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what is DX? Easy-to-understand explanation

In recent years, DX (digital transformation) has been advancing in all fields. You may have heard the word DX once.

The promotion of DX is indispensable for companies to survive in the ever-increasing global competition.

DX
DX

In this article, we will explain DX in an easy-to-understand manner and introduce specific success stories. By reading the article, you will find that introducing tools is not the only DX, and you will be able to understand where the key to the success of DX is. We also introduce books and videos that are useful for promoting DX, so please make use of them.

<Table of Contents>

What is DX? First of all, explain the meaning in an easy-to-understand manner

Differences between IoT and digitalization

Why DX is needed now

Five steps to promote DX
・1. Management’s determination
・2. Construction of promotion system
・3. Reform of existing business, BPR, and how to proceed
・4. System construction
・5. Establishing reform contents

Major issues in promoting DX
・1. Insufficient human resources
・2. Insufficient budget

Examples of companies that have succeeded in DX
・1.JapanTaxi (Nihon Kotsu): Vehicle dispatch application “JapanTaxi”
・2.Trial: Smart shopping cart
・3.Nissin Foods Supply Chain Clear Streaming Project
・4. Wacoal Holdings Co., Ltd .: 3D Smart & Try
・5. Long-established in “Jinya”
・6. Uchida Seisakusho Co. , Ltd.

Recommended books on DX

Recommended videos about DX

summary

What is DX? First of all, explain the meaning in an easy-to-understand manner

There are various ways of thinking about DX (digital transformation), but to put it simply, “to transform the business model and corporate culture by making full use of IT and digital technologies based on the needs of customers and society. It can be said.

The word DX was first used in 2004 by Professor Eric Stortermann, a professor at Umeå University in Sweden. Storterman defined the term DX as “the penetration of IT will change people’s lives for the better in every way.”

In addition, Gartner and the Ministry of Economy, Trade, and Industry have published the definition of DX.
What they have in common is that they use IT and digital technologies to transform corporate activities. DX can be said to transform the business model by changing business IT and reviewing business processes by utilizing data.

Furthermore, it can be said that the true DX is that the results will spread throughout society and change people’s lives.

What does the “X” in DX mean? Why not DT

Many people know that DX stands for “Digital Transformation”, but why is it DX instead of DT?
There are various theories about this, but in English, it seems that there is a custom to abbreviate trans with “x”. Translate, which means to translate, may also be abbreviated as late.

Differences between IoT and digitalization

Words that are easily confused with DX are IoT (Internet of Things) and digitalization.
IoT is that everything is connected by the Internet. Home appliances such as smart speakers and remote-controlled washing machines are familiar to us. IoT is also advancing in factories, and process control and inventory control that utilize sensors on production lines are examples.
Digitization is used to mean digitization. It can be said that business processes will be efficiently changed by digitization.
It cannot be called DX just by introducing both of them independently. DX refers to introducing IoT and digitalization to change business processes and organizational culture, and to transform “corporate activities themselves.” Keep in mind that IoT and digitalization are just the passing points of DX.

Why DX is needed now

Why is DX promotion being called for so much?
One major reason is that the spread of coronavirus infection requires new work styles and new customer experiences.
The way of working in a company has changed drastically, and many teleworks have been introduced. It became necessary to use digital technology to make up for the areas where face-to-face communication was not possible. Similarly, a major change has occurred in industries that have physical stores, such as the retail industry, and the situation has arisen in which customers do not come to the store. That’s where online shopping such as EC became widespread. Nowadays, various services have been created so that department stores can start serving customers online, and even online, we can provide services that are close to those of real stores.

However, although this situation was accelerated by the coronavirus, it was also a problem for some time. That is the ” Cliff of 2025 ” problem announced by the Ministry of Economy, Trade, and Industry in 2018.

A strong message was written that “if 2025 is reached without being able to transform existing business models and systems, economic loss of 12 trillion yen/year (three times the current level) may occur after that.” Was there.

5 steps to drive DX

So how do you make DX successful? I will explain it in 5 steps.

1. Management’s determination

First of all, it is important for the manager who is at the forefront of the company to express his intention, that is, to express his determination, “Let’s promote DX!”.
Promoting DX will significantly change corporate activities, so there may be some friction in the field.
Therefore, what is required of the management is to show the employees “the future beyond the promotion of DX”. It can be said that the first step in promoting DX is to show a vision of how the future of the company will improve by advancing DX even if there is friction now. The next step is to discuss what strategies to take to close the gap between the vision and the status quo.
A common mistake is to think about your strategy first. An easy-to-understand example is a case where you pay attention only to the introduction of tools. We must not forget that the strategy is based on the vision.

