7. Value Creation Strategy

Achieving operating income and ROE and
ROIC goals ahead of scheduleThree-year medium-term business plan

A new stage for accelerating initiatives
to resolve challenges and achievesustainable growth
Reinforce
management baseThree basic
guidelines

Enhance
profitability

25,000• Introduce ROIC-based
management• Strengthen internal collaboration• Reform management procedures• Promote internal DX• Refine investing and businesswithdrawal rules

21,00017,021• Change approach significantly

15,000

ROIC¥21.0 bn

¥3.2 bn

13％ or more

13％ or more

Medium-term management plan target period: FY 2021 to FY 2023

Response: Valuing the power of empathy
Deepening: Strengthening relationships
with all stakeholders
Evolution: Striving for something better
Imagination: Embracing flexible thinking
Creation: Forging a company that can provide
continuing value to society

These key concepts of our medium-term management plan articulate the collective sentiments ofour employees and encapsulate our journey to a
new stage. While evolving beyond past conventions,
ITFOR remains dedicated to meeting expectations
through the power of empathy and by fostering
deeper connections with its stakeholders. This
reflects our ambition to drive the advancement ofsuperior products and services, fueled by a commitment to flexible thinking and the creation of ongoingvalue for society.

28

Three methods for achieving sustainablegrowth● Reinforce management base to ensure robust
growthWe hope to achieve an optimal governance framework
by enhancing supervisory functions, restructuring
departments, fostering internal collaboration throughcross-functional projects, and fortifying investment
and financing regulations. We will vigorously advanceinternal DX through concentrated investments in
our internal systems and human capital. And we will
strengthen our development structure and the qualityof what we develop—essential elements for expanding
our business scale—by increasing personnel, acquiring
new technologies, and revitalizing project management
methodologies.
● Enhance profitability based on return on invested
capitalWe will emphasize return on invested capital (ROIC) for
profit management at the divisional level and will fostera heightened awareness of costs throughout our group.
Long term, we plan to establish division-specific ROIC
targets and to break them down to better understand
ROIC on a more granular level within a financial analysis
framework. Our objective is to expand revenue by identifying opportunities across divisions.

13.5

13.5

2,000
13.0
1,500

10,000

0

ROE

13.9
13.7

2,500

12.5

12.0

500

Operating income

14.5

14.0

5,000

Net sales

Change: Breaking free from past conventions

3,000

1,000

• Invest in growing andnew businesses

Philosophy embedded in henca (change);sinca (evolution); and sozo (imagination)

3,217

ROE and ROIC (%)

18,322FY

21

22

23 Forecast

Net sales ¥21.0 billion

Quantitative
targets

3,400
3,031

• Appoint promotion office• Pursue synergies among
business units• Bolster development
system and quality

Operating income (Millions of yen)
3,500

20,000

Advance ESG
management• Conduct organizationaland structural reform• Enhance human resources

Net sales (Millions of yen)

(Net sales trending upward towardfiscal 2023 target)

0

FY

21

22

23 Forecast

11.5

Operating income¥3.2 billionーachieved

FY

21

22

23 Forecast

ROE and ROIC of 13%
or moreーachieved

Medium-term business plan targets• Net sales final-year target should be achieved given upward trend• Operating income target achieved ahead of schedule in the second year;
final-year target revised upward, to ¥34 billion• ROE and ROIC targets achieved in first year, and percentages continue to rise

● Advance ESG management with a focus on social
contribution
As the chairman of the Sustainability Committee,
ITFOR’s president will lead the company in addressing
societal challenges with its products and BPO services.
The objective is the sustainability of society and of
corporate value.

Progress of Next Stage 2023
ITFOR’s third medium-term management plan, Next
Stage 2023, covers the three-year period from fiscal
2021 to fiscal 2023. The year ended March 2023
was our fiscal year 2022 and the second year of
Next Stage 2023.
During the year under review, we attained the plan’sfinancial targets for operating income, ROE, and
ROIC ahead of schedule. We are well positioned tomeet the plan’s net sales target in fiscal year 2023,
the final year of the plan. Notably, orders received
and the orders backlog reached unprecedented
levels in the first quarter of fiscal 2023.

