■ISLE ＜3854＞ Business Overview

(5) Backyard Platform “BACKYARDTM”

It is a cloud service (offered from 2023/11) that supports backyard operations that are becoming increasingly complicated every day in a borderless manner beyond business categories such as wholesale/retail, EC, etc., and realizes “BX” not only by improving work efficiency, but also by transforming from the back side. Management functions and cooperation functions compatible with borderlessness and multiple channels, efficiency through automatic processing and data fusion realize centralized management not only within the scope of net shops, but also of the entire backyard business, including all business categories. It is composed of 5 management functions (CROSS/cooperation management, ORDER/order management, ITEM/product management, STOCK/inventory management, and communication/customer service support), and “ONE by 1” * is realized by promoting communication with the backyard team and customers by implementing functions on the themes of “automation,” “visualization,” “custom,” and “communication.”

* The vision of “BACKYARDTM” is to “realize the uniqueness of a one-of-a-kind shop on one borderless platform,” which will become the new standard that “BACKYARDTM” aims for.

Note that “BACKYARDTM” was initially positioned as a next-generation service for “CROSS MALL,” but they are considering developing it for a wide range of industries and business categories, including large enterprises, in response to changes in EC consumption behavior and diversifying needs. Specifically, in addition to net shop management in the EC business category that expands service target enterprises from EC business categories to retail/wholesale/manufacturing, function expansion will continue to be carried out to realize business management that is an issue in the market, such as physical store management in the retail business category, order acceptance management and sales management in the wholesale business category, and inquiry management for customer service support.

3. Cross-Over Synergy Strategy

The company develops and proposes products to support the improvement of management power of small and medium-sized enterprises that require effective use of IT from both the real world and the web, and is promoting a “CROSS-OVER synergy” strategy to strengthen the corporate power of customers. This strategy is the company's unique proposal style, and by comprehensively proposing core business systems in the system solution business (real) that supports work efficiency improvement and web solution business (web) services that support strengthening sales power, an “all-one-stop” service has been realized and a strong synergy effect has been created. Client companies are on an increasing trend due to the “CROSS-OVER SYNERGY” strategy. The number of customers in the 2024/7 fiscal year was 7,449 companies (5,152 companies in the system solution business, 2,297 companies in the web solution business), and it increased by about 18% in the 4 fiscal years compared to 6,342 companies (4,591 companies in the system solution business and 1,751 companies in the web solution business) in the 2020/7 fiscal year, leading to an expansion in stock sales such as maintenance fees and cloud service usage fees.

4. Features and strengths

The company's characteristics and strengths include (1) specialization in the small and medium enterprise market, (2) deep cultivation strategies for specialized industries, (3) high sales and inventory management know-how, (4) a product ecosystem strategy that realizes total solutions, (5) a system where approximately 70% of employees are technical workers, (6) individual customization capabilities, (7) omnichannel strategy for the retail industry, and (8) high ratio of in-house products and services, and (9) partner strategy.

(1) Specialization in the medium and small business market

Since the company was founded, it has specialized in the small and medium-sized enterprise market and has provided unique services, and the ratio of the number of customer companies is about 90% of small and medium-sized enterprises with annual sales of less than 5 billion yen. These efforts were evaluated, and in 2011, they received a special award (Commerce and Information Policy Bureau Director's Award) from the Ministry of Economy, Trade and Industry's “Small and Medium Business IT Management Award 2011". Note (9) As a result of strengthening partner strategies, orders received from large companies are also on the rise, leading to an increase in overall order unit prices (details will be described later).

(2) Strategies for deepening the development of specialized industries

Among the wholesale/retail businesses and manufacturing industries, the strategy of deepening the cultivation of specialized industries, which has been narrowed down to industries with many small and medium-sized enterprises in particular, is also an advantage. We have formed a system that is unbeatable in terms of service and sales power, such as industry-specific system development and industry-specific specialized team structures, etc., leading to an increase in the ability to acquire new customers. Specifically, the fashion industry, the food industry, the medical/cosmetics/beauty products industry, the screw/metal parts industry, and the steel industry are positioned as the 5 main industries, and market deepening is being promoted through the industry-specific package software “Aladdin Office” series, etc.

(3) High sales and inventory management know-how

Since the company was founded, it has continued to provide sales and inventory management software that requires customers to understand their business. We have abundant implementation cases and know-how in sales and inventory management with different management methods for each business type such as manufacturing, wholesale, and retail, etc., and even in sales and inventory management, where management methods are different for each individual company.

(4) Product ecosystem strategies to achieve total solutions

The product ecosystem strategy, which consists of multiple product groups, is also an advantage. It covers all of the internet area of net shop construction/operation support services, the real store/headquarters area for storefront sales management and backyard inventory management, and the real net fusion area where real and web inventory and points are centrally managed, and we develop and provide our own products and services. Furthermore, by combining various products, complex proposals are made, and total solutions for customers are realized.

(5) A system where approximately 70% of employees are technical workers

As of the end of the 2024/7 fiscal year, the number of employees on a standalone basis is 921 (an increase of 48 compared to the end of the previous fiscal year), and the structure is 73% technical positions, 17% sales, and 9% staff. Approximately 70% of employees are technical workers, and support after the system is provided is also important. Going forward, we aim for an organizational structure that promotes human resource development and technical strength enhancement that performs 3 roles (industry/business know-how, core systems, web) per person, and will continue strengthening personnel in the technical department. Meanwhile, they are also promoting environmental improvements and product development to break away from labor-intensive production systems.

(6) Ability to respond to individual customization

Small and medium-sized enterprises have different business operation methods for each industry type or individual enterprise. Therefore, individual customization of software that responds to diverse needs is the basic strategy. As a recent trend in the software development market, companies that can handle individual software customization are on a downward trend, and the decline in order acceptance competition has also led to an increase in the company's profit margin. Furthermore, in order to further improve productivity and improve profit margins, individual customization support has been minimized, and provision as an optional function is also being promoted.

(7) Omni-channel strategy for retail

In the retail industry in recent years, omni-channel strategies that combine physical stores and web stores to realize an environment/distribution channel where customers can similarly purchase products from all channels (sales channels, customer contact points) are becoming popular. Since the company was founded, it has commercialized the fusion of the real world and the web, and has accumulated business know-how and cases that cannot be realized overnight, so it can be said that it has established an advantage that cannot be imitated by other companies even against the progress of omnichannel strategies in the retail industry.

(Author: FISCO Visiting Analyst Masashi Mizuta Exhibition)