2. Construction of promotion system

The next step that DX promotion has decided internally is to build a promotion system.
Let’s put DX human resources in the right place, such as business producers who lead DX, business designers who act as assistants, and data scientists who analyze data.
However, the problem here is the shortage of DX human resources. Especially for companies that are new to DX promotion, it is highly likely that the above DX personnel are not in-house.
In that case, at the same time as developing DX human resources in-house, consider outsourcing to external partners and headhunting DX human resources outside the company.

3. Reform of existing business, BPR, and how to proceed

If DX human resources can be assigned, we will promote BPR (Business Process Re-engineering), which is a reform of existing operations.
BPR is to improve the work environment and create processes and rules that make it easy for employees to work. In corporate activities, daily operations are “natural” and are often not reviewed.
By reviewing business processes that utilize IT and digital technologies through BPR, there is a possibility that productivity will improve dramatically from the previous business.

4. System construction

After reviewing the business process, we will finally move on to system construction, which is also the key to promoting DX.
For example, the introduction of RPA (Robotic Process Automation) for routine work and the introduction of SFA (Sales Force Automation) for project management.
Using these systems and tools is very important in promoting DX. However, unfortunately, there are many cases in which we are satisfied with the fact that we have been able to convert to DX due to system construction and tool introduction, and we fail.
RPA and SFA are just meant. It can be said that DX succeeds only when it achieves its original purpose.

5. Establishing reform contents

As I mentioned in the first step, when a company promotes digital transformation, there is almost always a backlash within the company.
You can think of this repulsion as a result of anxiety caused by a drastic change in the way it used to be. For example, with the introduction of RPA mentioned above, some people may think, “Robots have robbed me of my work!”
The important thing here is to explain why you are driving DX. It is not the purpose of promoting DX to rob people of work, but the true purpose of DX is to change the role of people.
For those who oppose the promotion of DX, let’s explain carefully and let the reform take root.

Big challenges in promoting DX

1. Shortage of human resources

The biggest issue in promoting DX is the lack of “DX human resources” who can take the lead in the company and promote DX. With the declining working population due to declining population as a major background, human resources who know IT, are familiar with their own business, and can carry out company-wide projects are extremely valuable.

1. Budget shortage

Since the cost of DX has a large meaning of investing in the future, it is often the case that a sufficient budget cannot be secured. With some findings showing that 95% of DX projects fail, it is quite difficult to secure a large budget.

Case studies of successful companies with DX

Even Japanese companies are becoming more and more digital. Let’s check four cases where DX was successful.

1.JapanTaxi (Nihon Kotsu): Vehicle dispatch application “JapanTaxi”

Japan Taxi was the first in Japan to release a taxi dispatch app. It is now possible to call about 70,000 taxis owned by about 900 taxi companies nationwide from smartphones.
In addition, Japan Taxi also offers a cashless payment function using a tablet. It can be said that it has revolutionized the taxi industry, where cash payments have been the norm.

Currently, it has been integrated with “MOV”, which was the same taxi dispatch service, and is being expanded and expanded further under the service name “GO”.

2. Trial: Smart Shopping Cart

In the trial, which is a food supermarket, we have adopted a system called a smart shopping cart to make it DX.
With this system, products can be scanned and placed in a smart shopping cart equipped with a tablet, and final payment can be made without a cash register.
It may be near the day when the long line in front of the cash register, which is often seen in supermarkets during busy times, disappears.

3. Nissin Food Products Supply Chain Clear Stream Project

Nissin Foods, which is famous for its cup noodles, is also promoting digital transformation.
At NISSIN FOODS, delays in decision-making in the supply chain were an issue due to the old information system infrastructure and the scatteredness of individual systems and data.
Through the “Supply Chain Clearing Project,” we are conducting BPR and renovating business processes using digital technology. As a result, we have been able to strengthen cooperation not only within NISSIN FOODS but also with suppliers and distribution partners.

4. Wacoal Holdings Co., Ltd .: 3D Smart & Try

Wacoal, which is famous as an underwear maker, has been mainly trying on and selling at physical stores. Therefore, focusing on the stress of face-to-face customer service unique to underwear, we started the 3D measurement service 3D Smart & Try in April 2019.
It can be said that this service has enabled users to choose the best underwear without stress. Furthermore, Wacoal is a good example of how many women’s physical data can be obtained and used for the development of new products.

