Due to the global spread of the new coronavirus, the importance of DX, which is the transformation of organizations and business models through digitization, is increasing.
However, many companies are struggling even if they are working on it.
Therefore, this time, we will introduce the challenges and success points of companies in DX, and the indicators (KPI) that are indispensable for realizing DX.
Table of contents
- What is the DX promotion index? Easy-to-understand explanation
- Composition of DX promotion indicators – 9 key questions
- What are the DX promotion indicators and their guidance?
- Three benefits of using DX promotion indicators
- You can unify the recognition of DX promotion within the company
- Able to compare with competitors
- Know what your company should do next
- Maturity level of DX promotion index – 6 levels
- Check other companies’ levels
- [4 steps] Self-diagnosis method for DX promotion index
- ① Recognize “DX promotion indicators and their guidance”
- ② Perform self-diagnosis based on the guidance
- ③ Fill in the self-diagnosis result in the “Self-diagnosis format ver2.3”
- ④ Submit self-diagnosis results from the “DX promotion portal”
- How to promote DX using the DX promotion index?
- Clarify and improve issues based on self-diagnosis results
- Get benchmarks to compare against your own
- Know the characteristics of leading companies promoting DX from analysis reports
- summary
What is the DX promotion index? Easy-to-understand explanation
The DX promotion index is a self-diagnostic tool and KPI established by the Ministry of Economy, Trade and Industry in 2019 for each company to grasp its current position in the promotion of DX.
KPI is widely used in marketing and management fields as a numerical value that indicates the degree of achievement of goals in an organization, and many people may have heard of it.
The government is also promoting DX because it is said that delays in DX will cause great damage as the number of workers decreases and digitization progresses. In relation to this DX promotion index, IPA has released the “DX promotion index self-diagnosis result input site” for the purpose of collecting and analyzing the self-diagnosis results of each company.
Composition of DX promotion indicators – 9 key questions
The Ministry of Economy, Trade and Industry (METI) created an index structure based on the issues that Japan is currently facing and the items necessary to solve those issues. The structure includes the following nine key questions that should be answered by the management himself/herself.
- vision
- Top management commitment
- structure
- mindset, corporate culture
- Promotion/support system
- Developing and securing human resources
- Application to business
- Building an IT system as a foundation for realizing the vision
- Governance/system
Sub-questions are items to be discussed and answered by managers, executives, business departments, DX departments, IT departments, etc., regardless of the topic.
What are the DX promotion indicators and their guidance?
The “DX promotion index and its guidance” was formulated by the Ministry of Economy, Trade and Industry in July 2019 in order to grasp the company’s situation toward the realization of DX.
In many Japanese companies, there are many issues, such as a lack of shared awareness of the future crisis and the mechanism for realizing DX for the entire company. Against this background, we asked about 30 companies to use the DX index on a trial basis and made improvements.
Regardless of their business model, many companies have started working to promote DX in the right direction.
Three benefits of using DX promotion indicators
There are three benefits of using the DX promotion index.
- You can unify the recognition of DX promotion within the company
- Able to compare with competitors
- Know what your company should do next
We will explain each below.
You can unify the recognition of DX promotion within the company
By using the DX promotion index, you can judge the degree of your company’s DX promotion based on an objective index.
In promoting DX, which is prone to failure, even a small misunderstanding between the parties concerned can be a fatal risk.
Related departments will gather to answer the DX promotion index, and it is essential to have a common understanding in the sense that they will be in sync at that time.
Show your DX vision using internal communication tools, and share your company’s DX progress using DX promotion indicators.
Able to compare with competitors
Self-assessment with DX propulsion metrics provides detailed benchmark data.
With this data, you can relatively compare your company’s maturity based on the DX promotion maturity of other companies, and you can compare with your competitors. In order to aim for global competition, let’s first aim to be a pioneer in promoting DX in the domestic market.
In addition, in individual data items, you can understand the items that are superior compared to other companies and the items that are not catching up. This can be said to be one of the benefits of using the DX promotion index.
Know what your company should do next
The DX promotion index has 6 levels.
Knowing your current level translates directly into knowing your next action, what you need to do to get to the next level.
It will be a valuable guideline in promoting DX, which has no mold in the process of practice yet.
Maturity level of DX promotion index – 6 levels
The DX promotion index does not evaluate the business model, but evaluates it with 35 items from the perspective of the company’s management status and IT. The rating is judged on six maturity levels, which are as follows:
Set targets for the next three years when the maturity level is assessed. By doing so, you can recognize what kind of issues you have to implement in order to achieve the target value.
