Our Group aims to expand our high-value-added stock-type business, which is not a typical labor-intensive business in the IT services industry, but for further growth, it is essential to recruit and train talented personnel.
As IT penetrates all industries, competition for IT personnel is becoming increasingly fierce not only among companies in the same industry, but also among other industries and venture companies.
In order to expand our business in the future, securing human resources will become a lifeline, and we will need to continuously recruit talented employees.
Regarding regular recruitment of new graduates, we will hire personnel with high potential, and in mid-career recruitment, we will hire a wide range of experienced personnel who can be used as immediate capabilities.
Issues to Be Addressed
① Securing Human Resources
② Revenue smoothing
Due to the timing of client companies' budget execution and the construction period of the development system, the Group's profit structure tends to concentrate the completion of the provision of services and the recording of sales at the end of the full fiscal year (the end of March).
Currently, as a result of the promotion of stock-type businesses, the seasonality in which net sales are weighted toward a specific period is diminishing. However, we still recognize a situation in which sales in March, when customers' financial results are concentrated, are higher than in other months.
In order to smooth out cash flow and prevent the timing lag, in which sales are delayed from the next fiscal year due to the concentration of engineers' work and unforeseen circumstances, etc., it is an issue to smooth out orders.
The following 4 points are cited as countermeasures.
a. Increase orders for projects in which orders are finalized in the previous fiscal year and sales are recorded in the following fiscal year.
b. Constantly accept orders throughout the year based on stable, long-term business with specific customers.
c. Recording a stable revenue through the increase the ratio of stock-type businesses by receiving orders for continuous maintenance services and cloud services.
d. Proactively launch new services (pay-as-you-go cloud services, etc.) to build a sustainable and stable business model.
In order to smooth out cash flow and prevent the timing lag, in which sales are delayed from the next fiscal year due to the concentration of engineers' work and unforeseen circumstances, etc., it is an issue to smooth out orders.
The following 4 points are cited as countermeasures.
a. Increase orders for projects in which orders are finalized in the previous fiscal year and sales are recorded in the following fiscal year.
b. Constantly accept orders throughout the year based on stable, long-term business with specific customers.
c. Recording a stable revenue through the increase the ratio of stock-type businesses by receiving orders for continuous maintenance services and cloud services.
d. Proactively launch new services (pay-as-you-go cloud services, etc.) to build a sustainable and stable business model.
③ Impact of Foreign Exchange Fluctuations
Of the products handled by the Group, the majority of products purchased from overseas are contracted in U.S. dollars. Sharp fluctuations in foreign exchange rates may affect our group's business, performance, and financial position. For this reason, we enter into forward exchange contracts to hedge the risks associated with exchange rate fluctuations. In addition, we negotiate prices with our customers in accordance with foreign exchange market conditions.
④ Funding for Large Ongoing Transactions
In recent years, the cybersecurity field has become increasingly cloud-based, with a trend toward larger ongoing business contracts with customers, such as multi-year subscriptions. In such cases, the collection of funds from customers is made every single fiscal year, while in some cases, payment to overseas vendors is made in advance in a lump sum, which may cause cash flow burdens. Therefore, we will closely monitor the gap between the collection cycle and the burden of advance payments, and carry out planned cash management.
⑤ Prompt response to changes in the market environment (needs)
Due to the timing of client companies' budget execution and the construction period of the development system, the Group's profit structure tends to concentrate the completion of the provision of services and the recording of sales at the end of the full fiscal year (the end of March).
Currently, as a result of the promotion of stock-type businesses, the seasonality in which net sales are weighted toward a specific period is diminishing. However, we still recognize a situation in which sales in March, when customers' financial results are concentrated, are higher than in other months.
In order to smooth out cash flow and prevent the timing lag, in which sales are delayed from the next fiscal year due to the concentration of engineers' work and unforeseen circumstances, etc., it is an issue to smooth out orders.
The following 4 points are cited as countermeasures.
a. Increase orders for projects in which orders are finalized in the previous fiscal year and sales are recorded in the following fiscal year.
b. Constantly accept orders throughout the year based on stable, long-term business with specific customers.
c. Recording a stable revenue through the increase the ratio of stock-type businesses by receiving orders for continuous maintenance services and cloud services.
d. Proactively launch new services (pay-as-you-go cloud services, etc.) to build a sustainable and stable business model.
In order to smooth out cash flow and prevent the timing lag, in which sales are delayed from the next fiscal year due to the concentration of engineers' work and unforeseen circumstances, etc., it is an issue to smooth out orders.
The following 4 points are cited as countermeasures.
a. Increase orders for projects in which orders are finalized in the previous fiscal year and sales are recorded in the following fiscal year.
b. Constantly accept orders throughout the year based on stable, long-term business with specific customers.
c. Recording a stable revenue through the increase the ratio of stock-type businesses by receiving orders for continuous maintenance services and cloud services.
d. Proactively launch new services (pay-as-you-go cloud services, etc.) to build a sustainable and stable business model.
⑥ Cultivating foreign markets
In the domestic information services industry, cloud services are becoming more prevalent and IT investments are beginning to show shades of gray in each sector, requiring businesses to expand from a more global perspective. We will develop export business of our self-developed products and services to overseas markets, especially to the growing emerging Asian countries.