Panasonic Spin-Off Camera Manufacturer’s Growth Strategy
Becoming a True Global Company
i-PRO’s strategy should be realized on the global stage. In fact, overseas sales have grown to 60% of our business, and our major rivals are global manufacturers. Next, I would like to discuss our management base for achieving victory over our global competitors. When we speak of a management base, it refers to both “brains” and “brawn.” “Brains” describes the information system, which is tied to finances, “brawn” describes our organization and human resources.
To support our “brains,” we replaced the old system inherited from Panasonic with a world-standard ERP package. We had only 18 months to complete the migration process. This created many challenges, but the work was completed in September 2022.
When we were a business division of Panasonic, we only represented a minor contribution to the group’s overall sales of eight trillion yen. In other words, for Panasonic as a whole, i-PRO was no more than a cost element. Consequently, in regards to financial accounting, all we had to do was to report once a month in the designated format to the parent.
But after becoming an independent company, the speed and granularity required for accounting functions has completely changed. We need to know day-to-day accounting information in minute detail and in real time, such as revenue for each product and client, individual inventory levels and out-of-stock items.
For this reason, we introduced a world-standard key information system, and are driving initiatives to significantly improve the quality and speed of our accounting processes. In regards to improving the quality, we hired a global cost controller to manage cost efficiency for the various expenses, labor costs, IT-related costs and so on throughout the value chain, from procurement through to manufacturing, logistics, warehousing and sales. Regarding speed, we are building a data warehouse (DWH) and leveraging business intelligence (BI) to enable each business division to act efficiently and effectively. We also use cloud services for approval work flow, expense management with the aim of conducting these more efficiently.
In our time with Panasonic, staff from the accounting division were dispatched to business divisions to provide accounting support. At i-PRO, we still follow this convention, with a team of “Finance Business Partners” formed directly under CFO. The team members attend meetings of each division to deepen their understanding of business activities, whereby they can more deeply scrutinize financial data, spot signs of risks and promote countermeasures, notice strategic opportunities and initiate action, and occasionally provide advice and consulting to new businesses.
At the same time as reforming our “brains” we are also driving reform of our “brawn.” In the time of Panasonic, we appeared much like a traditional Japanese company, with a corporate structure where the Japanese entity formed the backbone, and overseas subsidiaries were positioned as overseas sales companies. The consequence of this was that feedback from overseas subsidiaries was downplayed as mere information peculiar to that region, and little attention was paid to it. The core information was shared mainly in the Japanese language among trusted Japanese colleagues. With such homogeneous organizational behaviors, we were unable to immediately detect global changes in the industry structure.
Having reflected on this, we reconsidered our organizational structure from square one. We discarded the idea of a Japanese headquarters and overseas sales subsidiaries, revising our organizational structure to transcend borders, considering how to optimize i-PRO’s structure, comprised of over 1,300 people worldwide. Now, our officer responsible for global development in the surveillance camera business is based in the United States, the key global market, from where he directs Japanese R&D team. The business leader for medical spectroscopy cameras is an American based in the United States, to whom those responsible for the business in each country report.
They say that the organization follows strategy, and in the same manner, the first task that the CHRO set to address was building a common global human resource system so that we could reform the organization quickly to respond to changes and revisions in global level strategies and tactics. For this, we introduced an integrated human resources system called Workday to operate our grading, evaluation and compensation systems globally. Because of this, we can plan and evaluate personnel under the same criteria, even in cross-border organizations.
At i-PRO, we employ officers responsible for IT, finance, and human resources who accept diverse values and who understand global standards. Reform of our brains and our brawn is naturally accompanied by pain, but we drove reform through collaboration between talent from the old Panasonic, who are very familiar with the business, and new talent who understand the global standard management base.