Consolidating the IT functions into one company, and listing on the TSE (2001)

A function that became saleable by being put back into one company

Sales to the parent, which had accounted for eighty per cent at the outset, had fallen to sixteen — that single point is what made the 2001 re-consolidation and the following year’s listing possible. Putting four separate companies back into one, and taking over even the upstream functions still held by the parent, was done less to tidy the organisation than to create a company that could accept cross-industry contracts through a single window. It can be seen as a judgement that experience in building systems which must not stop a steel mill would carry over to a bank’s core accounts and to a retailer’s order processing.

Yet it took thirteen years to reach the ¥200 billion in sales the company had set out, and on the day of listing the share price fell below the offer price. The market did not immediately reinterpret an origin as a steel group’s IT subsidiary. That a proposal to drop “Nippon Steel” from the company name was rejected shows that the credit of the parent was chosen over the banner of independence. Compared with the other blast-furnace makers, which handed their IT subsidiaries to IBM Japan in the same period, the road diverged; but the gap between the speed of going to market and the slowness with which the valuation settled expresses the difficulty of the user-affiliated systems integrator as a business form.