Case Study: ITware KFT / SME / Search for Partners in Japan

ITware KFT – from HU 

ITware is a premium software development company located in Budapest in the neighbourhood of the Budapest University of Technology.

WHY JAPAN?

Lajos Szabo from ITware KFT strongly believes that if you can successfully implement a service or a product in the very demanding Japanese market, then you can implement it anywhere else in the world – ‘Only perfect solutions can make it there’.

As Mr Szabo explained, their business relationship with Japan started a couple of years ago, when they exhibited in the Mobile World Congress in Barcelona and a Japanese businessman approached them to talk about potential business opportunities.  As Mr Szabo noted, the Japanese executive read about the high number of Nobel Prize winners per capita in Hungary, compared to similar sized countries, and he was interested to learn more about their company and Hungary in general. This pleasant surprise lead to their first project in Japan, and since then, they started to gradually look for other business opportunities in Japan in the following years.

WHY HRTP MISSION?

Before going to the Human Resources Training Programme (HRTP), ITware had a business development plan on how they want to extend their customer base and focus on implementing one of their products in Japan.  Their efforts were particularly focused on FLEETware, which is a successful vehicle tracking service in Hungary. They found that it is easier to find a partner for something tangible, presentable and FLEETware was a perfect product to approach the Japanese market with.

In addition, they were looking for an opportunity where they could meet a lot of potential business partners and to extend their network of friendly European companies who are also interested in Japan. Naturally, the Human Resources Training Programme, organised by the EU-Japan Centre, seemed to be the best choice, as it provided both the chance to gain useful contacts and a very useful training in Japanese business practices, culture, language, which proved to be essential in penetrating the Japanese market.

STEPS TAKEN

During the last week of HRTP, Mr Szabo had meetings with representatives of several big Japanese companies, such as DOKOMO, MTT and some telecommunication providers. Those meetings, which were organised by the EU-Japan Centre, helped them gain about 40 contacts which laid a good foundation for even further and deeper connections as well as getting more contacts later after the mission.

With one company in particular, they managed to stay in touch and were invited to exhibit in the IT week in Tokyo. Last year, Mr Szabo’s goal at the fair was to promote software and gain useful contacts. This proved to be a success, because with one large company in particular, they are about to sign the business partnership agreement and start working together to introduce their contracting system in Japan. Although, it’s only a small step in their business strategy, thanks to HRTP programme, they now have a first big contract with a Japanese company, which is a large step towards achieving a lasting presence in the Japanese market.

CHALLENGES

According to the previous HRTP participant, one of the most important lessons learnt was to be patient – “It may take up to 5-10 meetings to actually get anywhere, to actually meet the decision-maker. And even then, you have to be prepared to be in a room with 5 people and still have no idea who the main decision maker is”.

Lajos Szabo also strongly believes that one can only sell solutions in Japan that are already totally perfected at home, mainly because the average Japanese consumer is much more demanding than anyone else in Europe - “Don’t try to implement the same thing you have here, your success in Europe does not necessarily bring you success in Japan”.

He also pointed out that language barriers can be a big problem, though you can find more and more people speaking good English in Japanese organisations, yet the best would be to have someone who can speak Japanese perfectly on the European company’s side, as this would normally speed up the cooperation and initially make the project more successful. He continued to suggest that a different approach is needed when communicating with Japanese, in a sense that one needs to phrase questions correctly and more importantly to understand the answer correctly, as Japanese companies don’t like to say “no” outright, even if it is actually a “no”. Mr Szabo concluded that it is challenging to find the ‘right’ way in this completely different business mentality, but he believes it is absolutely worth trying to do so.

CURRENT STATUS – NEXT STEPS

Currently, ITware KFT has steep ambitions to establish a strong foothold in Japan. With new potential partnerships in the horizon, as Mr Szabo suggested, the goal is to double their income coming from Japan in the near future. In addition, his success during the HRTP programme encouraged his colleague to attend the following HRTP mission, which will hopefully help to strengthen current partnerships and perhaps gain new ones.

Overall, Lajos Szabo found the HRTP programme very interesting and worthwhile, not only he had the chance to become thoroughly informed about Japanese business etiquette and learn some basic Japanese, but also he managed to gain a lot of useful contacts which already resulted in a solid partnership agreement and may lead to even more perspective business ventures in Japan. Finally, Mr Szabo mentioned that he particularly enjoyed the trip to Mie prefecture, where he visited several manufacturers in Japan and got a good impression of how Japanese manufacturing plants work.