Issues Requiring a Response
Regarding key issues facing the TIS INTEC Group, the Group is striving to achieve its Group Vision for 2026, "Create Exciting Future," and further raise corporate value by implementing structural transformation with a sense of urgency and expanding business in the four strategic domains.
The Group views structural transformation as imperative to its success, and it has set the two targets of "Sustainable profit growth" and "Emphasis on employee self-fulfillment." "Constant transformation, with a sense of speed" will be critical to achieving these two targets. More specifically, the Group will implement various measures based on the management policies of "concentrate on core businesses," "shift to prior investment style of business development" and "expand global business."
To robustly support the achievement of these policies, the Group will continue to promote "human resources enhancement" and "management enhancement."
1. Concentrate on Core Businesses
Regarding "concentrate on core businesses," the Group will promote various measures to bolster fields of expertise in such traditional areas of strength as system integration and IT services, along with critical and priority customer business. To further raise the profitability of existing businesses, the Group Production Innovation Committee is promoting various measures to evolve the Group's strengths through increasing added value and carrying out productivity reforms including minimizing unprofitable projects and implementing enhancement and innovation activities to raise maintenance and development productivity. In addition, assuming a business environment shaped by insufficient human resources in Japan due to future nationwide population declines, the Group is accelerating the structural transformation to a business model that does not rely on increases in staffing. We also continue to revise our business portfolio from a profitability perspective.
2. Shift to Prior Investment Style of Business Development
In regard to "shift to prior investment style of business development," the Group aims to transform its own business structures to prioritize speed and flexibility, enabling a shift towards business which anticipates the needs of customers from the perspective of social issues. Specifically, the Group is promoting business creation by furthering leading edge research on AI, IoT, and robots being conducted at its research facilities, while deepening coordination between Group-backed ventures and the Group's business to maximize know-how. The Group will also seek to create business based on the concept of connecting customers to each other and connecting customers to society in order to accelerate the growth of all partners.
3. Expand Global Business
In regard to "expand global business," the Group has accelerated the establishment of capital and business partnerships with leading IT companies in ASEAN in order to acquire new business in a region which has shown particularly dramatic expansion in recent years. The Group will strive to extend its traditional strengths in settlement, banking, and ERP into global strengths as it aims to be a top-class ASEAN IT business group. In addition, the Group is enhancing the solutions it provides for clients in Japan and ASEAN markets by actively forming partnerships with leading IT companies in Europe, the United States, China and other regions.
4. Human Resources Enhancement
Regarding "human resources enhancement," the Group is striving to raise motivation even further by establishing work systems and corporate cultures which prioritize emphasis on employee self-fulfillment and enable a diverse range of human resources to thrive. The Group recognizes that raising the motivation of its employees is the most important means for achieving sustainable growth. The Company has formulated the "TIS Human Resources SBU Manifesto" outlining its measures to realize a workplace spirit and work environments that enable employees to achieve self-fulfillment through their work and generate better work results based on the Human Resources SBU’s We are steadily implementing these measures, which include the introduction of a new employment policy that extends the mandatory retirement age to 65, with no changes in the employee’s treatment after 60. The efforts have led to the Group’s two core companies being selected by the Ministry of Economy, Trade and Industry (METI) and the Nippon Kenko Kaigi for inclusion among the 2019 Certified Health & Productivity Management Outstanding Organizations (large enterprise category), which recognizes enterprises that include the health management of employees among their strategic initiatives. We will continue to aggressively promote "workstyle reform" and "health management" measures and endeavor to create the systems and workplace environment that facilitate the growth of each of our employees as well as the sustainable growth of the Company.
5. Management Enhancement
Regarding "management enhancement," the Group has carried out structural reforms in conjunction with its transition to an operating holding company structure. These reforms include the creation of "OUR PHILOSOPHY" as the Group's basic philosophy outlining the common values shared across the entire TIS INTEC Group as well as the Group Vision. Other measures have included the promotion of awareness activities, an increase in the number and diversity independent outside directors, the establishment of a Nomination Committee and a Compensation Committee for directors, and the establishment and consolidation of internal control systems and unification of management under the Group Internal Control Committee. In addition, we are carrying out the headquarters function enhancement project "G20", which seeks to improve the efficiency of head office functions through the integration of core group systems and other measures targeted at achieving more sophisticated Group management.
In consideration of the above management issues, the Group has established the three-year medium-term management plan from fiscal 2018 with the slogan "Transformation to 2020: Unifying as a Group and achieving structural reforms to become a leader in solving society's issues," and the following targets for key business indicators: A strategic business domain ratio of 50%, operating income of ¥43.0 billion, an operating income ratio of 10%, and ROE of 12%. The Company substantially exceeded all of the yearly targets for these indicators in the plan's first year, fiscal 2019. Going forward, the Group will vigorously implement various initiatives to realize structural transformation with a sense of urgency and further raise the Group's corporate value to serve as a stepping stone for achieving the Group Vision for 2026.