3 benefits of promoting DX｜Explanation of examples and introduction steps for reference!

In Japan, where labor shortages are a concern, digital transformation is being emphasized in all industrial fields.

DX (Digital Transformation) is attracting attention .

Many companies are working to promote DX in order to survive the competition in a changing society.

However, it is also true that there are issues such as a lack of understanding of DX.

This time, we will define what DX is, and introduce the introduction steps, introduction benefits, and specific examples.

What is DX?

DX definition

In 2018, the Ministry of Economy, Trade and Industry of Japan issued the “Guidelines for Promoting Digital Transformation (DX Promotion Guidelines)” and defined DX in the business scene as follows.

In order for a company to survive in a competitive society, it is necessary to respond to social changes and use the power of digital technology to create new value.

Why DX attracts attention

In the “DX report” released by the Ministry of Economy, Trade and Industry on September 7, 2018, the word ” 2025 cliff “ was used to warn against the IT system infrastructure of Japanese companies. It has become a center of attention.

The “2025 cliff” is a word that expresses that Japan will suffer an economic loss of up to 12 trillion yen annually after 2025 due to the lack of progress in DX.

The content of the existing system, which was the foundation of the company, becomes complicated, outdated, and black boxed, causing delays in international competition and stagnation of the Japanese economy.

On the other hand, if DX is realized, it is said that it is possible to boost the real GDP to more than 130 trillion yen in 2025-2030.

Advantages of introducing DX

What benefits does the introduction of DX bring to companies?

1.Improve work efficiency/productivity

By introducing DX, you can reduce costs and improve efficiency by eliminating system maintenance costs and wasted labor . In addition, it can be expected to improve the productivity of companies by streamlining and automating operations .

2.Increase earnings by creating new value

If new business services are created through organizational transformation through the process of DX, companies may be able to build a new revenue base.

In addition, high-precision analysis using data expands customer needs and convenience, and by pursuing “ease of use” of services, businesses and services have characteristics different from their original forms, creating new value. connected to.

3.BCP measures

BCP (Business Continuity Plan) is a plan for continuing business in an emergency such as a disaster. In introducing DX, promoting digitization will lead to BCP measures.

As many companies needed to transform their operations due to the spread of the new coronavirus, companies that had advanced digitalization responded flexibly, such as smoothly transitioning to remote work.

In this way, by introducing DX, it is possible to respond quickly and flexibly in an emergency .

DX implementation examples by company

Toyota Motor Corporation – Digitization of sales system –

Toyota Motor Corporation has linked its on-prem core system and cloud-based CRM (customer management system) with “Salesforce,” enabling cross-sectional utilization of customer information.

This is expected to improve the efficiency of sales activities of sales companies.

Fujitsu – Reducing Postal Costs –

In collaboration with A*Quantum, Fujitsu worked on optimizing the delivery service at Japan Post’s Shin-Iwatsuki Post Office in Saitama Prefecture.

It seems that the route that minimizes the transportation cost was calculated using data using a new technology that solves combinatorial optimization problems inspired by quantum computing at high speed.

This has made it possible to reduce the number of flights from 52 to 48 compared to the conventional method.

Starbucks ~Introduction of Mobile App~

Starbucks is introducing a mobile app that uses reinforcement learning technology. Recommended products are recommended against the inventory of the nearest store, fixed-term products, user’s order history, etc.

This enables us to provide products that are optimized for users.

DX introduction steps

The introduction of DX can be divided into five steps. Let’s validate each step and realize DX.

1. Digitization

Digitization is the stage of actively introducing web applications and cloud services .

Data is accumulated by using digital tools instead of analog work.

Typical examples include attendance management tools and expense management tools .

2. Efficiency

Efficiency is the stage of utilizing data accumulated through digitization in each department .

Currently, many Japanese companies are said to be at this stage.

Cost reduction and productivity improvement can be expected by streamlining operations through the use of data .

3. Standardization

In standardization, we will build a foundation for utilizing the data accumulated and used by each department throughout the company.

This cycle enables effective use of data across departments .

4. Organize

Based on the infrastructure built by standardization, this is the stage of creating an organization that performs efficient data operations .

The purpose is to establish an operational system of the organization and clarify the work flow (a flow that shows the work process in an easy-to-understand manner) .

5. Optimization

In the final stage of optimization, innovation (technical innovation) is brought about in business activities.

From the data accumulated in the previous stages, it is possible to predict the future of the business and formulate a highly accurate business plan .

Data and other digital assets form the foundation of business operations, and the use of data leads to improved corporate profits and competitiveness.

Challenges of introducing DX

1. Complicated legacy system

Legacy systems refer to outdated mission-critical systems used by many Japanese companies.

The old system has become a black box (a state in which the internal structure cannot be understood) due to exaggeration and complexity.

As a result, there is a lack of flexibility and mobility, making it difficult to operate the latest technology .

In addition, there are cases where cooperation with existing systems does not go well, and the introduction of DX does not progress or becomes even more complicated.

2. Company-wide expansion

There are some cases where the introduction of DX is limited to some departments and the company as a whole has not been able to implement DX. Build a cross-sectional system and aim to realize DX company-wide.

To solve problems

It takes a lot of time and effort to transform a company by introducing DX.

Start by understanding your company’s situation and working on small measures. The surest way to proceed is to gradually expand the scope.

summary

The introduction of DX brings benefits to companies, such as improved productivity and the creation of new value through streamlining operations.

However, while DX is attracting attention, there are few companies that have achieved success with DX. Companies need to proceed steadily with the introduction of DX according to appropriate procedures.

Understand existing systems and issues, and aim to realize DX by referring to the five steps introduced here.