NEC's SI business shifting to "DX offering"-ask Vice President Sakai

　NEC shifts the system integration (SI) business to the "DX offering" model.The company plans to break away from the man -hours of the monthly manual and use a high value -added service type that supports digitalization, including business reform.Achieving the numerical target of the medium -term management plan, which has 3.5 trillion yen in sales in FY2025 and 300 billion yen after adjustment, seems to be greatly affected by the SI service that earns nearly half of profits.We asked Mr. Kazuhiro Sakai, Deputy President of Executive Officer and CDO (CDO), the leader of the company's SI business.

Why did --nec stopped selling SI services and profits since 2012?

Sakai (hereinafter referred to as): Because it was an organization for each account such as enterprise and public sector.However, considering the business portfolio from the profit structure, if you do not assemble on an asset base, you will not be able to invest well.Therefore, in the information (IR) of investors (IR) the other day (September 15, 2021), we published the performance of the domestic IT business (consisting of products, SI, service, and maintenance).I think on the horizontal axis, including the responsibility system.

-A announced sales of the domestic IT business in 2020 will be 1,333 billion yen (expected in 2021 is 1,350 billion yen), and the operating margin after adjustment will be 8 % (9 %).Although the composition ratio by product (hardware), SI, service, and conservative models was not disclosed, about 40 % of products (SI and service, maintenance) are about 60 % (about 80 billion yen).Say.

　The annual average growth rate of IT businesses is expected to be 2-3 % (the target in 2025 is 1.6 trillion yen, operating profit ratio 12)..Five%).However, in the IT business, hardware and man -hours decrease, and common base such as clouds and consulting will increase.The challenge is that there are many work based on the number of man -hours that sells the number of people.Since the unit price is hardly increased, the sales of SI earned by system engineers (SE) are limited to 400 to 500 billion yen.

-When I heard a lecture with the content of "IT demand, but it is cloudy and it does not have to be made of the app," I heard that I had a sense of problem with the SI service.

　We will organize the contents in 2022 and clarify what will happen to hardware, cloud, maintenance, and SI value in the future.Then simulate sales and gross profits (GROSS Operating Profit) to consider human resources and investment.This is to increase productivity as the population declines and increase sales and gross profits.

-In 2016, when he was in charge of the entire SI service, he first intentionally proceeded with the cloud.He hears that he is also working on digital human resources, such as artificial intelligence (AI) and security, to break away from the man -hours.

　In the 2020 IR, we announced shifts to proposed and value -provided types and started preparing.Depending on each individual's skills, investment costs are incurred, but if DX offering increases, profits will increase.DX offering is similar to a solution, and some are common, such as workplaces and office environments, products that support business transformation and innovation by industry, and some are prepared in advance.

　In the past year, we have about 40 kinds of menus.The actual contents will enter the project with the customer, such as the platform (platform), app (Software as a Service , etc.), etc.

-Si business issues are also said to be in the monthly business and multiple subcontracts.Competitive IT vendors have begun to promote in -house production by absorbing system subsidiaries into the main unit, actively promoting the use of SaaS, and reviewing their relationships with partners.The NEC number is 20,000 in the NEC group (thousands of the main unit, 12,000 NEC solution innovators), and 25,000 for partners.What will we do in the future?

　The partner will help you build the foundation and apps.There are assets such as biometric authentication, but the number of jobs to put out people is decreasing.The reason is that speed is required.The project, which had been taking a year and a half before, has been shortened to 3-9 months recently.The cloud is progressing, and we make moving things.We will explain the strategies such as DX offering to partners, and also provide educational programs such as agile development, use of AI and cloud, and digital human resource development.

　Customers are also changing.The number of requests from the business section (LINE of Business) is increasing.LOB is not interested in man -hours and is valuable in speed.Such LOB has a budget and has been involved in projects to about 20 % of the total, and has increased further.We also aim to buy the value of providing, not a monthly proposal.

Isn't the cloud base of --nec weakened?The handling of overseas clouds such as Amazon Web Services (AWS) is increasing.

　In 2016, when I was in charge of the SI service, I thought that NEC clouds would decrease, but that was not the case.In addition to Kanagawa, which provides our own cloud, it also increases investment in Kobe, Nagoya, Chiba and Inzai data centers, and also supports the security evaluation system (ISMAP) for government information systems.I'm not going to loosen it.

　It is separated from public clouds such as AWS.He became an AWS prime partner in 2017, but has grown tremendously since that time.The cloud of the core system has also begun, and the list and shift are proceeding together.In particular, finance is the center, and it has spread to industries such as manufacturing, distribution, and services.

-The IBM of the United States divided SI services, but how about NEC?

　NEC becomes a manufacturer -based SI with a strong strength in making things.For example, edge -based products such as information management systems (POS) at the time of sales will be customer contact and value in the Internet era.We have turned into a solution base that provides such products and SI together.

　Of course, there is no need to make everything in -house, but the strength is to put together as a solution.I don't intend to divide the company.It shakes on the account side, shakes on the product side, and shakes on the SI side, but strengthens vertical and horizontal cooperation (the author's note: Enterprise and other organizations by model and model).That's why I prepared DX offering.