The medium-term management plan of veru inc Holdings <6183>.

2. Three Key Initiatives.

As specific strategies within the medium-term management plan, the company has outlined three key initiatives for qualitative aspects aimed at achieving the plan: (1) Human Resources: Maximum utilization of a total of 0.04 million employees, (2) Standardization: Advancement of data utilization, (3) Co-creation: Development in the new BPO area. By accelerating these three key initiatives, they aim to achieve sustainable growth.

(1) Human Resources: Maximum utilization of a total of 0.04 million employees.

As the first key initiative, to ensure that the group employees, reaching 0.04 million when including overseas personnel, can perform at their best, they will work on systemizing growth opportunities and modernizing the working environment. This includes evolving and expanding into fully remote operations, maximizing individual capabilities through job matching, and promoting diverse and flexible work style reforms across all areas.

As part of the efforts related to 'Human Resources' for the interim period ending in February 2025, the company joined the Health Management Alliance in August 2024. The Health Management Alliance is an organization consisting of 416 companies and groups (as of July 30, 2024) that resonate with the vision of 'Revitalizing Japanese companies and achieving the sustainability of health insurance through the health of employees.' Through the steady execution of the PDCA cycle based on data health plans, the aim is to establish a framework for health management and co-create solutions to generate results, as well as realize the implementation in the industrial sector. With this participation, they plan to share examples of initiatives with other participating companies aimed at promoting health management and engage in study sessions to further strengthen health management.

(2) Standardization: Advancement of Data Utilization.

As the second key initiative, the goal is to deepen CX operations. CX operations utilize Customer eXperience (data related to all customer experiences) to provide new value, aiming for broad application through standardization. By utilizing the vast amount of data accumulated by the company through its operations, such as customer attributes, web behavior, purchase history, operational achievements, response procedures, and resolution FAQs, clients can achieve contributions to business growth and optimization of business processes, consumers can enjoy improved customer experiences and responsive solutions that meet diverse needs, and employees can experience joy at work and the realization of a system where anyone can thrive.

As part of the "modeling" initiative for the interim period ending in February 2025, BrainPad <3655> has started offering a service that facilitates and acts on social listening and UGC (User Generated Content: content such as word-of-mouth and reviews that users voluntarily post) collection and analysis using the SNS analysis tool "Brandwatch Consumer Research." This service supports everything from planning initiatives to executing operations. Moving forward, there are plans to leverage the extensive knowledge of BrainPad, a professional group in data utilization, combined with the company's experience in customer service and BPO operational know-how in the contact center field to contribute to companies' marketing DX. Reports have already been made to a major overseas coffee options chain regarding customer impressions of new products, aiding in product improvement and sales increases.

Additionally, to further expand a new resident contact service that supports municipal DX, an agreement has been signed with Kamakura City in Kanagawa Prefecture regarding a demonstration experiment for call center operations related to telephone response tasks. The goal is to conduct effectiveness verification aimed at improving citizen convenience and staff work efficiency through a demonstration experiment responding to inquiries from citizens by phone. Based on the results of this effectiveness verification, plans include the establishment of a "Frequently Asked Questions (FAQ)" resource for citizens, as well as the integration of inquiries across the entire government using multiple channels such as email and chat, balancing staff efficiency and citizen convenience.

(3) Co-creation: Exploring NEW BPO areas.

As the third key measure, the aim is to explore the development of new areas. While significantly deepening the new area of CX operations, the goal is to develop the new area of NEW BPO in collaboration with partner companies. By adding new partners in addition to Itochu Corporation and TOPPAN Holdings, the plan is to expand the business field.

As part of the "co-creation" initiative for the interim period ending in February 2025, the company has launched the Generative AI Co-Creation Lab., a user company participation program for sharing examples among participating companies aimed at constructing a hybrid contact center of "generative AI" and "human." This program will utilize the AI technologies and expertise of various companies involved, including the contact center operational expertise of the company, Itochu Techno-Solutions which has a track record in AI system integration, and firms vital in the generative AI development front like Microsoft Japan, Google Cloud, and Amazon Web Services Japan, as well as the company's subsidiary Sinker that supports the data marketing field and Vexter, a company engaged in natural language processing support. The Generative AI Co-Creation Lab. seems to already have garnered interest from around 50 companies across various industries as an effort to "co-create" the future of contact center automation.

Additionally, in August 2024, TSUNAGU Community Analytics, which has a track record in DX for the Chubu Electric Power Group, joined in to develop and start providing a joint service that realizes "knowledge transfer" for contact centers utilizing generative AI in collaboration with the company. There are plans to promote the joining of similar companies and aim to introduce about ten companies to this service by the fiscal year 2025. The plan is for the Generative AI Co-Creation Lab. to act as a hub connecting the issues that need to be solved with technology, creating advanced examples utilizing generative AI. Furthermore, Horizon One, a joint venture between the company and Layers Consulting, has signed a location agreement with Kumamoto City and has opened the "Kumamoto Shirakawa BPO Center," the third base in Kumamoto City. There is a plan to hire around 100 new employees to advance BPO operations for wide-ranging indirect tasks such as accounting, HR, and general affairs aimed at client companies facing labor shortages. Additionally, the company is also conducting a proof of concept for next-generation word-of-mouth analysis tools utilizing generative AI in collaboration with iStyle <3660>, which operates Japan's largest comprehensive information site for cosmetics and beauty, @cosme. They are analyzing word-of-mouth collected through generative AI to utilize in marketing. It seems that there are ongoing considerations for various horizontal expansions regarding the generative AI tools.

As mentioned above, the company is steadily accumulating results along three key measures, but is also expected to launch new initiatives continuously, aggressively working towards achieving the quantitative goals set in the mid-term management plan.

(Written by FISCO guest analyst Nozomi Kokushige).