Company history

Around 1970 a mainframe cost anywhere from a few hundred million to well over a billion yen, which made owning one alone hard to justify and sharing one obvious. In April 1971 sixty companies grouped around Sanwa Bank put up $1.7M (¥600m) of capital to create Toyo Information Systems — a joint computing centre that began life running batch work for the Sanwa group. The parentage was the business plan: from day one the company inherited the bank’s customers, and an early relationship with the card issuer JCB that would become the root of its later strength in credit-card and consumer-credit systems. It was an independent integrator standing on a banking, card and consumer-finance base it had not had to win.

The first correction came quickly. The company had been built around think-tank and research work, and when the 1973 oil shock sent clients hunting for cost cuts that demand thinned out. In October 1975 Toyo Information Systems absorbed Toyo Computer Service, moving its centre of gravity to the clerical data processing that keeps running whatever the economy does — and in the same month opened a Tokyo branch, taking the business beyond its Kansai keiretsu customers. A Tokyo First Center followed in 1984.

The 1980s mainframe boom did the rest. Sales went from $27.4M (¥6bn) in the year to March 1980 to $342.1M (¥47bn) in the year to March 1989 — seven and a half times in a decade — reaching $386.7M (¥56bn) the following year. The company listed on the second section of the Osaka exchange in November 1987, added the Tokyo second section in 1990, and moved to the first sections of both in September 1991, less than four years after its debut.

Revenue fell for the first time in the year to March 1993. The cause was structural: large Japanese companies were abandoning custom in-house systems for packaged ERP, and a firm whose main line was supporting in-house development took the shrinkage head on. The slump ran through the late 1990s while the company felt its way toward ERP customisation. In April 2000 it bought Komatsu Soft (today Qualica) from the construction-machinery maker — deliberately buying its own blind spot, since a company raised inside a bank group was strong in finance and weak in manufacturing, and the deal brought both the know-how and Komatsu itself as a large user.

In January 2001 the company dropped Toyo Information Systems for the abbreviation it was known by and became TIS Inc., using the rename to mark the end of the slump. President Funaki Takao, in the company’s thirtieth year, set out to lift roughly $576M (¥70bn) of sales first to $1.2B (¥150bn) and then to $4.1B (¥500bn) by 2010; Agrex, an outsourcing specialist, was bought up into consolidation in February 2002 as the second step in that expansion.

In 2004 TIS won the job of replacing JCB’s decade-old core system — JENIUS, built on IBM System z with Java online and some COBOL batch — and mobilised more people on it than on any project in its history for a client worth $184.9M (¥20bn) to $277.4M (¥30bn) a year. The new president, Okamoto Susumu, was betting on volume and quality together as the way an independent survives an era of pricing pressure from Chinese offshore rates. Instead the project ran years late: the year to March 2007 carried a $43.3M (¥5bn) provision for contract losses and a net loss of $6.9M (¥810m), with the extra development cost eventually reported at $67.9M (¥8bn), and the system only went live in November 2008. Having survived the 1990s, TIS had run into a different failure mode — and shown the whole industry what a single ¥10-billion-plus contract can do to an independent’s balance sheet.

The answer TIS reached for was size. In December 2007 it agreed to combine with Intec Holdings, and in April 2008 the two created a joint holding company, IT Holdings, by share transfer and listed it on the first section in Tokyo. Intec, founded in 1964 in Toyama and strong in manufacturing and distribution, was the complement to a Sanwa-bred TIS strong in finance and cards. As systems grew larger, only the biggest houses could win the profitable work, and consolidation among the mid-sized players had become the obvious move; Okamoto said he had hurried the deal for fear of being reshuffled by someone else, and while he denied any link to the JCB overrun, the logic of spreading one project’s failure across a bigger group was plain enough.

Assembling the group took another three years. Nine TIS subsidiaries were moved under IT Holdings by corporate split in October 2008; Solan was taken over by tender offer in December 2009 and made wholly owned in 2010. In April 2011 TIS absorbed Solan and Ufit, and Kuwano Toru — a lifer who had joined Toyo Information Systems in 1976 and had been the executive over the JCB project — became president the same month. The restructuring that came with the three-way merger cut some 400 jobs and produced a $98.4M (¥8bn) extraordinary loss in the year to March 2012; in February 2012 nine group companies’ Tokyo offices were folded into a single building in Nishi-Shinjuku, the physical solution to duplicated head-office functions.

From there the numbers recovered. Agrex, still a listed subsidiary running the group’s business-process outsourcing, was squeezed out by tender offer and made wholly owned in March 2015; the year to March 2015 brought $3.0B (¥361bn) of sales and $174.4M (¥21bn) of operating profit. In May 2017 the group set a ten-year Group Vision 2026 — “Create Exciting Future” — built on investing and partnering in fintech and payments, and launched a mobile wallet service with Toppan Printing. The year to March 2017 delivered 8.8% ROE against a plan of 8%, a year early. The decade from the 2008 holding company to the 2026 vision was, in substance, one long clean-up: writing off the JCB legacy and stripping out the overlaps between the companies it had bought.

The fourth medium-term plan, from 2018, raised the total payout ratio to 40%, set aside up to $724.6M (¥80bn) for software and acquisitions, and managed the business by the share of high-value work in the mix; the segments were rebuilt in 2019 into BPO, service IT, industrial IT and financial IT. The old problem had not gone away — in March 2019 came reports of a $116.5M (¥13bn) damages claim over a core-system replacement for Mitsubishi Shokuhin — but the plan’s targets were met a year early, with the year to March 2020 bringing $4.2B (¥444bn) of sales and $419.6M (¥45bn) of operating profit.

The money went abroad and into payments. TIS bought the American fintech Sequent Software in February 2020, then took control of MFEC of Thailand by tender offer in October, converting a long-held equity stake into a Southeast Asian foothold. Okamoto Yasushi, who had joined in 1985, became president in April 2021 under a new brand line, “Let’s make society’s wishes come true with IT”; Kuwano moved to a non-representative chairmanship. The pruning continued in both directions — the government-sector business was handed to Intec, Chuo System was sold out of the group in November 2021 for a $45.7M (¥6bn) gain because small-business software did not fit a company built on large-enterprise work, and Nihon ICS was bought outright in 2023 to strengthen healthcare IT.

In May 2024 the group set Group Vision 2032 and, with it, a plan to concentrate roughly $660.1M (¥100bn) of growth investment over three years in three areas: payments, Southeast Asia and quantum computing. Okamoto credited the shift to collaboration across the group finally taking hold, sixteen years after IT Holdings was formed. The year to March 2025 was a record — $3.8B (¥572bn) of sales, $461.1M (¥69bn) of operating profit and $334.1M (¥50bn) of net income — alongside $280.7M (¥42bn) of buybacks. A company that started as sixty companies’ shared mainframe now allocates capital, deliberately, outside the domestic contract-development business that made it.