II. Risks in Fujitsu Group Business Activities

9. Deficiencies or Flaws in Products and Services

[ Overview and impact of risks ]
The Fujitsu Group regards quality as a core part of our business activities, and works tirelessly to maintain and improve a networked society where people can live comfortably with peace of mind.

In entrusted development of systems and the operation and maintenance of products and services, as well as the design, development and manufacturing of products, customer requirements are becoming more sophisticated, and systems are becoming more complex. This increases the level of difficulty of developing products, and may result in the occurrence of defects and flaws. In addition, a decline in price due to intensifying competition may result in the occurrence of delivery delays and loss-making projects. In the event that such defects or flaws in our products or services occur, product recalls and repairs, system recovery work, compensation to customers, and opportunity losses will affect the Fujitsu Group’s revenue and profit or loss.

In the unlikely event of an error in judgment or systemic misconduct when responding to defects or flaws in our products or service, the Fujitsu Group’s corporate reputation may decline, which may significantly increase the impact on the company’s profit or loss.

[ Measures against the risks ]
In entrusted development of systems, we have established company-wide rules for quality control and are working to improve quality through modularizing our software, standardizing development, and conducting security audits. In addition, we are reviewing the way we form contracts with customers and promoting the standardization of the business processes of business producers and engineers. We are also conducting risk management from the time that business deals occur through the progression of the project to deter the occurrence of delivery delays and loss-making projects. Also, we reserve losses in a timely manner.

In the operation and maintenance of products and services, we are working with customers to continuously conduct activities to improve inspections, quality, contracts, and rules.

In the design, development, and manufacturing of products, we have established company-wide rules for quality control. We are also promoting compliance with relevant laws and regulations, conforming to the latest standards, improving quality, and the quality control of externally purchased products.

Further, to enhance the company-wide quality assurance system to avoid the occurrence of major failures, in addition to the quality assurance process in each business division, an organization under direct control of the CEO monitors the effectiveness of each process, and introduces and improves upon cross-divisional mechanisms to share knowledge and expertise among divisions.