Our revision, moreover, of our corporate philosophy
in December 2021 to align it with our purpose has
gained traction in its company-wide adoption tofoster a cohesive organizational approach. Thisalignment is instrumental to reinforcing our management foundations, to enhancing our profitability
through synergies, and to advancing our pursuit of
ESG.
ITFOR is at a historic turning point as it seeks to capitalize on the technologies and expertise that it has
cultivated over its 50-year history for the purpose ofcontributing ever more to society. Within the fiscal
year under way, we will achieve the remaining objectives of Next Stage 2023 to thereby lay a robust
foundation for a new stage of our growth.

29

7. Value Creation Strategy
Added value as a source of competitiveness

Financial Systems Division

Providing packaged systems for businessefficiency
Go Yoshimura
Director and Executive Officer,
General Manager of Financial Systems Division
In step with the expansion of credit sales toindividual customers
The Financial Systems Division provides packaged
financial solutions systems, including a total collection system “TCS” for delinquent loans, to nationwide banks, credit unions, nonbanking financial
institutions, guarantee companies, servicers, andothers.
The division has been the exclusive representativein Japan of US-based Datapoint Inc. since 1973. A
pivotal moment in the Financial Division’s evolution
into a solutions business occurred in 1983 when it
developed Japan’s first auto-call system, a precursor
to its TCS and its personal loan collection management system “CMS.” The division’s auto-call innovation was prompted when a department store thatwas utilizing ITFOR’s POS system and managing
its in-house credit sought ITFOR’s assistance inmanaging the collection of delinquent credit receivables amid the expanding use of credit by Japanese
consumers.
The auto-call system developed by ITFOR seamlessly integrated Data Point’s office computer with
its auto-call unit, a specialized telephone device.
This pioneering system introduced a transformative
approach to task management in enabling users toengage in telephone interactions with the convenient
wearing of a headset. The system’s implementation
marked a pivotal shift by offering robust support
for tasks traditionally assigned to representatives.
It thereby addressed concerns about overlookedreminders, which resulted in a significant increasein collection rates.
From first users to other industries
The Japanese government’s amendment of Japan’s
Banking Act in 1982 allowed the country’s banks tooffer credit cards as an auxiliary service, and fromthis a wave of card companies emerged. ITFOR’s
increasingly proven auto-call system was adopted
by numerous of these card companies as it evolved
from a simple telephone-based collection system
in its early stages to an exceptional full businesssupport packaged system with document creation
capabilities.

30

ITFOR also responded to the expansion of individual
lending by Japan’s regional financial institutions
with the addition to CMS that it developed toincorporate features tailored to the nuances of
personal loans. Consequently, its auto-call systemgained recognition and has since seen widespread
adoption by various entities, including consumer
finance companies, leasing firms, credit unions, andonline banks.
Our prompt response to Japan’s 1999 Act on Special
Measures Concerning Claim Management andCollection Businesses (Servicer Law) opened newopportunities for us to expand our auto-call system’suser base. We deepened our understanding of debt
collection tasks and collaborated with users torefine the system. And we continue to enhance our
auto-call system by incorporating insights gatheredfrom user meetings to establish it as a servicer
system. Notably, the statutory books that are part ofthat system are included among the Loan Servers
Association of Japan’s statutory book samples. Anda majority of servicer companies nationwide have
implemented our system.
Expansion into credit-related systems for
personal loans heightens our competitiveness
Another of the Financial Systems Division’s chief
offerings is personal loan operation support
system “SCOPE.” ITFOR’s venture into the screening
business commenced with the development of asystem for personal credit information inquiries thatwas the personal credit information inquiry system“MICS2.0.” We built on the expertise that we’d gained
from developing our debt management system toexpand into screening systems for nonbank installment sales of individual products. Ultimately, ourefforts culminated in our highly competitive Scopesystem.
We in addition developed the web-based loan application system “WELCOME” that empowers our
systems to manage such crucial tasks in individualloans as online applications, screening, and credit
information inquiries. This furthers our competitiveness in systems for the personal loans business.

