January 7, 2002
Commitment for "Selection and Concentration"
~President's message welcoming the year
2002~
I wish all of you A Happy New Year!
One year has passed since ISID was listed on the First Section of the Tokyo Stock Exchange. As I have said numerous times before, becoming a public company means that, along with a substantial increase in stakeholders including stockholders, a responsibility arises to reward them with returns that exceed their expectations. The stockholders' equity that increased exponentially when the company was listed is something we have been entrusted with by the stockholders. We must faithfully carry out the cycle of investing to offer clients high-quality solutions, and then giving back the returns we gain from clients to the stakeholders.
The medium-range operational goals for ISID are posted as consolidated sales of 120 billion yen, ordinary income of 12 billion yen, and 12% ROE (Return on Equity) for the fiscal year 2003. An average annual growth in sales of approximately 30% and an average annual growth in ordinary gains of approximately 40% are necessary in order to achieve these goals. The stock market holds expectations for the company's future. We must meet those expectations.
In order to achieve these goals, we have to commit "Selection and Concentration" that intensively invest operational resources into focused target markets. In today's on-going cut-throat business environment, every business is mentioning these words but ISID has actually been putting choices and concentration into practice since its startpoint. Since the time of the TSS Division at Dentsu, Ltd., we have been focusing on business development of "Global Business" and "Networks", and we acquired the major companies as our clients who represent Japan in expanding into overseas before anyone else in financial, automobile, home electric appliance, and precision instrument industries. After that, having laying out an organizational system specializing in types of industries and businesses, we continued client approaches that either determined target industries or narrowed down applications, while accumulating business knowledge and systemization know-how that would have raised the level of the solutions we offered. Our current strong presence in the fields of customer service in the financial industry, fields related to settlements, fields of investment operations, and design and development in the manufacturing industry are the results of our efforts to significantly pare down and cultivate markets.
What must not be forgotten is that ISID was not interested in fields in which other companies could enter easily and in which the only competition was over price. In the past as well as in the future, ISID's targets are the rich fields that are niches, but in which returns can be gained by deepening those niches. With foresight to anticipate the times, we aim to focus on fields in which we can obtain dominant positions by making use of ISID's strengths and become a top player in those fields. As declared in the management philosophy, this is the challenge to "Market Creation". "Choices and concentration" is certainly not simply a trendy phrase. I would like you to take to heart the fact that it is a source of uniqueness that differentiates ISID from other companies.
The operational resources being invested in priority markets will not be that of ISID alone, but rather a total power that includes group and partner companies. This year too, with the objectives of acquiring advanced IT, strengthening our consulting and marketing abilities, expanding our business territory, and raising the number as well as the level of our engineers, we will actively proceed with tie-ups with other companies.
As a result of accelerating group operations following the stock listing, there are currently a total of 14 consolidated subsidiaries and affiliates applied equity method , including 7 in Japan and 7 in foreign countries. In this time of consolidated accounts, an increase in the overall group value is demanded. What I request of you in the midst of this increase in group companies is that you change your way of thinking so that you act from an ISID group viewpoint even more than ever before. That is the first step for group operations. We are aiming for the creation of a system in which each companies within the group stands out, but at the same time a collaborative synergy emerges depending on the project. We will also exchange human resources within the group. I would also like to let you know that, for the objective of making the management and operation of the entire group efficient, we are considering establishment of a new company that will centralize management staff functions to the utmost and provide specialized services to each company in the group.
From a medium and long-range perspective, expansion of the IT market is a certainty. According to the market scale forecasts announced by both Gartner Japan and IDC Japan at the end of last year, the Japanese IT market will continue to grow at an annual average rate of over 7%, and in 2005 will reach a scale approximately 1.5 times that of 2000. From a short-range perspective, however, it is certainly not a situation about which to be optimistic, with the deterioration in business confidence, especially in the manufacturing industry, continuing along with a recurrence of financial system apprehensions due to the burden of bad loan. At this time, I would like you to put forth your best efforts in aiming to meet this term's budget, by promoting sales, as well as controlling costs and expenses while maintaining full awareness of this difficult environment.
ISID sets our vision to be an "IT Solution Innovator". I would like us to be an appealing entity for stakeholders overall as a company leading the industry with its innovative and creative ideas and actions, and the presence and influence that arise from them. I hope you will all strive for personal innovation and contribution to company development in a free and open corporate culture with the key phrase of "ISID, Forever New".
