Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Digital Transformation (DX) Strategy

Digital Transformation (DX) Strategy
The History of Sekisui House’s Digital Technology

Approach to Digital Transformation (DX)Sekisui House has developed digital technology mainly in three areas: office work, computer-aided design (CAD) andproduction. For office work, we began operation of SABICS to manage contracts, sales and receipt of payments in
1978, followed by the AES estimate and order system in 1980 and the CANVAS business operations system in
1999, among others. In CAD, we started with a first-generation system developed especially for housing in 1974,
and after going through several iterations we began operation of SIDECS in 1999. We also took the first step into theage of total product proposal presentations through linkage with peripheral systems. For production, we began operation of OES, a system for developing components, in 1980. By developing the building components we use fromblueprint data created using CAD, we have achieved efficient production and advanced quality control at our factories. Through a strategic project we started in 2010, we have used this infrastructure to create a centralized databaseof information on individual customers’ houses from our initial contact with them to after-sales service and remodeling. This platform underpins Sekisui House’s DX.
Sekisui House thus has a history of leveraging its competitive advantages in the industry by introducing digitaltechnology that increases efficiency and helps to manage and improve overall quality in step with changes in thebusiness environment. Today, the IT Design Department plays this role. The former Information Systems Department,
which was part of the Management Division, merged with the CAD/AES Center in 2009 to become the IT Business
Department. In 2013, this department merged with technical IT departments from the Production Division,Development Division and elsewhere, and from 2018 it was made part of the Business Strategy Division. In 2022, as
the IT Design Department, it is working to transform Sekisui House’s businesses to pursue new potential from IT.

We believe that the role of DX in the Sekisui House Group’s business strategy lies firmly within the boundaries of its
businesses. Based on this understanding, we apply digital technologies as a means to transform our businesses.
The extensive customer information and design data we have collected and managed over more than 60 years since
our establishment provide a foundation for the application of these technologies. While using the data we have accumulated to conduct advanced competitive IT that applies AI, IoT and blockchain technology, we also conduct defensive IT, which entails raising operational efficiency through system-level reforms and upgrades in addition to
constructing and stably operating system infrastructure. Furthermore, we are working to improve corporate value by
establishing IT governance for strategic control of risks and returns for each investment in information systems
according to uniform rules.
In recent years, responding to labor shortages and workstyle reforms has become an urgent issue. The COVID-19
pandemic beginning in 2020 necessitated new ways of working, such as remote work, that can be done anywhere.
Our top priority in addressing this issue was speed. As a result of the smooth introduction of new workstyles, remote
work is now firmly established at Sekisui House. We have identified work premised on printed documents and personal seals and are promoting more efficient and effective ways of getting these tasks done. Moreover, as remote
work has brought the effective use of online communication methods to the fore, we are ambitiously working to
improve performance by using such new communication tools not just internally but also for meetings and consultations with customers and suppliers.
We will continue to approach IT from both competitive and defensive strategic perspectives as we promote DX tocreate value for all our stakeholders.

History of Utilizing Information at Sekisui House
1970

1980

1995

2009

2013

2022

Machine Calculation
Section, Accounting
Department

Computer
Department

Information Systems
Department

IT Business
Department

Merger with technical
IT departments

IT Design
Department

Office work
systems

1978

1999

2010–2014

2013–

SABICS begins operation

CANVAS begins operation

Host-based management system forcontracts, sales and receipt of payments

Nationwide rollout of business systemusing relational database and PC software

Strategic individual house
information database project

Company-widerollout of tablets

Restructuring of operations for
Company-wide optimization

Introduction and use of 18,000
tablets for all operations

1974

1999

First-generation CAD begins operation

SIDECS begins operation

2011

Centralized processing at 2D CAD
center for minicomputer operation

Company-wide CAD integration
Design using CAD on individual PCs

SIDECS-II begins operation

CAD systems

Production
systems

Purpose of
information
utilization

1970

1980

1988

2004

SEPIAS begins operation

Linkage to production order data

New component development system

Automated development system begins operation
Design data must be re-input because
CAD is not yet linked to the system

Digital ordering linked to SIDECSCAD integration instead of linkage

Business efficiency and automation

Information systems creation stage

Office automation promotion stage

1980

1990

Competitive IT Strategy (SoE)1

Utilizing customer andbusiness data

Improvement of businessaccuracy and linkage

Company-wide business
optimization

Workstyle innovations/Management and business expansion

Open systems/Analysis anduse of information in eachbusiness system

Centralized information
management and businessrestructuring/ Company-wide
utilization of information

Visualization and Company-wide utilizationof information
Creation of new value from information2010