At every phase, be it requirement definition, systemdevelopment, or post-system deployment, ITFOR
leverages the strength it derives from the accumulated business insights and expertise of its sales
and engineering teams. ITFOR’s competitivenessstems from systemization and from its willingness
to suggest the redesign of its customer’s operations.
This translates into high added value that extends
beyond mere problem-solving to serve as a sourceof ITFOR’s competitiveness.

One-stop solutions for lending services

A hub for information and for generating
business opportunities

Web-based loan
application
systemITFOR supplies its systems to financial institutionsin 46 of Japan’s 47 prefectures, overwhelmingly toregional financial institutions. We also regularly holduser meetings for our nationwide customers. User
meetings that focus on various of our packaged
systems draw participation from many frontline
users who are responsible for the tasks involved inthose systems. This leads to lively exchanges. Our
user meetings thus encourage customer interaction
and grant us insight into challenges faced by ourfrontline users.

Personal credit
informationinquiry system

ITFOR has for several decades been a steadfast
partner to numerous financial institutions. This has
made possible cross-selling initiatives for various ofour divisions and presented us with opportunities toprovide systems to entrants to the banking sector
from diverse industries.

Implementation

millionFinancial Systems
Division
fiscal 2022 net sales

Delinquent debt
management
systemPersonal loancollection
management
systemStrengths

Weaknesses
・High barriers in major financial institutions,with a strong inclination toward
proprietary systems

Opportunities

Threats

・Exploration of untapped potential in mega-banks,
nonbanks, and legal-related offices

・Trend toward internal expansion andinsourcing of systems engineers (SE) in
financial institutions

・Expansion of system solutions into business areas
beyond existing packaged systems, leveraging theSalesforce platform

Claimsmanagement
systemTCS Servicer system

・High market share in systems for loan operations
among regional financial institutions
・Abundant packaged systems that enable
comprehensive proposals for loan operations

Guarantee
management
systemDebt management

The customer interview on pages 16–19 of thisreport makes clear that when regional financial
institutions ponder engaging in local economic
revitalization, ITFOR’s long involvement with themgives it an advantage in providing solutions fasterthan anyone else. Many regions and their businesses thrive as a result of regional financial institutions
efforts and their implementation of our systems.
So ITFOR’s advocacy of regional revitalization
continues to grow in scale and substance. The
Financial Systems Division plays a leading role inthis regard as a driver of growth for the company.

¥4,966.1

Personal loan
operation support
systemStrategyⅠ
Cultivate and utilize talented
individuals with knowledgeof customer needs to introduce
services

Strategy Ⅱ
Expand solution offerings
among financial institutions
and cultivate customers in otherindustries

Financial System Division
net sales
System Development and Sales
segment net sales (¥10,611.0 million)31

7. Value Creation Strategy
Payment Systems Division

Retail EC Systems Division

Contributing to a cashless society with uniquedevices and systems

Adapting systems and services in response toretail industry needs

Kazunori Kono

Hirotaka Oeda

Director and Executive Officer,
General Manager of Payment Systems Division

Director and Executive Officer, General Manager of Corporate
Strategy Department and Retail EC Systems Division

