FAQ (Search categories)

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  • Why did unprofitable projects occur?

    SHIFT considers that the main reasons behind the unprofitable projects were the difference in understanding requirements with customers, the inability to successfully manage progress, and the inability to firmly penetrate the man-hour management system, which is structured in SHIFT. Going forward, we will learn from the projects and work to improve the status by reviewing the project management system.

  • How much of the cost of office relocation is expected to be incurred in the current fiscal year?

    Since the new office is expected to start its operation from September 2023, major expenses such as rent for the office will be incurred from FY08/24.

  • Are there any visible impact from economic trends?

    There is no particular impact from macro economic environment at present (as of November, 2022). SHIFT tends to be less susceptible to macroeconomic conditions due to the fact that the SHIFT Group has customers in a large number of industries.

  • Does performance-based compensation for sales and account managers affect gross profit margin in the future?

    Under the performance-based compensation system for sales and account managers, a certain percentage is set as a source of compensation based on GP, and compensation for each is set based on individual performance among the compensation source. Please note that compensation for sales is SG&A expenses and that for account managers cost of sales, and the percentage set as a source of compensation is calculated based on historical results. Therefore, this system would not have a significant impact on GPM.

  • What is Kronos?

    By welcoming Kronos and engaging in collaboration with ALH, they will enter into new areas and develop sales in new regions. Kronos’s AI (Artificial Intelligence) solution business is an area that can be expected to grow significantly in the future. According to a survey by IDC Japan, the domestic AI system market achieved growth by 26.3% in 2021 YonY basis, and the CAGR (Compound Annual Growth Rate) from 2021 to 2026 is also expected to be around 24.0% (*). By entering markets that are expected to grow significantly in the future, ALH will work to achieve further growth. Also, ALH has received requests on IT training business recently. In collaboration with Kronos, ALH will not only strengthen and expand its IT training business for B2B, but also develop it for B2C for further growth.

    * IDC Japan “Announcement of Domestic AI Market Forecast”

    Please refer to the link for more details.

  • Utilization ratio fallen in Q3, FY08/22, but did it recovered in Q4, FY08/22?

    As April is the busiest season for recruitment, the SHIFT Group accelerated recruitment toward achieving its full-year recruitment target of 2,400 people. As a result, 917 employees (including new graduates, on a consolidated basis) have joined in the Group in Q3, FY08/22. Therefore, the number of engineers exceeded the number of projects, and utilization rate of Q3, FY08/22 temporarily declined by 2pt. At present, Q4, FY08/22, the rate is generally recovering.

  • On P59 of presentation material, the page contains the words “number of customers × unit price per customer.” Looking ahead, will SHIFT emphasize not only “the number of engineers × the unit price per engineer,” but also “the number of customers × the unit price per customer” as a KPI?

    The SHIFT Group has emphasized “the number of customers × the unit price per customer” as one of its KPI. Looking ahead, as it aims to grow further as the Group, it believes that “the number of customers × the unit price per customer” should be more important.

  • Why did SHIFT decide to changes its reportable segments?

    As of July 31st, 2022, the number of group companies has grown to 32, and it even varies in terms of service areas, sales/employee size, growth rates, business models, and histories since each group company joined in the SHIFT Group. Through PMI activities, SHIFT recognized synergies various ways, including collaborative projects and personnel exchanges between SHIFT and group companies or between group companies themselves. This results in organic growth as the SHIFT Group. Against this backdrop, in order to more appropriately manage the diverse services and business models in the SHIFT Group and to plan for the further growth, SHIFT has decided to change its reporting segments.

    Please refer to the link for more details.

  • Is there any risk that software testing market will disappear, where AI and RPA emerge?

    SHIFT believes that there is no major risk that software testing market may disappear.

    SHIFT considers that software testing operations can be broken down into 80% of tasks and 20% of decisions. Of these, “80% of tasks” is a relatively simple and repeatable tasks, so it may be possible to replace it with the introduction of AI or automated tools. However, “20% of decisions” always requires human being. As a result, SHIFT anticipates that SHIFT’s software testing business will not run out of works for the foreseeable future, although there may be changes in the way it proceeds.
    In addition, to realize a smart society, SHIFT believes it is important to promote the minimization of the testing process. Therefore, by firmly reflecting defects and defect-related information obtained in the current business in the upstream process, SHIFT promotes efforts to build a development process that is “unlikely to happen” and “easy to discover” defects.

  • What are unprofitable projects? What kind of impact did they have in concrete terms?

    Unprofitable projects that affected GP of Q4, FY08/22 are development projects that are handled by our group companies. They had impact on GP and GPM . SHIFT thinks that it is unlikely that the impact will be prolonged as the delivery date for the projects is deteremined (during Q1, FY08/23).