■Business Overview
3. ERP business
In the ERP business, we are developing, introducing, and selling the Web-ERP package “GRANDIT.” “GRANDIT” is an ERP package operated by a consortium system in which 11 IT companies participated, and the system integrator ＜3826＞ has been involved in planning and development of “GRANDIT” since the consortium was formed in 2004, contributing to its spread and expansion. The customer target for “GRANDIT” is mid-sized enterprises with annual sales of tens of billion yen, and recently the number of companies that have introduced it has expanded to over 1,400 companies throughout the consortium. The characteristics of “GRANDIT” include the fact that it is completely web-based and does not require maintenance work on the client side when the version is upgraded, and since it does not depend on hardware, it can be used anywhere in any environment where the Web operates. Furthermore, since the technical know-how of each of the 11 companies is utilized in product development, “GRANDIT” is compatible with a wide range of industries, has high competitiveness in terms of functionality, and is one of the few domestically produced ERP that includes production management. In 2022/11, the cloud ERP service “GRANDIT miraimil (miraimil)” for small and medium-sized enterprises was released, and it continues to evolve day by day.
The company's implementation track record boasts a top track record among consortiums with dozens of companies, and it has also won the “GRANDIT AWARD Prime Partner of the Year,” which is given to the company with the highest sales record, 7 times in the past. The company's strengths include development capabilities that can handle a wide range of solutions, such as developing “project management templates (IT templates)” etc. linked to “OBPM Neo” for the software industry in addition to “production management add-on modules” and “construction management add-on modules” for the manufacturing industry as add-on modules that complement the basic functions of “GRANDIT.” Furthermore, it is compatible with business automation proposals combined with RPA and AI, and integration services based on public clouds such as AWS and Microsoft Azure.
The size of the domestic ERP market continues to expand steadily as digital transformation (DX) of management becomes active due to the spread of the novel coronavirus infection (hereinafter, COVID-19). SAP, the largest ERP company, has announced that maintenance support for existing systems will end in 2027, and as movements to transition from existing systems to “SAP S/4 HANA” or switch to other ERPs become active, mainly in large enterprises, there is a chronic shortage of engineers, so the company also began implementation support for “SAP S/4 HANA” from 2024/4.
ERP vendors are being divided according to customer size, and foreign companies such as SAP and Oracle ＜ORCL＞ are strong for large enterprises, and in addition to “GRANDIT,” “GLOVIA” by Fujitsu ＜6702＞ and “OBIC7” by Orbic ＜4684＞ are competitor products for medium-sized enterprises. Recently, there have also been complications such as multifunctionality and external collaboration functions, etc., and the unit price per order also tends to increase to 300 to 500 million yen. Since the gross profit margin changes depending on product structure and specifications, etc., it cannot be said unequivocally, but on average, it is in the latter half of the 20% range. On the other hand, if project extension or renovation work occurs, there is also a risk that profit margins will drop or it will become an unprofitable project.
4. AI business
In the AI business, a deep learning visual inspection system “AISIA-AD (AISIA-AD)” using the latest image recognition technology was released in 2018/10. It is a system that realizes significant labor savings by automating the visual inspection process of production lines using deep learning technology. The deep learning technology of “AISIA-AD” creates an AI model that can identify abnormalities and normalities using a learning environment using Microsoft's Azure. In the abnormal detection process, inspection objects flowing through the production line are photographed with a camera, determined in real time at high speed by an edge computer, and those determined to be abnormal products are sorted. Since inspection targets and required accuracy differ depending on the customer, it is necessary to develop an AI model for each individual project and solidify final specifications while implementing PoC (proof of concept).
The initial cost of implementing PoC is about 4 million yen, and when introducing it to an actual production line, a license fee of 4.8 million yen for “AISIA-AD”, 10 million yen for development costs (requirement definition - introduction support, education), and about 4 million yen for hardware equipment are required. The PoC verification period is 2 to 3 months, and the development and implementation period is 4 to 6 months as a guide. Since there are many manufacturing customers in the company's ERP business, they are proceeding with customer development using business know-how and networks accumulated through the introduction of ERP as weapons, but improving accuracy has become an issue, and it takes time to start up more than initially anticipated.
(Author: FISCO Visiting Analyst Joe Sato)