According to the 2021 analysis report published by IPA in 2022, 19% of 486 companies were at maturity level 0. One out of four companies is not working on DX at all, and companies with a maturity level of 5 are one of Japan’s leading companies, and as a digital company, they have an advantage in global competition.
Check other companies’ levels
Companies with Level 3 or above are said to be leading companies, but according to this data, only 17.7% of the total have achieved this. However, not all level 3 and above companies were level 3 from the start.
Compared to companies with maturity level 0, companies that have not promoted DX and have not self-diagnosed with DX promotion indicators have lower awareness, and even if their own level is evaluated as low, they set targets and work properly. By doing so, we can survive in the global competition.
Also, it is important not to deviate from the essence of what DX is for, rather than achieving a high maturity level while proceeding based on the DX promotion index.
[4 steps] Self-diagnosis method for DX promotion index
The DX index self-diagnosis method is the following four steps.
- Recognize “DX promotion indicators and their guidance”
- Self-diagnosis based on guidance
- Enter the self-diagnosis result in the “Self-diagnosis format ver2.3”
- Submit self-diagnosis results from the “DX promotion portal”
We will explain each below.
① Recognize “DX promotion indicators and their guidance”
First, before you do the self-diagnosis, you can learn more in the 53-page PDF, so read “DX promotion indicators and their guidance” to understand the whole picture.
It is important to promote discussions among related parties such as executives and DX / IT departments to eliminate misunderstandings and understand the efforts of the Ministry of Economy, Trade and Industry and the importance of promoting DX.
② Perform self-diagnosis based on the guidance
Once you recognize it, let’s move on to action.
Basically, if you proceed with the self-diagnosis based on the guidance, the results will come out.
③ Fill in the self-diagnosis result in the “Self-diagnosis format ver2.3”
The self-diagnosis format is distributed as an Excel file, so download it and enter it.
If you fill in the format of the previous version, you will not be able to submit it.
In addition, by gathering and discussing not only in one department but also in different departments, it is possible to input while discovering differences in recognition for each department.
④ Submit self-diagnosis results from the “DX promotion portal”
From 2021, files can now be submitted to the “DX Promotion Portal” that can be applied online.
Most of the steps are as follows.
- Log in or create a gBizID account
- Select the DX promotion index button
- Select the self-diagnosis result submission button
- Browse to the file and select the start procedure button
- Fill in the message column and submit after confirming the contents.
A user manual for the DX promotion portal is also distributed, so please see here for details.
How to promote DX using the DX promotion index?
There are three ways to promote DX using the DX promotion index.
- Clarify and improve issues based on self-diagnosis results
- Get Benchmark Tests and Compare Against Your Own
- Know the characteristics of leading companies promoting DX from analysis reports
We will explain each below.
Clarify and improve issues based on self-diagnosis results
Of the three I will introduce, the most important thing is to clarify the issues from the self-diagnosis results and make improvements. Just by entering the self-diagnosis format of the DX promotion index, you can be aware of your company’s efforts through experience, but by checking the diagnosis results and setting target values, you can clarify the issues to be addressed.
Also, it is important to conduct regular DX diagnosis, not just once, but to share the recognition of DX throughout the company.
Get benchmarks to compare against your own
The benchmark means a level, and the company’s situation is analyzed based on the DX efforts of the company that submitted the self-diagnosis results.
By comparing, you can know the current location of your company’s DX efforts in Japan, and you can perform more advanced analysis.
The procedure for obtaining the benchmark is as follows.
- Log in to the DX Promotion Portal with your gBizID account
- Select the DX promotion index button
- Select Get Benchmark button
- Download the year you want to confirm when your company submitted the self-diagnosis results
September and October of each year are intensive implementation periods for the DX promotion index. For companies that have completed a self-diagnosis by October 31, 2022 and submitted the results to IPA, the 2022 preliminary version of the “benchmark” that can compare the DX efforts of other submitting companies and their own efforts. It will be available in mid-November.
Know the characteristics of leading companies promoting DX from analysis reports
IPA’s 2021 version of the DX promotion index self-diagnosis result analysis report reveals what kind of characteristics there are in leading companies that have been doing self-diagnosis for a long time.
However, the challenges of DX differ depending on the size of the company and the type of industry, so doing the same thing may have the opposite effect, so it is important to use it as a reference. It is important to think about your own industry and absorb what you can make use of.
summary
The DX promotion index is a groundbreaking guidance document that the Ministry of Economy, Trade and Industry has shown in detail about the actions that companies should take toward DX.
It describes not only the construction of IT systems but also the ideal form of management, and each company is required to evaluate the DX promotion project in a way that suits the company and solve the problems.
Let’s make the DX promotion successful by tur