A single terminal for all payments
The Payment Systems Division offers cashless
payment platform “iRITSpay.” That platformcomprises terminals and a payment center thatprocess all payment methods.
Customarily, stores must employ different terminals
to handle different payment methods, such as credit
cards and code payments. The iRITSpay terminalfrom ITFOR obviates that need. This single terminal
accepts all payment methods, including credit
cards; debit cards (including those issued abroad);
code payments; and electronic money payments.
This enhances consumer convenience. And it
improves operational efficiency for businesses,
reducing space requirements near the cash register,
shortening employee training time, and lessening
the tasks in sales accounting. The Payment System
Division’s support of iRITSpay, moreover, spans
implementation to operation and maintenance. The
division even offers iRITSpay users a dedicated callcenter.
ITFOR, meanwhile, has developed its own payment
terminal application and payment center. It gives us
a significant advantage in flexibly accommodating
new payment methods. Since its founding, ITFOR
has built a track record of furnishing core systems
to retailers. The company continues to tap theinsights it has gained particularly in utilizing newtechnologies to do so. We seek to contribute further
to rapidly advance a cashless society.

¥1,543.3

million

Focused on retailers and financial institutions
and consumers
Customers that adopt ITFOR’s cashless payment
solution are of two main categories. The firstcomprises stores, including retailers; service
providers; transportation companies; municipalities;
and others that facilitate cashless transactions.
The second category comprises mostly cashless
payment service providers, particularly financial
institutions.
For both categories, ITFOR emphasizes B2B2C
services. The C refers to consumers that are not
the service provider businesses signified by the B
in B2B. Our intent is to provide the best services
tailored to the needs of end-use customers using
the iRITSpay platform in recognition of the importance of maximizing consumer convenience, asconsumers are the primary agents of consumption
behavior.
The transition to cashless transactions is rapidly
gaining momentum in Japan, in line with global
trends. This is attributable in part to the heightened
demand, driven by the spread of COVID-19, forinteractions that are not face to face and that do
not involve contact. It also owes itself to the widely
recognized benefits of reducing the operationalburdens and risks associated with managing cash.
ITFOR is capitalizing on the accelerating trend in
cashless transactions by positioning itself as aunique cashless platform provider. Our expertisein the financial and the retail and distribution industries places us in good stead to make an especiallymeaningful impact.

Strengths

Weaknesses

・iRITSpay terminal, capable of supporting the
IT industry's largest number of payment methods

・Barriers to expansion into major retailchains as an independent entity

・Multifunctional payment terminals fromin-house development expertise・Terminals sourced from Taiwan, raisingconcerns about contingency issues andexchange rate risks

・In-depth knowledge and understanding offinancial institutions and retail businesses

Opportunities

Threats

・Expansion from multi-payment to multi-service infinancial institutions and the retail industry

・Demand for high-spec, cost-effective
solutions due to new technologies,
such as cloud and AI

Payment Business・Acceleration of trends in contactless transactions
Divisionand cashless payments
System Development
and Sales segment net
sales (¥10,611.0 million)

・Intensified competition amid
acceleration of the cashless economy

Explore opportunities throughunique marketing channels,
such as regional financial
institutions

Whenever changes occur in tax or accounting
regulations and procedures, companies must
adjust accordingly. A core system that promptly
addresses such changes, strategically and efficiently, is essential. To this end, ITFOR constantly
hones its capabilities to construct the requisite coresystems and meet the increasingly diverse needs ofcustomers amid escalating shifts in the businessenvironment. ITFOR views changes as business
opportunities and is especially active in driving DX
in the retail industry.

ITFOR developed the first POS system for major
department stores in Japan in 1975 and has sinceforged relationships with department stores of all
sizes and with the retail industry overall.
Our Retail EC Systems Division provides the retailmission-critical system “RITS” (Retail Information
Technology System for Strategic Management)
used primarily by regional department stores andretail superstores. Released in 2004, RITS has overits 20-year history become a comprehensive package
covering everything from product management tosales, customer management, in-house credit, andforeign trade and customer loyalty programs. It thus
is a packaged system as comprehensive as those
employed at major department stores but that wedeliver it at an affordable cost.

Common customer challenges
understood and solved
The Retail EC Systems Division’s customers, suchas department stores and specialty retailers locatedparticularly in regional cities, have cultivated close relationships with local financial institutions. Regional
financial institutions, of course, are mainstay ITFOR
customers, so they represent a vital conduit for the
Retail EC Systems Division’s marketing to regional
retailers.

