, SGD, HKD, CHF, THB and AUD, enabling the mixed of low value payments and larger payments in these currencies to be made via both domestic transfer and wires to take advantage of cost benefit and speed up fund transfers. For business continuity planning (BCP) purposes, Hitachi maintains primary and secondary accounts for each of its major currencies that are held with different banking providers, to ensure the resiliency of its POBO structure.

For payments in other currencies, Hitachi tapped into J.P. Morgan’s Global Mass Pay (GMP) solution where the GTC can utilise a single USD account in Singapore to disburse high-volume low-value payments across 32 currencies on behalf of 60 group entities planned, with the flexibility to cover up to 120 currencies as Hitachi will add new group entities into its structure.

Hitachi GTC had built several types of multi-bank and cross-border liquidity management structures across regions. With J.P. Morgan’s support, an efficient liquidity connectivity leveraging multi-bank and cross-border sweep was set-up to connect different bank accounts between Hitachi GTC and one of Hitachi subsidiary (Hitachi Vantara) in line with POBO implementation. The sweeps mechanism allows GTC to automatically pull funding from Vantara’s own regional multicurrency notional pool in Singapore to fund its POBO transactions.

This prestigious award provides an acknowledgement to the project team and gives our people a morale boost for their hard work.

It also increases awareness within the company that effort has been put in from various departments including the treasury team for the transformation project to reduce inefficiencies and save costs.

Masatoyo Kamiya, General Manager, Treasury Department, Hitachi Ltd.

Best practice and innovation

Treasury transformations are highly intricate projects especially for Hitachi’s size and scale comprising 60 group entities with complex and disparate legacy systems and workflows. But with a lean treasury team of 20 within its GTC, Hitachi sought the right banking provider and solutions that would allow the payment hub to centralise operations across different countries and regions in the most operationally efficient and cost-effective manner, while catering for additional entities’ participation in the future.

With the successful migration of its first pilot entity, the GTC will be integrating other major subsidiaries into its POBO structure in a phased approach, to ensure the unique requirements of each entity are accurately captured and tested for.

Key benefits

  • Cost savings – US$1.2m per annum.

  • Headcount savings.

  • Number of banking partners/bank accounts reduced.

  • Process efficiencies.

  • Increased automation.

  • Risk mitigated.

  • Improved visibility.

  • Errors reduced.

  • Manual intervention reduced.

  • Increased system connectivity.

  • Future-proof solution.

Hitachi is on its way to building a best in class global treasury function that not only serves as a centralised payments and operations hub for its 233 group entities, but also a key driver of process simplification, cost optimisation and improved risk management for the entire organisation.

Hitachi has successfully adopted SAP S/4HANA through their implementation partner Deloitte, as well as leveraging GMP to integrate cost and process efficient payment solutions into its POBO structure – marking significant milestones in its multi-year transformation journey.

Kesavan Thuppil

Principal, Global Treasury Advisory Services for Deloitte

Deloitte is thrilled to have played a role in Hitachi International Treasury’s outstanding performance in treasury transformation. Hitachi’s successful implementation of SAP S/4HANA Treasury and Cash Management solution, complete with advanced functionalities like multi-lateral netting, end-to-end foreign exchange management, payment on behalf, in-house banking and the cutting-edge advanced payment management module, is truly commendable.

This transformation has not only revolutionised Hitachi’s treasury operations, but also streamlined its connections with multiple banks and source systems, making it a groundbreaking endeavour for the entire group.

Deloitte would like to congratulate Hitachi International Treasury for this exceptional milestone in its financial journey!

in partnership with

Deloitte logo

Paul Van Sint Fiet

Product Solutions Director, Payments, J.P. Morgan

As Hitachi was looking for integrated solutions that offer enhanced automation, competitive FX execution and streamlined delivery for their payment-on-behalf structure, we were able to support them by creating a workflow that leverages both our leading foreign exchange and payment franchise. The solution allows Hitachi to conduct domestic disbursements from a single account held overseas, resulting in a significant reduction of accounts held, simplify execution and allowing their treasury team to focus on more strategical transactions, directly contributing to their bottom line. We are extremely grateful to be part of this journey with Hitachi and continue the collaboration across multiple teams at Hitachi and J.P. Morgan.

in partnership with

J.P. Morgan logo

The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. The 2023 awards attracted 450 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia

All our content is free, just register below

As we move to a new and improved digital platform all users need to create a new account. This is very simple and should only take a moment.

Already have an account? Sign In

Already a member? Sign In

This website uses cookies and asks for your personal data to enhance your browsing experience. We are committed to protecting your privacy and ensuring your data is handled in compliance with the General Data Protection Regulation (GDPR).