Message from CEO
Review and Evaluation of the First Year of “15ALL”
We announced a three-year medium-term business plan “15 ALL (Fifteen All)” ending in the fiscal year ending June 2024 in August 2021. "15ALL" aims for net sales of 15 billion yen and an operating income margin of 15%.
In the fiscal year ended June 2022, net sales rose by 2.7% year-on-year to approximately 11.5 billion yen, marking a new record high for the third consecutive year. Operating income increased 34.4% year-on-year to approximately 1.5 billion yen.
Although net sales were slightly lower than planned, the amount of orders increased by 44.3% year-on-year and order backlog steadily grew by 90.4% year-on-year. In particular, with the goal to expand “Stock” type*1 business, we were able to accumulate orders for large-scale projects in the cloud service business. It was the result of the steady progress in sales activities based on our strategies.
In terms of profits, we are realizing a structure that can surely generate profits thanks to the cloud service business turning profitable this fiscal year, and the steady improvements on the quality and productivity of the system development and maintenance.
Pursuit of “Business Reliability”
In August 2022, we have revised our targets in a three-year rolling system and have formulated new targets of net sales of 16.5 billion yen and an operating income of 2.5 billion yen in the fiscal year ending June 2025.
In doing so, “Realizing Business Reliability” was newly established as our basic policy in anticipation of our medium- to long-term growth. We pride ourselves in providing a high-speed, safe, high-quality, and user-friendly IT infrastructure to support the important social infrastructure such as payments, finance, and security, and it is our belief that enhancing the reliability of our business and that of our customers’ businesses will help our company grow and contribute to a sustainable society at the same time. In particular, the system failures in the IT infrastructure for payment, finance, etc. will have a significant impact on society. It is the reflection of our belief that we must put quality first and never be lax about “reliability” even in our pursuit of high growth, in order to maintain the reliability of our customers’ businesses.
Since our founding, we have developed products that cannot be imitated by other companies, and have developed systems and provided services based on them, which has enabled us to establish a unique position in the payment industry even though we are small in scale, and it is the source of our strengths. Going forward, we will continue to focus on the development of new products, and we are aiming to develop a wide range of services as an IT service company, from system development and service provision to consulting services and system operation.
“Reinforcement and expansion of our business foundation” through business structure reform and business domain expansion
In this medium-term business plan, we have set three basic strategies, the first of which is “Reinforcement and expansion of our business foundation.” In terms of business structure reform, we will expand our “Stock” type*1 business with a focus on the cloud service business, where orders increased in the previous fiscal year. The cloud service currently offers four payment-related services, and the total number of companies using the service has risen to 20. In the future, we will further increase the number of client companies while investing in the infrastructure environment and improving the operation system that match the expansion of the number of users.
Regarding the expansion of business domains, we also aim to expand payment business domain and enter overseas markets. Since our founding, we have held a large market share in the field called FEP systems*2 of the credit card companies and have built a solid relationship with them. In the future, we will be actively involved in the new IT strategies promoted by the credit card companies, and we are promoting the initiatives to expand the system areas we are in charge of. The cashless market is expanding, and credit card companies are constantly working to launch new services. We will ensure that we meet these demands and lead to the expansion of our sales.
In terms of overseas expansion, we aim to expand into Southeast Asia, with a focus on fraud detection systems. With the advancement of the clouds, we believe it is easier for our customers to adopt our systems than ever before. We will work to achieve certain results within the medium-term business plan.
In the security and the new businesses, we will deepen our collaboration with DNP (Dai Nippon Printing Co., Ltd.) and work to expand the scale. In order for us to aim for the net sales of 16.5 billion yen, we believe that it is the key to grow the security and the new businesses into our new pillars. In the security business, we have been building a foundation since the previous fiscal year, and we are making a good progress. In this fiscal year, we will start investing in the upgrades of in-house product for preventing internal information leakage “CWAT” to boost sales again. With Third-party products, we will gradually move on to sales activities that focus on the products that are competitive and to which we have exclusive rights. The number of companies that have signed up to “Morphisec,” which protects devices from attacks such as ransomware, has increased to just under 50 since the product’s launch. In addition, we have a lineup of products that capture the growing interest in security measures in recent years, such as “Resec,” a file sanitization solution, and “ISIA,” which investigates and reports on the information leaks caused by cyber attacks. We will at first accelerate orders for these products and aim to expand their scale.
In terms of new businesses, as in the previous fiscal year, we continue to approach markets such as broadcasting, transportation, electric power, and smart factories, by utilizing the technologies and experiences we have cultivated in the payment and financial fields. Although we have not yet seen a major result, we will continue to work in this area.
Establishing “Human Resources Base” and “Co-Creation Base” for sustainable growth
In addition to strengthening our business foundation, we will work to establish a “human resources base” and a “co-creation base.” For sustainable growth, it is essential to create a virtuous cycle of employee growth and social contribution through business. Since last year, we have been promoting various changes to the personnel system, one of which is the review of the highly-skilled employee system and the establishment of the professional system. Through dialogues with our employees, it has transpired that there are a number of talents who place importance on enhancing expertise, and our aim is to correct the treatment of the highly-skilled professionals who have been under-evaluated in the past. In addition, in order to enhance the professional system, we have introduced a talent management system. It is a system that contributes to correct evaluation and improvement of expertise by recording and visualizing the achievements accumulated by our employees in a database.
In order to establish diverse work styles, we have launched the “New work-style of IWI project” We are conducting a demo-experiment of a workcation in which our employees in Tokyo work in Hakodate, and a higher-than-expected number of employees are volunteering to participate. It is an opportunity for the employees to put themselves in a different environment from usual and review their own ways of living and working, and we plan to verify how we can apply what they have noticed and learned to their working style.
We also believe that “co-creation” will be the center of corporate transformation. In July, we went ahead with our reorganization, and we subdivided the departments and clarified the missions of each department. At the same time, “co-creation” is about providing a foundation to encourage the cross-department discussions without being bound by the framework of departments and to produce output as a company as a whole. In addition, in response to various social issues, we will also make full-fledged efforts on ESG from the perspective of co-creation with external parties. We will have to clarify the current situation first of all, then eventually we will disclose the results of our efforts to the outside world.
We will take on new challenges to solve social issues in new areas, including the payment market, as well as global social issues. Thank you for your continued support.
*1 “Stock” type: projects and contracts that can generate a certain amount of sales on a regular basis
*2 FEP system: Hardware and software with network connectivity, card usage authentication, and other functions required for credit card payment processing