RITS also grants us further competitive advantages over other companies in our industry. It canbe delivered in modules that offer only the selectfunctions desired by customers. In addition, RITS
features standard integration with the iRITSpay
payment terminal offered by the Payment Business
Division, which facilitates easy handling of inboundtransactions.

Also of enormous benefit are ITFOR’s user meetings.
They are a platform for customer interaction andexpose for ITFOR and its Retail EC Systems Division
the challenges faced in common by retailers.
Difficulties, for example, in adapting to the invoicesystem that we introduced on October 1, 2023,
became a topic of discussion during user meetingsand prompted us to make immediate adjustments
to ease retailers’ implementation. Besides responding in timely fashion to timely needs, we pursue
regular service updates. We will as such continue
to support the resolution of challenges in the retailindustry moving forward.

The Retail EC Systems Division has utilized theknowledge gained from the deployment of RITS in theretail sector to extend its offerings with ITFOReC, thee-commerce site construction package. ITFOReC’s
development reflects an ITFOR strength in being
able to collaborate with customers on strategy andoperational design to build an omnichannel systemusing in-house solutions.

Advance develop a payment
app with multi-service
functionalities

StrategyⅡ・Nationwide expansion based on broad customer
base, including regional financial institutions

Payment Business
Division
fiscal 2022 net sales

StrategyⅠ

Core packaged systems to promote
department store DX¥645.3

millionStrengths

Weaknesses

・ RITS Cloud, a total packaged system forregional department stores and retailchain stores・ Inability to differentiate in specificindustries due to the homogenizationof EC system products

・ Customer development in collaboration
with regional financial institutions
・ Synergy with the Payment Business Division

Retail EC
Systems Division
fiscal 2022 net sales
Retail EC Systems Division

StrategyⅠ
Develop packaged systems
aligned with market needs

StrategyⅡ

Opportunities

Threats

・ Capitalize on changes in regulations forbusiness opportunities

・ Frequent revisions and changes in
consumption tax and accounting systems

・ Understand customer needs better
through user meetings

・ Rapidly changing retail businessenvironment

Utilize customer base tobuild a unique information
network

System Development andSales segment net sales(¥10,611.0 million)

32

33

7. Value Creation Strategy
CTI Systems Division

Communications Systems Division

Advancing innovation in society with cuttingedge contact center solutions

Providing infrastructure that supports society
and business operations

Tenpei Ogawa

Satoshi Yumoto

Director and Executive Officer,
General Manager of CTI Systems Division

Director and Executive Officer,
General Manager of Communications Systems Division

Innovative fusion of advanced technology
and business expertise
The CTI Systems Division structures and integrates
contact centers with business systems to help businesses efficiently and accurately execute daily tasks.
For financial institutions, local governments, retailbusinesses, and other enterprises, telephone interactions with customers are a daily essential function of
their contact centers. Our addition to contact center
functionality of such communication tools as email,chat, social media, and now AI reflects accelerated
innovation that bolsters customer convenience andheightens businesses’ efficiency in interacting with theircustomers.
ITFOR initiated sales agent activities for foreign-madecall recording systems in 1999. In the more than 20 years
since, it has evolved to provide ever-more advanced
contact center solutions of its own development insupport of its customers’ business development.

Unique operational experience as a source ofcompetitive advantage
The contact center, essential for building relationships
with customers, is core to the business strategies ofmany companies. It is highly valued for its ability toenhance customer experience and collect valuable
customer feedback. For financial institutions, moreover,the contact center is indispensable in collecting overdue
debts from customers.
Government ministry and agency guidelines on claims
collection are a complex challenge in compliance formany financial institutions. ITFOR has established a¥1,200.9

millionCTI Systems
Division
fiscal 2022 net sales

The automatic call reception system “Robotic Call,” isa case in point. Robot Call is equipped with all of thenecessary functions for collection efficiency. It analyzes
call histories to reflect peak calling times in the call list,
automatically responds to callback requests, and more.

