With the recovery of the Japanese economy, more companies are expected to invest in IT. This trend, coupled with strong outsourcing demand, is predicted to foster a growing IT market.

However, a chronic personnel shortage continues to trouble the entire IT industry, which is still undergoing many changes, including greater customer demand for lower prices and faster development times, fiercer sales competition from hardware vendors who are entering the system service sector, and the increased activity of competitors overseas.

Another challenge confronting NTT DATA is maintaining market competitiveness in the midst of the declining number of stable, large-scale systems, the increase in new systems, and the progressive downsizing of IT systems.

Within this business environment, we are focusing our efforts on pursuit of No.1 in customer satisfaction by maintaining our competitive advantage and accommodating demand for the strategic IT investment essential for the further development of companies and society. To that end, we are striving to become the "Leading-edge Innovator" and shift our focus from quantity (sales) to quality (business methods/value-creating businesses).

The many measures included in the Medium-Term Plan are designed to realize the above goals. They include: innovation in sales and marketing processes; innovation in development processes; promotion of efficient group management; improvement of the business portfolio; an emphasis on growth engines; and promoting human resource Development. Through the implementation of these measures, we will develop our operations and enhance the corporate value of the NTT DATA Group as a whole.

(1) Innovation in Sales and Marketing Processes

By strengthening our consulting business, we will become an "IT Partner" able to understand the true needs of customers and propose effective solutions. We will also promote phased contracts that will make customer requirements visible and enable us to provide better estimates.

(2) Innovation in Development Processes

Our aim is to standardize processes and raise quality and productivity by standard system development methodology and platform use. Specifically, we will take the following steps:

• Standardize development methodology and processes
• Standardize platforms including those of Group firms and affiliates
• Promote overseas procurement
• Venture into new development and production methods

(3) Promotion of Efficient Group Management

We are clarifying roles for Group firms and eliminating mission duplication, thereby optimizing the Group and improving management efficiency. As part of this effort, we will engage in strategic procurement, improve the cost efficiency of management, establish an information platform, and take other steps to foster group development and improve the quality of operations by leveraging Group synergy.

(4) Improvement of Business Portfolio

We will withdraw from some businesses or move them to Group firms for fundamental improvement in profitability, while shifting to more profitable projects the human and material resources freed as a result. At the same time, we will maintain a commitment even to underperforming businesses if from a long-term standpoint they have future potential or provide the public with valuable services.

(5) Emphasis on Growth Engines

We are focusing on selected business domains such as health care and embedded software, implementing projects employing a top-down approach focusing on priority areas over the long term, and concentrating management resources to build a future earnings base that is robust both in scale and profitability.

(6) Promotion of Human Resource Development

We are raising skill levels throughout the Group by expanding and spreading professional CDP certification,^* providing training programs that produce professionals, and implementing measures for training young talent.