Medium-Term Management Plan
Medium-Term Management Plan Evolution 2026 (FY21.06–FY26.06)
In the fiscal year ended June 2021, the TechnoPro Group largely achieved the quantitative targets from the previous medium-term management plan [ - Sustainable Growth for a Bright Future - ] (July 1, 2017 to June 30, 2022), completing the plan one year ahead of schedule.
In response, we have newly calculated our desired vision tracing back from 10 years from now based on observations regarding changes in societal need on the medium to long-term, advancements in our unique capabilities, and the role our Group should play. This vision has become the foundation of the new Evolution 2026 medium-term management plan, beginning in the fiscal year ending June 2022 and running for five years (July 1, 2021 to June 30, 2026).
The environment around us is in a state of rapid flux, from changes in technology such as the whirlwind adoption of digital technologies, a domestic labor environment facing structural issues of engineer shortages, further advancements in globalization, and the changes in society's needs and customer issues against these backdrops.
However, the TechnoPro Group enjoys a number of strengths it has built up over many years of business, including the trust of a great deal of customers, technical knowledge transcending industry frameworks, the ability to make proposals linking technical capabilities to problem-solving, and industry-leading capabilities in fostering human resources as well as career support.
We believe that it is time to evolve the strengths and business models that we have cultivated through our core engineer dispatch business, with the goal of flexibly adapting to the ever-changing external environment and meeting the needs of our customers.
In the process of this evolution, we seek to contribute to the realization of a sustainable society. We will achieve this by establishing a virtuous cycle in which we bring together talented engineers, who then provide value to society through co-creation with customers, which solidifies trust from our customers, subsequently allowing us to demonstrate even greater problem-solving capabilities.
The core business of the TechnoPro Group is the domestic dispatch of engineers. Rather than a single-minded drive to grow scale, we will strive to improve the quality of this business while establishing competitiveness in domains highly connected to this core business, i.e. our solution business, our engineering professional development business, and our DX promotion business. By taking these and other business transformation-centric actions focused on evolution in technology, we seek to expand our businesses in a sustainable way and transform our business models so that we can rapidly adapt to changes in supply and demand over the medium to long term.
Medium-Term Management Plan Promotion System
We will take strong action to promote our medium-term management plan through new organizational structures corresponding to each of our core business, solution business, engineering professional development business, and DX promotion business. Through close coordination between each business, we will further enhance our unique TechnoPro Group strengths and enhance our presence in the technical services market.
Amid the shift to digital technologies across society and a whole and tremendous demand for engineers, we expect that there is still plenty of growth to come for domestic dispatch of engineers, our core business. However, given the possibility of slowing growth due to medium to long-term risk factors such as accelerated technological innovation, automation and overseas transfer of development, and difficulty in recruiting engineers, we will rigorously pursue evolution in our core business in order to respond to changes in customer demand and secure capable engineers. By doing this, we aim to differentiate ourselves from industry peers and establish competitive advantages.
By capturing the rapidly expanding demand toward digital technologies in the new normal era and combining digital element technologies and conventional technologies both inside and outside the Group, we support customers in solving various technical issues by providing optimal solutions.
We will establish a new Center of Intelligence (COI) organization to accurately evaluate and ascertain trends in technologies, solutions, and markets not only in Japan but also around the world, formulate Group solution business strategies applicable on a global level, and promote the realization of organic growth. It will also select M&A targets and alliance partners.
*The Solution Business comprises services in the area of cutting-edge digital technologies that customers are facing problems in dealing with, as well as services using conventional technologies, where the engineers stationed at customers acquire the projects themselves. (As a definition, the term also includes conventional technology-related project-type services acquired by our sales staff.)
Engineer Training Business
The Engineer Training Business commercializes the engineer training process by selling the engineer training curriculum and educational content developed in the Core Business to external corporate customers and individuals. We plan to expand this business as a source of revenue generated from the evolution of the Core Business, while at the sametime contributing to the improvement of the environment in Japan, in which the shortage of engineers is becoming chronic.
DX Promotion Business
In the DX Promotion Business, we will first conduct digital transformation of the Group’s vast amount of information on recruitment, training, work experience, skill development, and other aspects. By accumulating and analyzing market price data on engineers and technical skills, as well as the effectiveness of education and training, we will improve operational efficiency and maximize the lifetime value of our engineers. We will build a business model around this know-how in the medium- to long-term and sell it to our customers.
As a means of accelerating the evolution of our core business, accelerating the transformation of our business models, and achieving sustainable growth, we have set an M&A investment limit of \40 billion yen over the five years of the medium-term management plan. With this, we will aim to acquire digital element technologies and solutions in the IT and DX domains where we expect to face challenges in meeting vigorous demand by simply relying on recruitment and training.
Basic Policy on M&A
|M&A Target||Maintain consistency with detailed business strategies stated in the Medium-Term Management Plan|
|M&A Process||Early involvement by profit-responsible business units and PMI* personnel, ensuring transparency through M&A Playbook|
Following disciplines firmly prevail, and any deviations will be thoroughly discussed by the Board
JPY 40 Bn
|Governance||Strengthen controls to create expected synergy, integration of administrative function to pursue scale economies, and regular monitoring of acquisition rationale at the time of investment and its progress|
* PMI: Post Merger Integration
Revenue Development (including M&As)
|(yen in billions)||FY21.6||FY23.6||2-year CAGR||FY24.6
|FY26.6||3-year CAGR||5-year CAGR|
1. CAGRs for the first 2- and full 5-year are calculated as the average annual growth rate starting from FY21.6 results; CAGR for the last three years is calculated as the average annual growth rate starting from FY23.6 results
2. Revenue contribution from M&As to Solution/Overseas Businesses is expected to be 15bn yen and 15bn yen respectively in FY26.6; OP contribution is expected to be 15% and 15% respectively