5. Long-established in “Jinya”

The long-established inn “Jinya” in Tsurumaki Onsen, Kanagawa Prefecture, has been working on DX promotion from a small capital. After introducing the in-house system “Jinya Connect”, which has the functions necessary for the inn business such as attendance and cost management such as reservation management, we have succeeded in increasing sales by 100 million yen to the black.

  • Industry: Ryokan
  • Issues: Annual deficit of 70 million yen, sloppy management, and inadequate communication between employees
  • Initiatives: Development and introduction of in-house customer management system “Jinya Connect”
  • Achievement: Increase sales by 100 million yen to return to profitability ・ Achieve a 144% increase in customer business sales through system external sales

The company has also started a new business of selling the developed system to the outside.

6. Uchida Seisakusho Co., Ltd.

Uchida Seisakusho, an automobile parts stamping manufacturer in Aichi Prefecture, has succeeded in promoting DX that connects factories and people remotely by developing IoT devices.

    • Industry: Metal processing industry (die making / press processing)
    • Challenges: Mold maker closure, unstable order volume, miniaturization of the entire industry
    • Details of efforts: Development of IoT device “Connected Factory” and dissemination to manufacturers
    • Achievements: Remote cooperation, the realization of short delivery times, and training of engineers through division of labor

Recommended books on DX

Many articles about DX can be found by searching the net, but the next recommended book is written by a person who has practiced DX, and it is very practical. It will be a very encouraging ally for everyone who is advancing DX from now on.

“Success = Human x DX-DX Corporate Transformation Textbook for Digital Beginners” Author: Yasuhiro Suzuki

Seven & I Holdings, a book that has promoted digital reform at Softbank, explains the essence of DX. The content that dares to focus on “people” rather than tools is very practical, and along the way, how to organize the business flow diagram, which is the heart of BPR, is also introduced.

If you are going to promote DX, or if you are promoting DX but are having difficulty, this is a book that you should pick up. There is always a place in this book to come back to when you run into difficulties.

“DX Management Picture Book” Author: Kazuo Kanazawa

Generally speaking, DX is mostly talked about from a corporate perspective, but this book is about DX from a customer’s perspective. DX is a corporate transformation, but if that transformation isn’t for the benefit of our customers and users, it has no ultimate meaning.

This book contains DX cases from 32 companies around the world. All of them explain the problems that customers and users had and the value that they gained after solving them, so it would be very helpful if there were cases close to the company.

 

“Survive in an era without after-digital offline” Author: Yasufumi Fujii

Generally speaking, DX is mostly talked about from a corporate perspective, but this book is about DX from a customer’s perspective. DX is a corporate transformation, but if that transformation isn’t for the benefit of our customers and users, it has no ultimate meaning.

This book contains DX cases from 32 companies around the world. All of them explain the problems that customers and users had and the value that they gained after solving them, so it would be very helpful if there were cases close to the company.

 

“Survive in an era without after-digital offline” Author: Yasufumi Fujii

This is a big hit book, so some of you may have read it. It’s not a direct DX story, but it explains what the digitized world is like.
This book points out that “the approach of online measures based on offline is wrong.” The future world that goes further is the idea that “everything goes online”.

It may be a bit exaggerated, but DX is a transformation. Being an extension of an existing business is only a change, and it may not be a true DX.

Recommended videos about DX

In the previous part, we introduced related books, but if you want to know more about DX and the latest IT more easily, we also recommend videos.
The content is increasing considerably on Youtube etc., so please take advantage of it.

IPA Channel

On this channel operated by the Information-technology Promotion Agency, Japan, you can watch videos of explanations such as DX White Paper.
If you have a solid government report and a lot of information, please take a look.

Hideki Hasegawa’s IT Bar Wandering Record

Hideki Hasegawa, who has been promoting DX at famous companies such as Tokyu Hands and Mercari, invites key DX persons to interview casually.
From the scene of drinking alcohol, you can hear the real voices, hardships, and ideas of the scene. Please enjoy it in your spare time such as by train.

Summary ~ DX = Transformation of own business ~

As you can see from the examples, DX comes in many forms. It can be said that what is the correct answer depends on the company.
What all DX companies have in common is that they are transforming their corporate activities by making full use of digital technology, IT technology, and data utilization. Many companies tend to fall into the form of DX = tool introduction, but the true DX is to review the business process, transform the business itself, and establish it. Let’s make DX promotion successful together.

If you ever want to know about similar things, check out the Facebook page Maga Techs.

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