Business

ABC, or the Company, was formed in March 1969. ABC's primary business objective is to become a leading system integrator. In the years since the Company was founded, it has been able to establish a distinguished reputation for the quality of its services to a prestigious list of clients in the finance, information systems, and industry sectors. In 1988, ABC was certified as a “Registered System Integrator.” In the future, ABC intends to expand both horizontally and vertically through strategic alliances, internal research and development, and acquisitions.

Current Business Activities

ABC's main business activities are:

System Integration

System integration (SI) is a solution providing business which integrates all the other major business activities of the customer. Since 1989, the ratio of system integration turnover in relation to ABC's overall business has been getting larger. In 1991, ABC completed several large-scale system integration contracts. ABC's substantial experience with system integration has enhanced the Company's credibility with existing and potential clients.

System Development

System development concentrating on the design and production of software systems has been a big part of ABC's business. System development is a more technical oriented business in which the clients have developed their own solutions and look to the developer, such as ABC, to assist with the process of implementation.

Facility Management

In 1974, ABC began providing total facility management services in the area of banking and retail. However, since the early 1980s, ABC has shifted its business to system development and integration. Facility management is a kind of outsourcing business in which the customers use ABC's personnel and hardware facilities for their operations. In most cases, facility management services will be provided following the development of a system for the customer.

Product Development

Product development is a product-based business in which ABC distributes the products it has developed or licensed from other developers. Most of ABC's products were originally made for in-house use and then packaged for sale. These products have included project management systems, cost accounting systems, and quality control systems.

Consulting Services

ABC has growing experience in the area of system consulting, which is a solution-providing business. All application system engineers are in charge of consultations with customers to define their requirements. The consulting business is getting larger as the Company's system integration services expand.

Vending Activities

The Company occasionally supplies computer hardware and associated items, including software products, manufactured by other companies. This portion of ABC's business is relatively small, less than 10%; however, it may increase as the Company continues to become more involved with system integration.

Business Strategy and New Products

ABC's strategic planning for the next few years will be based upon the assumption that legacy software methodology will be a diminishing factor in the market and that the future requirements of the Company's client base will lie with the implementation of prefabricated software into the client's procedures in order to provide them with their own unique business solutions. Since ABC's business is extremely client-oriented, ABC's mission will be to develop and acquire software products which ABC believes will meet the requirements of its customer base and as to which ABC can approach those clients with appropriate solutions.

In order for ABC to execute its strategic plan, it must establish core expertise in both technology and application. The core expertise in the technological area will be pursued not only through internal research and development, but also through the acquisition of suitable strategic products from outside parties which ABC believes can be easily adapted to the requirements of its client base in the market. The Company completed its initial efforts with respect to arrangements with third parties by entering into arrangements with two European companies, DEF and GHI. DEF, which is based in the United Kingdom, is a large-scale system integrator with operations mainly in Europe. It is a large system integrator, and its stock is listed. GHI, established in 1981, developed and distributes a financial product, and its stock is listed.

ABC will be granted the exclusive distribution rights to DEF's software products, which are the two main banking products in DEF's product line. ABC will also be granted the exclusive distribution rights to GHI's innovative product, which is an executive information system based on accounting and procurement.

While the strategic partnerships with DEF and GHI will be important sources of revenue over the next few years, ABC will be continuing to look for other strategic partnering opportunities that will allow it to acquire a larger share in the market. Partnerships of this type will include close cooperation in basic research and development, cross-border joint projects, and licensing arrangements. ABC may either build a relationship with foreign partners through software products, expertise transfer, joint marketing, and new investment or assist established foreign companies in their efforts to localize their products. In addition, ABC hopes to build on its relationship with DEF and move into other market opportunities, such as in the public service and energy areas.