LAC Co., Ltd.

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System Integration Services Business

Here we provide an overview of the key characteristics and services of LAC's System Integration Services (SIS) business as well as the business performance of the SIS Business Division, which constitutes a reportable segment.

Business Characteristics

System integration services ranging from infrastructure to applications development

A key characteristic of the System Integration Services business is that LAC is capable of systems development in wide-ranging fields thanks to a background in bank systems development dating back to the company's founding. From mainframes to development of smartphone apps with a focus on web applications, we provide a wide range of platform infrastructure creation and network design and construction services.

Support area

Support area

A solid business base centered on major corporations

A key strength of LAC is that we have a rock-solid business base centered on major corporations, mainly megabanks and other large banks and major insurance companies. We have expanded our business with enterprise customers as well by providing systems development services associated with customers' server use and development on Linux and other open systems.

Whereas customers in banking and other financial industries accounted for more than 80% of our sales in the year ended March 31 2016, we have diversified our industry portfolio by expanding our business with customers in service industries and the information services industry. We have some 320 customers and act as the primary vendor on roughly 50%-60% of our projects. In addition, we engage in efficient project operation by utilizing partnerships (outsourcing).

Type of industry sales

Type of industry sales

Principal Services

Development Services

End-to-end service provision across all processes

LAC's development services support the development of wide-ranging applications and platform infrastructure construction across all processes, including business process analysis, requirements definition, infrastructure design, system design, system manufacturing testing, operation, and maintenance. Our strength lies in the ability to provide end-to-end services encompassing everything from upstream to downstream processes, operation, and maintenance.

Scope of development processes covered by LAC

Scope of development processes covered by LAC

Agile Development Center

Agile development techniques is a collective term for a set of lightweight development techniques for developing software rapidly and adaptively. Since around the beginning of the 2000s, LAC has applied leading-edge development technologies and methodologies to flexibly respond to customer needs in e-commerce and other especially fast-changing fields. Through development work at major customer corporations, LAC has built an extensive track record of projects in which we have accumulated and applied expertise in agile development techniques.

On the basis of this track record, LAC established the Agile Development Center in July 2017. The Center's business activities are focused on outsourced development projects carried out using agile development techniques and the provision of engineer support for customers' agile development teams.

A key characteristic of agile development is that it enables a developer to flexibly respond to circumstances. Conventional development involves developing a system in accordance with an initial plan formulated after detailed examination of all functions to be developed. However, if the business environment changes during development, the completed system may not be able to achieve the intended objectives.

Conventional development

However, using agile development, we initially release the minimum set of functions capable of providing value to customers. Since releasing a small set of functions enables us to proceed with development while confirming whether the functions actually benefit users (customers), it becomes possible to flexibly respond to changes in the business environment.

Agile development

Agile development

Cloud development

As cloud migration progresses, more and more customers deploy system infrastructure in cloud environments and develop services centered on applications. Since LAC has been involved in development using servers since the second half of the 1990s, mainly for enterprise customers, we have undertaken cloud-related development projects since our customers first began migrating from on-premise to cloud environments.

Because of this background, LAC has undertaken not only applications development, but also construction of public cloud-based infrastructure for AWS, Azure, and IBM Cloud. We are also working on the provision of support for hybrid cloud environments involving the combined use of an on-premise server and a cloud, and multi-cloud environments involving combined use of multiple public clouds.

Cloud migration for the purpose of boosting competitive advantage or efficiency improvement is rapidly expanding even in the financial industry, which had traditionally lacked enthusiasm. LAC has worked since 2018 to develop and strengthen an organizational structure to enable the stable, flexible provision of cloud engineers and is seeing a sharp increase in the number of development projects in today's increasingly expanding cloud environments.

Overview of Business Results of the SIS Business Division

Development services that play a key role in systems development are the cornerstone of the SIS Business Division, accounting for 61% of net sales in the fiscal year ended March 31, 2021.

As in the SSS business segment, hardware and software sales and IT maintenance services are businesses involving the sale and maintenance of equipment sourced from other vendors. The scale of the server equipment and network equipment sales business is shrinking due to miniaturization of equipment and other factors. Furthermore, demand is contracting as use of cloud-based servers progresses. Although these are not high-priority businesses, there is a certain level of demand and LAC aims to win orders for update projects.

Solutions services include the data center business of subsidiary AXIS Co., Ltd. and new businesses unconstrained by the boundaries of existing businesses, in which we engage to sow seeds for future growth. One example of these new businesses is Japan Current Co., Ltd.'s digital marketing services that utilize artificial intelligence.

Composition of sales
Composition of sales
Sales of subsegments
Sales of subsegments

Business Performance Highlights (Most Recent Three Years)

  • Year ended March 31, 2021
    Sales increased primarily due to the expansion of solutions services tailored to teleworking and multi-cloud development-related demand, and the expansion of mainstay development services for the public sector and the IT services industry. Profit reached a record high owing to improved profitability resulting from administrative structure enhancements and other factors.
  • Year ended March 31, 2020
    Sales and profit up on development services growth due to expansion of projects other than financial services including IT services industry.
  • Year ended March 31, 2019
    Sales of development services decreased due to a sharp decrease in sales to major banks, our core customers, and the addition of work in process for the Nippon Export and Investment Insurance project. The profit margin increased due to factors including a decrease in amortization of goodwill and other SG&A expenses.

    * Amortization of goodwill from the former dealer business was completed during the year ended March 31, 2019.