Challenges to Be Addressed

While restrictions eased in many countries with the establishment of the “with COVID” approach, the global economy during the current fiscal year was severely impacted by supply constraints and high inflation due to the prolonged conflict between Russia and Ukraine, as well as the tightening of global monetary policy to control inflation.

Amid these global conditions, the Japanese economy has been gradually improving and is expected to further recover as economic and social activities continue to normalize. However, there is concern that rising prices and a downturn in overseas economies will have a negative impact on corporate earnings.

Meanwhile, the IT industry continues to grow on the back of demand for restructuring and adding functions to existing systems using new IT technologies (AI, 5G, RPA and cloud services, etc.) to solve the 2025 problem, in addition to improving operational efficiency against a backdrop of labor shortages. This recovery is further accelerated by normalizing economic and social activities.

The 2025 Problem In the Digital Transformation (DX) Report released by the Ministry of Economy, Trade and Industry in September 2018 (Study Group Working toward the Transformation to a Digital Industry), the “2025 Digital Cliff” was identified as a potential economic loss of up to ¥12 trillion/year after 2025 if maintenance issues with existing legacy systems cannot be overcome.
AI AI (artificial intelligence) is a technology that allows software to perform some of the intelligent actions of humans, such as problem solving.
5G 5G (5th Generation Mobile Communications System) is a fundamental technology that enables mobile communications with ultra-high speed, ultra-high capacity, ultra-mass connectivity, and ultra-low latency compared to the 4th Generation Mobile Communications System (4G).
RPA RPA (Robotic Process Automation) is when routine desk work is automated with software (robots) equipped with AI and other technologies.
Cloud Services Services that provide server and application functions via the Internet.
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For the fiscal year ending November 30, 2023, we project net sales of ¥20,292 million, up ¥1,238 million from the fiscal year ended November 30, 2022. However, we believe that there is still a risk of continued weakness in capital investment due to external factors, such as the prolonged conflict between Russia and Ukraine, the resulting soaring costs of materials, and the outbreak of a new COVID-19 variant. We also believe it is necessary to continue addressing challenges related to securing development systems, such as improving recruitment and turnover rates, and securing outside procurement.

1. Challenges to Be Prioritized

Based on the management environment described in “2. Business Conditions, 1. Corporate Management Policy, Business Environment and Issues to be Addressed, etc. (3) Management’s Perception of the Business Environment,” we recognize that securing human resources and partner companies to strengthen our development system and enhancing personnel training are urgent issues. The Company will work to prevent the outflow of human resources by strengthening mid-career recruitment, expanding core partners through early disclosure of planned orders to partner companies, developing training programs based on lessons learned from unprofitable projects, and improving compensation based on improved productivity.

2. Key Indicators

Priority Measures 53rd Term
(Fiscal year ending November 30, 2023)		 54th Term
(Fiscal year ending November 30, 2024)		 55th Term
(Fiscal year ending November 30, 2025)
Improvement of Performance Net Sales
(Year-on-year change)		 ¥20,292 million
(+6.5%)		 ¥22,000 million
(+8.4%)		 ¥24,000 million
(+9.1%)
Ordinary Income Margin 14.7% 14.8% 15.0%
Expansion of Development Capacity Number of Development Personnel
(Year-on-year change)		 1,304
(+90)		 1,396
(+92)		 1,502
(+106)
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Notes:

  • 1. The items in this table are target figures and may not be achieved due to changes in the external environment or other factors.
    In addition, the figures for the 54th and 55th terms may be revised when formulating the medium- to long-term business plan for the following fiscal year, depending on changes in the circumstances surrounding the Company.
  • 2. The number of development personnel is the number of the Company’s employees engaged in software development as of the end of the fiscal year.

Management Information

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