Growth opportunities in technologicalinnovation for altered business environments
Robotic-sounding telephone responses are anathema
to most of us. The COVID-19 pandemic, however, has
expanded the desire to avoid in-person interactions.
Fortunately, advancements in robotics make possible
voices of different genders, ages, and qualities approaching natural speech, and this has made automatedcall systems more palatable.
These advancements are especially welcome as
Japan’s workforce declines and causes chronic labor
shortages. The demand for robots in contact centers
is steadily increasing. Expectations are that the useof robots with advanced decision-making capabilities
powered by AI will only grow. Widespread work-stylereforms to suit changing lifestyles make inevitable
growing demand for AI-driven omnichannel support
beyond traditional phone and voice communication to
include email, chat, and social media.
The CTI Systems Division improves contact centerswith ITFOR’s increasingly innovative technologies. The
division’s omnichannel strategy involves the implementation of AI and robots to respond to changing lifestyles.

Strengths

Weaknesses

・Proposal of comprehensive packages in cooperation withother divisions to long-standing customers

・Transactional risks in doing businesswith overseas companies

・Knowledge and experience supported by a wealth ofsuccessful implementations

Core business division underpins
other ventures
Our Communications Systems Division has been in
existence since our establishment in 1972. ITFOR got its
start by importing advanced communication equipmentfrom the United States and Israel, enhancing it withengineering expertise, and then selling that equipment
domestically. In the early 1970s, the division ventured
into distributed computing even with the Internet in its
infancy. In the years since, the division has cultivatedand applied technical expertise to develop communication packages. Today, the Communications Systems
Division underpins the infrastructure of each of ourbusiness ventures.

Accumulated expertise balances security
and cost performance
The division has applied ITFOR’s accumulated
know-how in its comprehensive Package Cloud service

Application packages provided

Information
security
HardwareStrategyⅠ
Respond to small-scale callcenters through cloud-based
shared services

Opportunities

Threats

・Innovation of established systems by applying AI andcloud technologies

・Industry restructuring with emergenceof new entrants

・Promotion of DX to address chronic labor shortages

・Standardization of foundational
technologies in call center systems,
making differentiation difficult¥1,210.0

・Expansion of Robotic Call

System Development and Sales segment
net sales (¥10,611.0 million)

・Gaps in prices customers seek andoffered prices

Disaster
preparedness
Network

Customized tools protect social infrastructure
The cybersecurity market is expected to grow enormously, and the Communication Systems Division iswell positioned for that growth. The division offers
the cybersecurity service “Ransom Guard,” a blend ofcybersecurity tools from Taiwan, and incident response
functionality and cyber insurance customized for small
and medium-sized enterprises. The division is also
registered for the Cybersecurity Supporters Services facilitated by Japan’s Information Technology Promotion
Agency (IPA), which should further boost users’ confidence in the security of its offerings.
Since 1988, the division has focused on furnishingcustomers with advanced communication equipmentfrom Israel. That equipment is integrated with ITFOR’s
unique technological solutions that meet the requirements of a range of clients for communicationequipment, including communication carriers andsocial infrastructure companies. The division’s support
for the interconnectivity of society is borne out in its
support of social infrastructure with diverse solutions
that foster an environment where everyone can live inpeace of mind and safety.

