FY 2023 Second Half: President's Start of Term Message

I would like to share a few thoughts with you at the start of the second half of FY 2023.

Promoting health and productivity management

The most important thing, above all else, is the happiness of each individual, including your own health and that of your irreplaceable family members. In order to protect your own mental and physical health, do not hesitate to consult with your colleagues and supervisors at work or your family members when you feel troubled or worried about something. Be sure to make active use of the wide variety of consultation services that are available both within our company and outside. It is important not to keep these feelings to yourself.

Those in leadership positions should keep the following in mind when communicating with their team members.
When recommending a team member for a leadership position, explain to that team member the importance of “managing work and managing team members” and the extent to which their responsibilities will increase. Be sure to respect that team member's decision whether or not he/she chooses to accept the leadership position.
In addition, watch out for signs of distress during your daily communication with team members who have experienced drastic changes in their work. If you hear someone say that their work is too hard and they want to quit the company, promptly contact the Occupational Health Department and follow the advice of specialists.

First Half General Overview

For the first half of FY 2023, group consolidated sales, operating profit, and core free cash flow are all expected to be within our budget goals. In particular, we are expanding our digitalization services by promoting DX in the manufacturing industry and municipal sector with ERP business at the core. We are also expanding managed services that provide added value to customers by combining our products and services with public cloud services such as AWS. This puts us in a position to promote our priority measures for FY 2023. I would like for us to continue these efforts in the second half of the year. I look forward to your continued cooperation.

Looking back on the first half of the year, the COVID-19 Task Force was dissolved on May 8, after approximately three years and one month of activity. I would like to thank once again everyone who worked on the Task Force, all related personnel, and every employee who worked hard to prevent infection while carrying out their business activities. Given that the number of cases is still increasing throughout Japan, please continue to work to prevent infection in your daily life. There was also special monitoring for the G7 Hiroshima Summit and other events, and recovery measures were implemented for various natural disasters such as earthquakes, heavy rains, and major typhoons. I would like to express my sincere appreciation for these efforts.
In the “Nikkei Computer Customer Satisfaction Survey 2023-2024” published by Nikkei Business Publications, Inc. in August, our company won first place in both the “System Development Services (Manufacturer)” and “System Operation Services (Manufacturer)” categories. This marked the second year in a row that we won the “System Operation Services (Manufacturer)” category. I believe that this is the result of your efforts to support digital transformation by working closely with our customers and thoroughly discussing all approaches to solving their issues. I encourage you to continue with these efforts.

Towards the Second Half of FY 2023

(1) “Hitachi Group Trends”

In September, Hitachi announced “Digital for all.” as a new unified global message for its digital business. This message expresses our desire to “use digital to deliver the value we create to all people and contribute to the realization of a sustainable society.”
The market environment surrounding us will continue to change at a dizzying pace, and digital technology will become even more indispensable to society. Let's take this opportunity to achieve sustainable growth as “One Hitachi.”

(2) “Efforts at the Hitachi Systems Group”

I would like to make a few requests regarding the following three points.

① “Reliably Implementing Growth Strategies”

I believe it is necessary to provide services with high added value in order to achieve sustainable growth. At the same time, the entire company must work together to improve profitability by reviewing sales prices in response to changes in the business environment. This will significantly impact our growth in FY 2023. I ask that each and every one of you engage in your daily work with a new mindset aimed at achieving growth.

I recently attended an executive management training program on trends in security clearance. Security clearance is the process of confirming the eligibility of personnel who handle information that should be kept secret, such as state secrets. Hitachi Systems' role and mission in the Hitachi Group, which supports all areas of national and economic security, will become increasingly important in the future.
In addition, the use of generative AI is also in high demand from our customers. We will leverage our thorough knowledge of a variety of fields to work closely with Hitachi's “Generative AI Center” in the areas of “consulting services,” “environment construction support services,” and “operation support services.”
I would like you to respond quickly to new trends such as “security clearance” and “generative AI” to provide services with high added value.

② “Strengthening Management Infrastructure”

In FY 2023, we launched a “committee to improve HISYS appeal.” This company-wide measure will heighten our brand value, both inside and outside the company, and increase the appeal of Hitachi Systems.
The first phase was completed in July with questionnaires and a “Waigaya Meeting” attended by members who represented each workplace. At the Waigaya Meeting, we discussed improvement measures to address company issues and other problems. Based on the opinions expressed at the meeting, we eliminated the dress code in August. We will continue to improve the appeal of our company through such activities.
During the Waigaya Meeting, some participants commented that the company has a full range of systems for carrying out their work. On the other hand, there were those who said that these systems are not well known. To create an environment in which employees can lead fulfilling corporate lives and achieve personal growth, we are promoting job-based human resources management, providing career support, and expanding eligibility for discretionary labor and flexible working hours. We will strive to make these systems more widely known throughout the company. Please take advantage of them to promote autonomous working styles.

③ “Strictly following Basics and Ethics”

When making decisions and judgments in various situations in the second half of this fiscal year as well, I would like each and every employee to continue to use this order of priority: “S (Safety) >> Q (Quality) > D (Delivery time) > C (Cost).” “S” includes not only safety, but health as well. Please place utmost priority on “health and safety take precedence over everything else” in your actions.
I believe that noncompliance incidents occur not only due to a lack of understanding of the correct rules, but also a lack of communication in the workplace to solve problems. Team members are encouraged to discuss problems with their supervisors as soon as possible. Those in leadership positions should take each consultation seriously and take concrete action to resolve the issue. We are currently reviewing and placing greater emphasis on 1-on-1 communication to build better relationships. In addition to these initiatives, I would like to see more efforts to create a culture of discussing and solving problems in the workplace.

In Closing

I would like to conclude my message by offering my best wishes for a second half of this fiscal year full of healthy, bright, and fulfilling days for our customers, partners, Hitachi Systems Group employees and their families, and all other stakeholders.

October 13, 2023
Setsuo Shibahara
President and CEO
Hitachi Systems, Ltd.

* This is a translation of a message to employees of Hitachi Systems, Ltd.

Leader's Messages Index