In recent years, due to the influence of the new coronavirus, the promotion of remote work has increased rapidly, and DX (digital transformation) has been attracting attention.
However, in the 2019 IMD (Swiss business school) “Digital Competition Ranking” in the world, Japan was ranked 23rd (1st: USA, 2nd: Singapore, 3rd: Sweden).
By the way, South Korea is 10th, China is 22nd, and Taiwan is 13th, which shows that Japan’s digital competitiveness is lagging behind other Asian countries.
For Japan, which is lagging behind other countries in DX, the DX business is one of the areas where demand will increase in the future. However, many people say, “I don’t know how to proceed with the DX business.”
Therefore, this time, we will explain in detail the procedure for promoting the “DX business” and success stories of other companies.
I’m currently thinking about doing a DX business in-house, but I’m wondering, “How are other companies actually using digital technology to do business?” It is a must-see content for managers and executives who think, so please read it.
Table of Contents
- What is DX?
- The reason why the DX business is attracting attention
- Procedures for promoting the DX business
- ① Purpose setting
- (2) Current situation analysis
- ⑤ Project execution
- ⑥ Effect measurement
- Five important points when promoting the DX business
- 5 Successful Cases of DX Business
- (1) Local governments – introduction of AI chatbots
- ② IKEA – Introduction of VR
- ③ GMO Make Shop – CRM implementation
- ④Try Group – Data Utilization
- ⑤Shake Shack-Introduction of kiosk terminals
- 3 Japanese companies that are developing DX business
- LegalForce Co., Ltd. Legal Force DX
- Aidemy Co., Ltd. – DX human resource education
- Mitsubishi Research Institute Group – Consistent support for DX
- DX promotion tools that can be introduced for DX business
- Data storage/sharing
- Efficiency of simple work
- Storage and analysis of big data
- Production control
- Back office
- Customer support
What is DX?
First, let’s review the definition and interpretation of DX (Digital Transformation).
In conclusion, the most pervasive definition in Japan is that “a company responds to drastic changes in the business environment, utilizes data and digital technology, and transforms its products, services, and business models based on the needs of customers and society. At the same time, we will transform our operations, organizations, processes, and corporate culture/climate to establish a competitive advantage.”
The above definition was announced by the Ministry of Economy, Trade and Industry in 2018 in the ” DX Promotion Guidelines “, and is mainly from a business perspective.
In addition, the general definition of DX in the world is “a technology that continues to evolve and has some impact on human life, and as a result, people’s lives change for the better.”
The reason why the DX business is attracting attention
The existence of the “2025 Cliff” can be cited as the background to the focus on the DX business.
The 2025 cliff refers to the fact that the Ministry of Economy, Trade and Industry announced on September 7, 2018, “If Japan’s DX competitiveness declines in the future, the economy will grow at a maximum of 12 trillion yen/year (approximately three times the current level) after 2025. It is a common name for the prediction that a loss will occur.
The existing IT systems of Japanese companies are facing problems of technical obsolescence and black-box systems.
Such an IT system is called a legacy system, and it is difficult to modify the system on your own.
Since the 2025 cliff prediction was advocated, how Japanese companies with legacy systems will promote DX has become a major issue.
In addition, recently, the market capitalization of large overseas IT companies such as GAFAM, which conducts DX business, has grown to a level comparable to the national budget of a certain country, which is one of the reasons why DX business is attracting attention.
Procedures for promoting the DX business
One of the reasons why most companies fail to proceed with the DX business is that they proceed with the project without following a solid procedure. Here, if you don’t know how to promote DX in-house, let’s take a look at the steps to promote the next DX business.
The procedure for promoting the DX business is the following 6 steps.
- Purpose setting
- Current situation analysis
- organizational structure
- project execution
- Effect measurement
I will explain each.
① Purpose setting
When starting a DX business, let’s clarify the purpose setting at the very beginning. As mentioned earlier, the definition of DX is broad, and the digital technology applied differs depending on the purpose, such as “do you want to improve internal operational efficiency” or “do you want to expand revenue with a new business model?”
In order not to waste investment funds and time in the DX business, first set a specific direction and numerical goals, make it easier to decide the direction of the strategy, and improve the motivation of employees to work on the business. should do.
(2) Current situation analysis
After the goal setting is completed, in order to measure the gap between the current situation and the achievement of the DX business, we will analyze internal resources, human resources who can respond to digitalization, and what kind of technology will be required to achieve the business. Let’s.
After the current situation analysis clarifies the necessary human resources and digital technology to reach the goal, it is necessary to consider “by when will we have the appropriate human resources and technology”, “when will the project start in earnest, and how much effect will be achieved?” Do you want to do it?”