Strengths

Weaknesses

・Advanced technologies and expertise supporting
long-standing customers, divisions, andsocietal infrastructure

・Sudden withdrawal of overseas vendors

・Customization of excellent overseas solutions to fit
Japanese specifications

・Impact from international geopoliticalsituations

Communications
Systems Division
fiscal 2022 net sales

Opportunities

Threats

・Further customization of cybersecurity products fromadvanced countries, such as Israel and Taiwan, to fit
Japanese specifications

・Cybercrime, with growing risk of
information theft and increasing ransom
demands

Communications
・Rise of significant potential in products for
Systems Division
telecommunication carriers
System Development
and Sales segment net ・Acceleration of efforts to defend societal infrastructure
sales (¥10,611.0 million)

StrategyⅠ
Deploy unique andspecialized solutions

・Provision of a secure and safe IT environment throughcybersecurity tools

StrategyⅡ
Develop proprietary products
incorporating other systems

Cloud
Operation andmaintenance“IPaC.” ITFOR IPaC implements everything from ITFOR’svarious packaged systems to network construction andoperation. To meet the increasingly diverse needs ofour customers, we provide them with multiple solutions
and at reasonable prices. These include solutions forfinancial institutions, e-commerce businesses, and distribution customers. Those solutions, moreover, employ
safety standards, including FISC security standards, that
ensure that our services can be used with confidence.

Infrastructure supporting services

millionCTI Systems Division

34

track record over several decades of helping financial
institutions overcome that challenge. We exhibit experience and know-how that significantly surpasses thatof other competitors in the packages that we offer thatcombine the tasks related to collection.

・Intensified competition in the
cybersecurity industry

StrategyⅡ
Provide societal
infrastructure to safeguard
local communities

357. Value Creation Strategy
Technology Development Department
Public Systems Division

Assisting customers’ DX through enhanced
development and human resources

Resolving municipal challenges throughsystem solutions and BPO

Koji Sakata

Kenji Kobayashi

Director and Senior Managing Director,
General Manager of Technology Development Department

Director and Executive Officer,
General Manager of Public Systems Division
Full support for DX
Development expertise and the power of
empathy facilitate municipal DX

Focus on investing in human capital throughdigital BPO

The Public Systems Business Division provides
debt management and educational support
solutions tailored for local governments and educational bodies through the ITFOR-developed Civic
Administration Relationship Service “CARS.”
The division was originally part of the Financial
Systems Division but was spun off to apply ITFOR’s
delinquent loan management system to assist local
governments with such of their responsibilities as
the collection and notification of overdue taxes,
national insurance dues, and other outstanding
debts. That system has been adopted by 28 prefectures and 110 organizations, and the division plansto broaden its scope as an educational support
solution for educational bodies.
Staff at most local governments spend inordinate
time pursuing overdue payments. The Public
Systems Business Division’s help in digitizing
business processes improves operational efficiency
and collection rates. And that allows staff to concentrate on other responsibilities that contribute to
the welfare of residents.
The division has also developed and implemented
systems for numerous regional educational bodies.
These systems cover student registry management,
school attendance support, meal fee management,
and more tasks. Student registry management
and school attendance support are among the 17
standardized tasks that the Japanese government
has mandated to be addressed by fiscal 2025. The
division’s skill in visualizing and in streamlining suchtraditionally cumbersome tasks with its systems iscritical to realizing smart municipalities.

¥368.1
millionPublic Systems
Division
fiscal 2022 net sales

ITFOR emphasizes its BPO services as a means todevelop human capital. This provides ITFOR witha distinct advantage, as the cultivation of humancapital in BPO is often overlooked by its competitors. We comprehensively educate and train
staff from the local communities we serve for thediversity of skills required in BPO. Part of this sees
us regularly organize such activities as telephone
response contests to nurture highly skilled professionals who are well-versed in the demands of our
BPO operations.
Customers often express concerns about the costof our BPO services, especially in the first year of
implementation. We assure them that by providingthem with pre-trained staff proficient in every
aspect of BPO, we are able to deliver high-quality
services that save them the time and cost of hiringand preparing staff for the host of required BPO
functions. This often leads to long-term contracts
for our BPO services.

