Deteriorating Profitability Due to System Development Man-Hour Overruns, Specification Changes and Defects
First written in FY2016. 1 of 4 entries say "Mitigated", first in FY2017. Latest entry: FY2023-Q2.
Caica Digital moved to the "Worse" side of this theme in 2023, 1 year after the typical company in this theme (2022).
The whole theme swung hardest in 2017: 9 of 31 companies on the "Worse" side.
6 other companies' latest entry also says "Worsened".
- FY2023-Q2WorsenedAnnual report
「In terms of profit, progress is below the same quarter of the previous year, mainly due to an increase in the cost ratio for systems development.」
The increase in the systems development cost ratio is described as an actual decline in profit, indicating that the risk of deteriorating development profitability has materialized. - FY2018RestatedAnnual report
「Although we intend to continue paying close attention to project profitability, profitability may deteriorate as projects become larger and competition for orders intensifies.」
While management based on estimates by development stage continues, the possibility of deteriorating profitability due to larger projects and intensifying competition continues to be described. - FY2017MitigatedAnnual report
「We are working to avoid discrepancies between estimated and actual work hours by, among other measures, preparing detailed estimates for each development stage or phase.」
A management measure based on estimates by development stage is described in response to the risk of deteriorating profitability due to excess labor hours, specification changes and defects after delivery. - FY2016First statedAnnual report
「However, if problems arise during development work and work exceeding the hours estimated in advance becomes necessary, the Group may have to bear the resulting costs. In addition, if specifications change during development and work hours increase, the Group may be required to bear those costs. Furthermore, even after a developed system has been delivered to the customer and acceptance has been completed after the customer determines that there are no problems, if a defect subsequently arises, the Company may have to remedy it at its own expense.」
The possibility of bearing costs and suffering deterioration in profitability due to excess estimated work hours, specification changes and defects after delivery has newly been described as a major business risk.