P.35 Special Feature: Digital & AI Strategy (DAIS)

35 01. Value Creation Stories for the Future

Special Feature:

Digital & AI Strategy (DAIS)

Q3. Investor and analyst perspectives

SCSKʼs operating profit margin is projected to improve significantly from FY2026. While we understand that demand in the IT solutions market remains firm and the Groupʼs strategy is expected to enhance profitability, SCSKʼs operating profit margin has remained flat at 11.1% over the past two years. What has fundamentally changed to support such a sharp improvement from this point onward?

Answer

In addition to reducing costs through the integration of Net One Systems, we plan to raise our overall profit margin by improving productivity through AI-driven development while enhancing profitability through the offering-based model. Under the new medium-term management plan, we will introduce operating profit per employee as a new KPI to accelerate the transformation of our earnings structure in response to advances in AI and increasing workforce constraints.

AI-driven development

100% AI-driven development within two years Future: AI-driven development (AI-centric/digital) Automate the development process with AI (through an integrated pipeline) Faster development Maximize productivity

Development process (how itʼs built)

• Requirements definition
• Design
• Code generation
• Testing and verification
• Review and refinement Automation, continuous optimization, and rapid iteration

Output (what is produced)

Structured data and configuration management

• Easy for AI to interpret
• Easy to reuse
• Changes are fully traceable
• Consistent quality Enhance data utilization Improve quality and reusability

Management (how itʼs managed)

AI visualizes, analyzes, predicts, and optimizes project execution

• Automate situation analysis
• Risk prediction and anomaly detection
• Decision support Improve prediction accuracy Minimize risks

Offering

An offering is a delivery model that helps customers transform their businesses by addressing their challenges. Building on the technologies and expertise cultivated through our SI and NI businesses, we accumulate competitive intellectual property to deliver sustainable value creation.

Vision

Offering-based model Combining AI, data, and industry expertise to drive customer transformation Promoting high-value-added businesses to enhance profitability Standardizing proprietary services and IP for scalable deployment Building a repeatable, sustainable delivery model to enhance profitability

Current

SI/NI (traditional model) Labor-based, time-and-materials model

• Deep understanding of customer challenges
• Ability to address individual customer requirements
• Close integration with customersʼ operations