Strengths

Weaknesses

・Digitalization of operational processes inadministration and management systems of
local government and educational bodies

・Profit compression in the first year ofcontracts because of education and skills
reinforcement needs of call center
personnel

・Leadership in BPO, especially in call centers,with differentiation through digital BPO

Opportunities

Threats

・Discovery of projects from local businesses

・Intensified competition in areas such as
notification centers and office support services

・Exploration of future projects throughworkshops with officials from local
governments and educational committees

Public Systems Division
net sales
System Development and Sales
segment net sales (¥10,611.0 million)

36

In engaging with customers, including local governments and educational bodies, the division
frequently and with few exceptions sees their needof BPO services, such as a collection center. The
division provides a combination of ITFOR-developed
systems and BPO services in an all-in-one digital
BPO solution to meet that need, streamline
customers’ operations, and promote local employment as explained below.

・Uncertainty about differentiation after local
government system standardization

StrategyⅠ
Further strengthen educationfor BPO personnel

Strategy Ⅱ
Utilize private-sector
expertise

The Technology Development Headquarters
consists of the Software Division, which proposesand develops systems tailored to customer needs,
and the Infrastructure Systems Division, whichhandles networking and security. In addition, theheadquarters has three departments that support
ITFOR’s business divisions.
The Technology Promotion Department handles
education and the acquisition of new technologies.
The Quality Management Department objectively
and systematically manages development
processes until product delivery to ensure quality.
The Customer Support Department stabilizes theoperation of systems by promptly and accurately
responding to customer inquiries.
The Technology Development Headquarters thus
has in place a robust framework to comprehensively
advance customer DX efforts.
Balanced internal-outsourcing ratio forbetter in-house development capabilities
ITFOR is an independent primary contractor thatprioritizes collaboration with clients and the powerof empathy. That approach enables us to build
advanced technical expertise and a deep reservoirof experience and know-how for system development. To be sure, much of that development
involves partnering with external companies. But
we recognize the shortcomings of excessive
dependence on such arrangements in hindering
our accumulation of expertise and improvementof on-site skills.
We have an ambitious goal to achieve a one-to-one
ratio of in-house work to outsourcing by 2025.
Achieving this balance will, we anticipate, reducedelivery delays and specification discrepancies
and strengthen our in-house development capabilities. This, in turn, will enable us to deliver thehighest-quality, most-competitive products.
Engineers capable of leadership in business
ITFOR has since its founding viewed the engineers
involved in technical development as valuableassets and remains committed to their professional development. The Technology Development
Headquarters conducts various initiatives to uphold
this commitment.
To ensure the progress of projects, for instance,
the headquarters prioritizes engineers who holdthe internationally recognized Project Management
Professional (PMP) certification. It allocates thebudget and establishes the framework to facilitate attainment of this certification. At year-end
fiscal 2022, 18.4% of ITFOR’s engineers were PMP
certified. The aim is to surpass 20% by the endof fiscal 2023.
New employees, meanwhile, are given approximately
7.5 months, or more than 1,000 hours, of education.
Second-year technical staff are allocated 3% of
their time for educational purposes, and the intent
is to increase this to 5%—equivalent to one day
per month—in fiscal 2023.
This approach to training enhances technicalcapabilities and sharpens abilities in responding
to customer needs. Cultivating personnel capable ofproviding swift and accurate responses ensures, inturn, the building of long-term trust with customers.
Adaptation to changes in technology
In recent years, tools such as low-code and no-code
have emerged to enable system construction
even with limited development skills. In thisevolving environment, the challenge for ITFOR isto undertake ever-more selective initiatives andto allocate personnel and time to those initiatives
with ever-greater care.
This is all the more true given how quickly andcontinuously the IT landscape births new technologies. No matter how leading-edge are our innovations, we always face their swift obsolescence.
ITFOR’s strategic decision-making thus involves
evaluating necessity, industry trends, and prospects
for a proactive stance in adopting or developing
technology. Essential to this stance is to avoid
overlooking technologies even when they seemfruitless.
Innovation requires a consistent commitment to
exploring frontiers. And ITFOR intends to makesubstantial investments in acquiring and mastering
emerging technological skills for the sake of thehighest levels of innovation.
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