[As of June 19, 2023]
The business environment in the fiscal year 2022 was characterized by global shortages of commodities and soaring resource prices triggered by the Russian-Ukrainian conflict, and the ensuing sharp rise in Japanese domestic prices caused by an excessive depreciation of the yen due to higher policy interest rates overseas as a countermeasure against inflation. The CRESCO Group also experienced the pressure of rising costs, such as labor, outsourcing, and electricity costs, and the year was marked by the challenges of securing profitability by price pass-through and improving productivity.
On the other hand, the impact of COVID-19 infection, which persisted for several years, gradually subsided in the latter half of the fiscal year, and positive trends were observed in the information service industry, as domestic companies resumed aggressive IT investments with an eye to the post-COVID-19 market, and the Group was able to secure a steady stream of orders throughout the fiscal year.
Sustainability has been the focus of social attention against the backdrop of global warming and labor shortages, and there is increasing momentum toward establishing a legal framework for disclosing information on sustainability, including that on human capital. The CRESCO Group will not turn its back on these challenges and is committed to working on them even more actively than before. In the field of AI, technological innovations are progressing so remarkably that it is now said that a singularity (a technological singular point) in which AI surpasses humans is not far off in the future. The Group is also highly aware of the need to build a business structure, looking beyond existing information technology and constantly introducing new technology.
In order to respond to this rapidly changing business environment with great agility and meet the expectations of our stakeholders, the Group is committed to promptly implementing various measures based on the recognition of the following issues to achieve sustainable growth and increase corporate value.
We recognize that it is essential to build and expand a stable customer base in order to realize the “CRESCO Group Ambition 2030” and achieve the “Medium-Term Management Plan 2023.” At the same time, the way in which we provide services requires flexible changes, particularly for IT systems, where customer needs are diversifying as the trend accelerates from the era of “making” the systems to “using” them.
To address these management issues, we at the CRESCO Group will continue to strengthen its sales and marketing divisions and expand sales channels through M&A. In addition, to turn the digital solutions business into a key contributor to profits, we will step up our efforts to expand the lineup of products in the divisions in charge and provide DX training to employees. We will also ensure to take in customer needs through forming alliances such as business and capital tie-ups with our customers and by sharing information on sales projects within the Group. In addition, we will promote our brand through aggressive public relations activities in order to win further recognition and trust from customers.
While investing in the digital solutions business, we recognize the need to continue strengthening our comprehensive IT services business empowered by CRESCO Group’s strength in development, to make it the foundation of stable business growth. To do this, we believe it is essential not only to strengthen quality, but also to stay ahead of new technologies.
To address these management issues, the Group will develop and carry out appropriate strategies for each industry segment of enterprise, finance, and manufacturing, and will also strive to maximize earning capabilities and accurately respond to customer needs while reinforcing and expanding our business through continuous M&A activities. We will also conduct ongoing reviews on our quality control processes and execute a wide range of education and training investments, such as providing our employees with opportunities to acquire certifications and qualifications, engage in in-house study sessions, and share the latest trends across the Group for the purpose of acquiring new technologies.
In the information service industry to which the CRESCO Group belongs, “people” are the most important management resource. However, changes in socioeconomic conditions, such as the spread of IT and the declining birthrate and aging population, have resulted in a chronic shortage and mobility of IT personnel, making it difficult to hire employees and secure business partners to which we outsource our operations.
To address these management issues, the Group will review employee salary levels, review the work environment including teleworking programs and office layouts, support recruitment activities through public relations activities, and invest in employee training and retention activities by such measures as implementing the newly formulated DX Human Resources Development Program and Next Generation Human Resources Development Program. As an effort to secure business partners, we will continue to promote nearshoring (distributed development in Japan through collaboration with subsidiaries and business partners) and offshoring (distributed development outside Japan through collaboration with overseas companies) mainly in Vietnam. In addition, the acquisition of IT personnel through M&A will be promoted.
In order for the CRESCO Group to sustainably enhance its corporate value, it is indispensable to have a management foundation that empowers the Group to respond flexibly to changes in the business environment, such as the diversification of customer needs, the decline in the working-age population in Japan and the importance of group management, and to utilize the wide variety of management resources in the Group more effectively and efficiently.
To address these management issues, the Group is committed to demonstrating our own DX-based management reforms by reorganizing our information system infrastructure including a review of business processes, optimizing the overall environment including for working both in the office and from home, and further strengthening the group governance system with a focus on our administrative divisions.
While the CRESCO Group is responsible for achieving its business objectives, the Group is required to promote the sustainability management, which not only enhances the corporate value but also finds solutions to social issues, and human capital management, which maximizes the value of human resources to enhance corporate value over the medium to long term.
To address these management issues, the Group established the “Basic Policy on Sustainability” in the current fiscal year, and clarified its commitment to promote actions toward the realization of a sustainable society. The Group has also announced its “Declaration on Health and Productivity Management” and “Multi-Stakeholder Policy,” making it clear that it will promote value co-creation with its diverse stakeholders, including its employees.
We will continue to conduct our business activities in accordance with these policies and strive to disclose information in a timely and appropriate manner.
For details on the sustainability management and human capital management, please refer to “2. Sustainability Approach and Initiatives.”
