Executive Summary
On April 30, 2026, Envalith had the opportunity to interview Masaaki Obayashi (Executive Officer and CFO) following the release of full-year results and the announcement of "Mid-Term Management Plan 2028." BellSystem24 Holdings unveiled "Mid-Term Management Plan 2028," setting numerical targets of JPY 175B in revenue and JPY 16B in operating income for FY02/2029. Management candidly assessed the reasons for the shortfall under the previous mid-term plan, while clearly articulating a strategy that positions generative AI-powered automation services and roll-up M&A-driven business platform expansion as the new growth engines. Under the concept of "Hybrid Intelligence for All," the company is promoting "co-creation of new value through the fusion of humans and AI," and aims to establish itself as a game-changer in the industry through a fundamental transformation of its cost structure and the capture of first-mover advantages.
Message from the Company
Our strength lies in our ability to coordinate the entire package—leveraging AI engines together with specialized operational expertise and our client base. Over 40 years of operational track record and accumulated data underpin this capability, putting us one or two steps ahead of the rest in this industry. We are committed to firmly capturing our first-mover advantage.
Key Discussion Points
New Revenue Creation Through Generative AI Automation Services
Management has designated the current fiscal year as "Year One" for generative AI revenue, targeting JPY 10B in annual revenue by FY2028 through the expanded rollout of contact center automation. This JPY 10B figure is based on conservative assumptions, with potential upside to a JPY 20B scale. The pricing model is based on a base fee plus usage-based charges, representing a fundamental shift away from the traditional man-hour contract model. Gross margins on generative AI engagements are expected to approximately double compared to the existing business (~20%). For now, the focus is on acquiring new clients, with limited cannibalization of the existing customer base assumed.
Roll-Up M&A and Business Investment to Expand Legacy Business and BPO Operations
A JPY 20B business investment envelope has been established to drive scale expansion through a roll-up strategy and pursue M&A/partnerships targeting industry-specific and function-specific companies. In expanding BPO operations, the company plans to replicate the successful model of Horizon One—a joint venture between BellSystem24 Holdings and Layers Consulting focused on consulting × outsourcing primarily in accounting and HR—and targets JPY 10B in incremental revenue over three years in Smart Business Support (SB) operations (JPY 5B from M&A, JPY 5B from AI agents and BPR consulting). The investment policy is to selectively invest only in opportunities that offer profitability or synergies exceeding those of the existing business.
AI Agent Business Expansion Through Tripartite Alliance with AVILEN and ITOCHU
BellSystem24 has entered into a business alliance agreement with AVILEN and ITOCHU Corporation to launch solutions that comprehensively support custom AI agent development and implementation, reskilling of personnel into AI talent, and BPO. In the administrative BPO space within SB operations, the company is deploying AI-integrated services that go beyond mere staffing support, aiming to capitalize on labor shortages as a tailwind for market expansion.
Envalith's Perspectives
Q&A Highlights
- Q
What were the primary reasons for the shortfall under the previous mid-term plan, and what are the growth drivers in the current plan?
APost-COVID, DX initiatives on the client side and rising IT literacy among end-users led to a sharper-than-expected decline in inquiry volumes, particularly at telecom carriers. E-commerce-related demand also peaked, and the anticipated expansion in outsourcing needs was slower than projected—these were the primary factors. The current mid-term plan is built on two pillars: generative AI utilization and a roll-up strategy in SC (Smart Communication) operations, and BPO expansion through M&A plus AI agent deployment in SB operations, with a minimum of JPY 10B in generative AI revenue based on conservative assumptions.
- Q
How is the pricing model and revenue structure for generative AI automation services designed?
AThe base model is a base fee plus usage-based charges, with some fully fixed-fee arrangements also envisaged. The main cost components replacing labor costs are AI engine licensing fees, application development costs, and personnel costs for prompters and similar roles. Gross margins on generative AI engagements are estimated at roughly double those of the existing business, which is expected to maintain approximately 18–20%. If the JPY 10B in new revenue is achieved, this translates to approximately JPY 4B in incremental gross profit on a net basis.
- Q
What is the allocation and expected return profile for the JPY 25B in strategic investment?
AThe breakdown is JPY 4B for data utilization expansion (generative AI-related), JPY 1B for AI talent development, and JPY 20B for business investment (M&A). Of the JPY 4B, roughly half is allocated to application development (CAPEX), with the remaining half for AI talent recruitment and labor costs (OPEX). The JPY 20B in business investment assumes returns at or above current profit margins (~6% after tax). The plan calls for approximately 100 incremental AI personnel over three years, hiring at a pace of 30–40 per year. Maintaining a 50% dividend payout ratio alongside these investments will be managed through increased borrowings to adjust the cash balance as needed.
- Q
Are there structural barriers to entry for AI engine providers?
AManagement views AI engines as analogous to a car engine—an engine alone cannot drive. Over 40 years of operational track record underpinning the ability to package solutions, trusted client relationships, and expertise in designing and operating business processes constitute proprietary strengths that cannot be replicated by simply providing an engine. While the relationships with ITOCHU and TOPPAN are not governed by exclusive contracts, the partnerships function robustly based on mutual interests arising from their positions as major shareholders.
- Q
What is the breakdown and talent strategy for achieving the +20% profit-per-employee target?
AThe plan is to achieve this through a combination of improved utilization rates and enhanced operational efficiency, without granular component-level decomposition. The company aims to maintain its operator headcount at approximately 30,000 while driving revenue and profit growth with the same staffing level. The high-value-added talent pool of 2,500–3,000 will remain broadly unchanged in scale, with the focus shifting to quality improvements through AI adoption. Investment in BPR consulting talent development is included within the JPY 1B talent development budget over three years.
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