Once the planning is complete, it’s time to actually organize the organization. Since the organizational structure that can efficiently promote the business differs depending on the purpose of the business, care must be taken when organizing the organization.
We have organized each organizational structure to streamline the DX business below, so if you want to know the structure of a representative organization, please check it out.
⑤ Project execution
When executing a project, let your internal employees know about the promotion of DX.
In order to make the project a success, we need the skills of the executives who will develop the business, but it is also necessary to create a situation in which each and every employee in the company accepts change.
If we can’t make it known, it will end up as an event within one department, and synergy for the company as a whole may be created.
⑥ Effect measurement
Once the project is complete, let’s measure how effective it was in converting the company to DX.
In addition, it is not always possible to achieve 100% of the target figures set in planning at the time of project completion.
If the goal has not been achieved, pursue the cause of the non-achievement and make a concrete plan again, such as “Resolve the current problem by October”.
Five important points when promoting the DX business
From here, we will introduce the points of companies that have actually succeeded in converting to DX when promoting the DX business.
The following is a summary of a survey by McKinsey & Company on “Characteristics of companies that have successfully converted to DX”.
|Do you have a leader with accurate digital insights in your department?Do you have appropriate IT training in-house to prepare for the technology required for future work?Have you introduced flexible working styles to improve productivity?Are you using the latest digital tools on a daily basis to streamline your operations?Is the specific vision of the DX promotion that the company is aiming for known to all employees?|
When promoting DX in-house, from the perspective of management, changes in actual effects cannot be visualized, and you may feel uneasy.
However, if you keep the above 5 points firmly in mind and make daily improvements to the DX business, you will be able to differentiate yourself from other companies over the long term of 3, 5, or 10 years.
5 Successful Cases of DX Business
Here are five examples of how DX was introduced and achieved results.
- Local Government – Introducing AI Chatbots
- IKEA – VR introduction
- GMO Make Shop – CRM introduced
- Tri Group – Data Utilization
- Shake Shack-kiosk terminal introduction
I will explain in detail from now on.
(1) Local governments – introduction of AI chatbots
Local governments are accelerating the introduction of AI chatbots.
AI chatbots are mainly used for inquiries.
Local government offices are mainly open during the daytime on weekdays, but using an AI chatbot will allow residents to make inquiries immediately at any time, improving convenience for residents.
It is also a great advantage to be able to respond smoothly to inquiries in foreign languages using automatic translation.
In addition, you can save labor costs that were previously allocated to respond to inquiries.
② IKEA – Introduction of VR
The world’s largest furniture store “IKEA”, which originated in Scandinavian Sweden, has the ambition of “using VR / AR technology to allow customers to experience the world of IKEA on the spot ” as one of the DX promotions . .
IKEA released a free VR app called “IKEA VR Experience” in 2016 . With this app, you can walk around the IKEA kitchen in virtual space.
Subsequently, in 2017, we introduced a VR simulator service at stores in Canada.
With this VR service, you can make hot cakes in virtual space and use your own designed kitchen.
There are benefits for both companies and customers, such as closing mismatches between furniture and rooms after purchase and dramatically reducing the return rate.
It also has the advantage of being able to discover new corrections by receiving feedback from customers.
③ GMO Make Shop – CRM implementation
Before introducing CRM, GMO Make Shop used Excel to manage project information.
The main role of CRM is customer management.
Centralized management of customer information has eliminated discrepancies in information and failure to respond to issues.
As a result, we achieved 192% of sales, shortened meeting time from 90 minutes to 15 minutes, and reduced business mistakes due to customer management. This is just one example of the enormous results achieved by the introduction of IT tools.
④Try Group – Data Utilization
Try, which has mainly developed the home tutor dispatch business, has succeeded in acquiring a large number of students, surpassing many private schools, through a free video business called “Try IT” since 2015 .
“Try IT” consists of free video lessons and fee-based Q&A.
It is characterized by explaining the main points of the lesson in a short lesson video of 15 minutes each so that the students can concentrate .
In addition, we are creating a system that analyzes the characteristics of past students and enables them to learn efficiently.
“Try IT” can be said to be one of the examples of successful DX conversion utilizing the vast amount of educational know-how and student performance data accumulated in the tutoring business .
⑤Shake Shack-Introduction of kiosk terminals
Shake Shack is a hamburger shop founded in New York, USA.
Shake Shack opened a fully cashless store in 2017.
At this store, customers self-order using a kiosk terminal. The order will be sent to the kitchen as it is, and a message will be sent to the registered phone number when it is completed.
For the store side, there are advantages such as reduced labor costs and no need to close the cash register because it is cashless.
