Since its establishment in April 2021, Xspear, the provider of our Strategy/DX Consulting services and the largest area of focus in MTBP2027, has garnered interest from a wide range of stakeholders. We spoke with Masataka Soda, Director, Vice President and Co-COO of Simplex Holdings and Representative Director and President of Xspear Consulting, about Xspear's competitive advantage, ability to attract outstanding consultants, and its prospects going forward.– What is Xspear's role in the Simplex Group?The Simplex Group defi nes the crucial areas where technology determines business success as “cross-frontier domains,” and has made expansion into these domains a core part of its growth strategy. Xspear, a general consulting fi rm specializing in DX, was born out of this vision. The name “Xspear” refl ects the fi rm's strong desire to lead the growth of the Group as a whole by “spearheading” its way into various domains aiming to achieve DX. Xspear indeed plays a pivotal role in the Simplex Group's growth strategy. Specifi cally, it not only captures the rapidly growing demand for DX in Japan as it expands its revenue as a consulting fi rm, but also serves as a pioneer in exploring new domains beyond fi nance.Strategy/DX Consulting achieved revenue of 1.0 billion yen in the fi rst year of Xspear’s establishment, 2.1 billion in the second, and 4.2 billion in the third year, which ended March 31, 2024. These were all well above what we had initially planned. Furthermore, we have successfully developed a wide variety of non-fi nancial domains, including government agencies, telecommunications, manufacturing, media, and entertainment. This remarkable growth has proven that our vision matches the needs of the market. About the Simplex GroupGrowth StrategyMateriality Issues and Major RisksESGDataIn response to this need, the Simplex Group has established a system whereby Xspear formulates strategies by considering specifi c use cases for cutting-edge technologies such as AI, UI/UX, cloud, and web3. Simplex then swiftly conducts technical validation or a POC and can also create the platform itself from scratch if necessary. In this way, Xspear and Simplex work in tandem to provide full-cycle coverage from strategy formulation to implementation support. This is a major diff erentiating factor for the Simplex Group vis-a-vis other consulting fi rms.Furthermore, in addition to actively recruiting experienced consulting professionals, we also encourage intra-Group transfers from Simplex (with all its technological knowledge and experience) to Xspear. In this way, we have built up a diverse group of professionals who can contribute to the business development of our clients by combining our diverse domain knowledge with technology evolving day by day. This is another source of our competitive advantage.Simplex Integrated Report 202420Masataka SodaDirector, Vice President and Co-COO, Simplex Holdings, Inc.Representative Director and President, Xspear Consulting, Inc.– Given the rapid growth that Xspear is experiencing, can you say a bit about what sets it apart?Xspear's management vision is to become a dominant force among consulting fi rms in the DX domain. Most of the projects Xspear handles are focused on critical business issues faced by C-suite executives. We aim to deliver business success by working with them to confront such issues head-on on a daily basis.In contrast, in the fi eld of DX support, there is growing demand both for strategy formulation, as well as for implementation. This is because highly perceptive management teams are often frustrated by the traditional arrangement in which a consulting fi rm formulates the strategies, and then a diff erent vendor is brought in to develop the systems and handle the implementation. In other words, what they want is not only strategy formulation, but also the ability to swiftly implement technical validation to assess feasibility, conduct a proof of concept (POC), and carry out platform construction.Business ModelPartnering with clients’ management teams driving DXCOO MessageChallenges and prospectsof Xspear, a DX-focused consulting fi rm
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