New technology
applications

2013

Workstyle innovation
Increased productivity

Defensive IT Strategy (SoR)2

2013–

Systems
Maintenance

2000

Innovation

Customers
Greater trust
Increased satisfaction

Employees

Company-wide centralized
management including CAD data

OES begins operation

Management of accounting information

Overview of Our IT Supporting DX

Infrastructure
construction

1 SoE: System of engagement   2 SoR: System of record

Stable operation

Sekisui House
Increased corporate value
Contribution to business90

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

ESG Strategy—DX Strategy

DX Strategy in the Sixth Mid-Term Management Plan

Highlight 1

The Sekisui House Group is working to create new customer experience value, maximize business opportunities andSince our founding, we have been closely attuned to our customers to provide value through housing. Amid thetransform its operations by using wide-ranging data about its housing-related businesses and customers alongsideongoing shift to digital contact with customers, we are promoting CRM with the mission of enhancing the value of theadvanced digital technologies. In particular, under the Sixth Mid-Term Management Plan, we are focusing on cus-

entire customer experience, from housebuilding to after customers take possession. To date, we have establishedtomer relationship management (CRM), the Platform House Concept and DX for rental housing as priority initiatives.

and promoted after-sales services for customers that include the Customer Service Center Owner Desk, which

In CRM, in order to make proposals to customer segments that we have previously been unable to address indetail due to the limits of management resources, we will take a scientific approach to sales activities and create newcustomer experience value by analyzing a diverse range of existing customer data in order to contribute to customer

Customer Relationship Management (CRM)

accepts inquiries 24 hours a day, 365 days a year, and the Smart Inspection system, which uses multiple advanced
devices for housing inspections. Through such services, we strive to enhance customer satisfaction.
Under the Sixth Mid-Term Management Plan, we will focus efforts on initiatives to further enhance experience value
for customers considering housebuilding in order to increase the effectiveness of our proposals and efforts to reach cus-

happiness and strengthen our earnings power.
Under the Platform House Concept, we will install housing with numerous services centered on health, connectedness and learning as we accumulate and utilize living environment data to provide customer happiness.
In DX for rental housing, we will transform experiences for customers considering moving into our Sha Maison

tomers. Specifically, we plan to accumulate and improve the usability of such data as the digital responses of customers
when approached through digital promotions, as well as their display house visit history. This will enable us to scientifically analyze their latent and apparent needs in order to propose optimal solutions and thereby efficiently secure orders.

rental housing by using blockchain and other digital technologies to digitize and move various procedures online,from property searches, tours and move in all the way to move out. By doing so, we aim to enhance customer con-EmergeDiscoverCompareBelieve

Accomplish

NurtureAdvocate

Demand for housing
acquisition andrebuilding emerges
in such life stages asmarriage, childbirth,child rearing andretirement.

People begin gathering information
regarding interiors,
layouts, etc., to discover their ideal
home.

People compare andexamine housebuilders
based on their reputation, impressions of
their staff and the balance between the pricing and genuine valueof houses they provide.

People build confidence in a particularhousebuilder after
making comprehensive
judgments about thestaff and the affinity of
its proposal with theirown value system,budget considerations
and family needs.

An agreement issigned to determine
design, specifications,construction period,
etc., as future homeowners have growing
expectations for life
with their new house.

Homeowners nurture their housing via
maintenance andremodeling so their
attachment grows
over the passage oftime.

Homeowners recommend the valueof our brand to
those around thembased on the happiness they have builtwith their housing.

venience and our operational processes.
To realize these three DX strategies, we will need to utilize not only the various data that exists within the Group,
but also external data from third parties. As such, we will build a foundation for DX from the perspectives of databases, rules (operations), and human resources to enhance the efficacy of each strategy.
Customer relationship management(CRM)• Strengthening our earnings power bytaking a scientific approach to sales activities• Creating new customer experienceand value by analyzing a diverse
Highlight 1
range of existing customer data

Platform House Concept

DX for rental housing• Installing numerous services• Accumulating and utilizing living
environment data
Highlight 2• Utilizing blockchain technology to establish data linkages with partner companies• Introducing electronic procedures
while enabling self-guided
Highlight 3
property tours

An approach that unearths
latent needs and promotes
personalization and appeal

Scientific analysis of customer
needs to deliver optimal
solution proposals
Digital approach

Promotion/
Mass communications

Utilizing diverse data from the entire Group and third parties

Web

YouTubeCommercials

In-person approach

Instagram

Web

News

SNS

Seminar
Display Home

Event

Support to be extended
until completion anddelivery
DigitalapproachSNS

Provision of customercentric services that help
nurture beloved houses

Digital approachIn-person
approachIn-person approachShow room

Web

Construction site

SNS

Periodic Inspection
Remodeling

Event

Foundations for realizing data utilization
Digital technologies aimed at resolving issues arising from the labor-intensive nature of the industry

Developing an integrated
customer database

Ensuring robust security andIT governance on a global basis

Nurturing digital specialists capableof achieving operational improvement and creating new value

Integrated customer database
Needs
database

Visitordatabase

Consultation
database

Building
database
Specification
database

Maintenancedatabase
Remodelingdatabase

Lifestyledatabase

Living environment database91

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—DX Strategy

Highlight 2Highlight 3

Platform House Concept

DX for Rental Housing

As a core initiative for our global vision, we are promoting our Platform House Concept to help residents achieve hap-