There is also an advantage for the customer side that the congestion of the cash register is eliminated.
As a result, in addition to reducing labor costs, this store achieved a 15% increase in the unit price per customer. The need for DX conversion is increasing in the food and beverage industry where there is a serious labor shortage.
3 Japanese companies that are developing DX business
LegalForce Co., Ltd. Legal Force DX
LegalForce is a company that supports DX conversion of legal procedures.
LegalForce mainly supports checking contracts.
When you upload a contract, AI supervised by a lawyer will identify points to be careful of. It also displays clauses that are useful when amending the contract.
Besides that, it also has a contract template and a function to manage the version of the contract.
Aidemy Co., Ltd. – DX human resource education
Aidemy is a company that supports the development of DX human resources centered on AI.
DX human resources are human resources who use data and digital technology to transform companies into strong organizations. In particular, DX human resources who are familiar with the company’s culture and systems are in demand.
Aidemy provides an e-learning platform for DX human resource development called “Aidemy Business”.
Aidemy Business provides various learning contents and learning support for learning DX.
In addition, the functions for administrators are also substantial and the progress of learners is visualized, so it is possible to find future DX leaders.
Mitsubishi Research Institute Group – Consistent support for DX
The Mitsubishi Research Institute Group consistently supports DX conversion from strategy planning to system, organization, and implementation.
We work in a wide range of fields, including local governments, administration, finance, and think tanks, and provide support that suits each.
We have declared that we will systematically promote DX so that we can achieve all objectives from the short to medium- to long-term, rather than ad hoc digital utilization.
For that reason, we design the way to achieve the goal called “DX Journey” according to the customer and support problem solving.
DX promotion tools that can be introduced for DX business
The following eight DX promotion tools can be introduced for the DX business.
- Data storage/sharing
- Efficiency of simple work
- Storage and analysis of big data
- Production control
- Back office
- Customer support
I will explain each.
With the spread of the Internet, companies have become increasingly paperless, and a huge amount of data has been accumulated, making management more complicated.
Currently, the mainstream of data storage is to utilize cloud storage services that allow information to be stored on servers on the Internet. Popular cloud storage services include Google Drive, DropBox, etc.
In terms of data sharing, online meeting tools such as Zoom, Google meeting, and Microsoft Teams are often used. Online meeting tools have exploded in popularity as companies have started working remotely due to the new coronavirus.
Efficiency of simple work
In recent years, as Japan’s labor shortage has been criticized, the automation of work using robots is progressing.
The most popular technology today is RPA (Robotic Process Automation), a service that automates data transfer work and simple input work. Famous RPA services include WinActor, Blue Prism, BizRobo!
Storage and analysis of big data
With the promotion of DX, the storage and analysis of big data has become an indispensable digital technology when building new business models. .
The IT tool that can solve such problems is “BI” (Business Intelligence). BI is a tool that collects and analyzes a large amount of data accumulated in a company, assists in quick decision-making, and contributes to the development of management.
Famous BI tools include Qlik Sense, Tableau and Dr.SUM.
Currently, DX promotion has spread to manufacturers and factories.
An IT tool called “EPR” (Enterprise Resource Planning), which is particularly attracting attention in the manufacturing industry, can prevent communication loss and improve work efficiency by unifying information management between departments.
Famous EPR tools include Reforma PSA, cloud ERP freee, etc.
In recent years, an increasing number of companies are actively introducing IT tools to improve the efficiency of back-office operations such as human resources, finance, and general affairs.
For example, there are “Focus U Payslip” for payroll and expense management system, “Money Forward” for accounting software, and “Jobkan Attendance Management” for personnel management system.
In recent years, sales-related DX tools are also becoming popular. Among them, “Salesforc” is a service that contributes to the operating profit of many companies.
Salesforce is a service that can manage customer information and business negotiations, and automatically learn and analyze accumulated data with AI.
Currently, in the DX business of the marketing department, there is the introduction of MA tools and CRM tools. Its main functions include customer management, analysis, and inquiry management, making it an indispensable tool for developing a customer-centric business.
Famous ones include Sansan, Marketo Engage, SATORI, etc.
Currently, as a customer support DX business, an increasing number of companies are adopting chatbot tools to reduce labor costs and improve operational efficiency.
In addition to robots replying to customer texts, tools have also appeared that have the function of accumulating customer texts as data. A popular customer support tool is Repl-AI.
This time, we have explained the DX business, such as the promotion procedure and success stories of other companies. How was that?
In recent years, the number of companies conducting DX business has been increasing year by year, and this trend is expected to continue in the future.
In order not to miss this wave of DX promotion, companies will need to properly face the DX business in the future.