Issues Requiring a Response

The Group believes that the business environment will remain favorable, although a number of events need to be closely monitored, such as growing political and social tensions and the global economic uncertainty.
As society demands both economic development and solutions to social problems, innovative technologies such as generative AI are rapidly entering the practical stage, and the need for digital applications in society is expected to continue expanding and diversifying. Regarding these evident business opportunities, we anticipate significant fluctuations in the competitive landscape on both the demand and supply sides. This will be due to the advancement of global IT platforms and consulting firms, as well as the increased activity of new entrants from peripheral industries, etc.
As we foresee major changes in the business environment, we believe it is crucial for the Group to enhance its ability to solve problems by further refining its in-depth understanding of clients and technology, which is its strength, and to broaden its ability to solve problems through co-creation with players with diverse capabilities. We recognize the following management challenges.

1) Aggressively expanding in growing business areas
We must strengthen the revenue base further and create an environment that generates value-added services, technologies and human resources.

2) Strengthening and extending problem-solving capabilities
We must gain deeper insights into the real issues facing society and clients and acquire problem-solving methodologies that go beyond conventional frameworks.

3) Upgrading of human resources
We must develop value-added human resources and achieve competitive compensation levels.

4) Gaining agility in the practical application of new technologies
We must develop high-level technical personnel who can lead the continuous evaluation of new technologies and their on-site application and build a knowledge base.

5) Encouraging the accumulation and use of intellectual property
We must accumulate and promote the use of high-value intellectual property to achieve business restructuring and scale-up.

6) Upgrading governance
We must upgrade governance further to support ambitious growth plans.

7) Optimizing business portfolio
We must pursue an optimal business structure to accomplish the above and maximize results with minimum capital.

Based on the above, we will launch our medium-term management plan (2024–2026): Frontiers 2026, formulated as a three-year plan starting in April 2024. While translating the various investments and customer relationship-building activities undertaken in the previous medium-term management period into positive results, as the first stage toward realizing the Group Vision 2032, we will build on our achievements to date to create a clear advantage and, through differentiation and concentration, accumulate reasons to be the lasting choice of markets and customers in the future.

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