Our DX for rental housing refers to the use of digital technologies across all processes related to the Sha Maison rent-piness in the era of the 100-year lifespan.

al housing customer experience from move in to move out in order to enhance resident experience value andIn services focused on connectedness, we offer PLATFORM HOUSE touch, a smart home service installed in

improve operational efficiency.

housing. Using intuitive controls based on a diagram of the house’s floor plan, users can check whether doors and

For the property search phase, we will reinforce DX for the Sha Maison property information site for prospective

windows are closed and locked to prevent crime, get alerts of heat stroke risk from humidity sensors and respond bytenants to improve convenience. For the subsequent property tour phase, we are implementing proof-of-concept tri-

remotely operating air conditioners from outside the home, improving living convenience. This service has been wellals of self-guided tours to better meet the diverse needs of prospective tenants. For move in, we aim to shift all pro-

received by customers. In health-focused services, we plan to install HED-Net, an in-home early detection network

cedures online, including allowing customers to apply electronically, using IT to provide legally required explanations

for acute illnesses, in homes going forward.

of important matters, and signing agreements electronically. In addition, we will promote inter-company data linkages

Under the Sixth Mid-Term Management Plan, we will provide highly convenient services that connect homes andusing blockchain technologies for utility and IT infrastructure service applications, such as water, gas and Internet, tofamilies by applying IoT and AI functions to our accumulated big data on housing. At the same time, we plan to add

realize fully online, one-stop procedures. After move in, we will offer a range of procedures and services throughsuch services to the offerings of Sekisui House Remodeling and roll them out to GRANDE MAISON condominiums.

tenant apps. Finally, for move out, we will enable tenants to handle all move-out procedures online.
By thus advancing DX across all processes from move in to move out, we will further enhance the Sha Maison brand.

Installing service after service

Significantly transforming customer experiences and operational process by using digital technologies todigitize and move online various procedures and realize self-guided tours
1st installation step

2nd installation step

3rd installation step

Future installations

Customers considering moving
into rental housing
Property searches

Floor plan-linked home remote control
Floor plan-linked self-monitored home security
Floor plan-linked living environment monitoring

Curation of services related
to health, connectedness
and learning

Fifth Mid-Term Management Plan: Starting from detached houses

PFH System
Data Lake

Edge computing
Strengthening in-home
information security

Big data only possible
with a housing
manufacturer

Analyzing accumulated
data and feeding itback to individuals andfamilies based on
scientific data analysis

Health services
HED-Net, preventive medicine,
in-home medical care

Sixth Mid-Term
Management Plan:
Sekisui House Remodeling
Sekisui House noie
GRANDE MAISON
Expanding to othernon-residential businesses

We will continue to increase services
to acquire detailed data on life stage
changes, lifestyles, and residential
logs within each residence

Visiting thesite with thesmartphone

Unlockingthe property
with thesmartphone

Touring
the home

Self-guided property tours using smart locks• Meeting diverse tour needs and contactless needs• Solving issues related to labor-intensive operations
Testing issues and expected effects throughproof of concept (PoC) trials
Target	Nationwide high-price properties
under management (around 4,000
units)
Overview	Testing and building schemes tomove online procedures and operations related to rental applications

Make home thehappiest placein the world
Strengthening the Sekisui House brand (area expansion)

IT-based
explanationof importantmatters

Electronic
agreement

DX of applications
and agreements

DX of property tours

Smartphonebased reservation forhome tours

Further enhancing convenience and providing user services, such as search forroom vacancies, using thehome search site shamaison.
com

Electronic
application

Home tours

DX of home searchesNEXT STEP
External sales of nonSekisui House houses,
condominiums and otherproducts on a trial basis

Home tour
reservations

Tenants (families) livingin Sha Maison

Status	95 self-guided tours conducted, 20%
application rate
(as of December 31, 2022)

Latent customers in each of
the Company’s businesses
Move in tostable home life

Move-out
procedures

DX of procedures andservices during residence

Blockchain
Secure data links
made withcustomer consent
Government andother companies• Service
procedures• Move-in
procedures, etc.

DX of move-out procedures
and cleaning fee settlement• Reducing tenant burdens• Acquiring data related to moveout destination• Maintaining customer engagement through functions that canbe used after moving out

Applicant data(name, new address, etc.)
Inter-company
data linkage

Move out

Tenant apps withdiverse functions• Linked with call centers• Strengthening responsiveness to tenants and making operations more
efficient• Providing Company product data attuned to eacharea

Enhancing customer
experience value

Creating business
opportunities for the Group• Maintaining relations with customers who are fond of Sha Maison• Accumulating data through continuous use of residential services• Appealing to those consideringbuilding or buying residences(CRM to realize Group synergy)

Creating business
opportunities

We participate in inter-company data linkage using blockchains and work to create new value through open innovation with different industries.

92