15 DX Success Cases｜Explanation of 3 success points from Japan and overseas cases!

In recent years, due to the spread of coronavirus infection and the labor shortage due to the declining birthrate and aging population, companies around the world are focusing on efforts to promote digital transformation (DX).

On the other hand, in Japan, the Ministry of Economy, Trade and Industry’s “DX Report” triggered a warning of the importance of promoting DX to companies. From a macro perspective, I feel a sense of crisis that “Japanese companies may end up being the losers in the digital competition.”

From now on, Japanese companies will have to tackle various digitalization issues, including the promotion of DX.

Nonetheless, isn’t there a lot of people who say, “I don’t know how to promote DX?”

Therefore, in this article, we will introduce actual “successful cases of DX promotion” separately for Japan and overseas.

Definition of DX (Digital Transformation)

The concept of DX (Digital Transformation) proposed in 2004 by Professor Eric Stolterman of Umeå University in Sweden is as follows.

Technology that continues to evolve and has some impact on human life, resulting in changes in people’s lives for the better

The Ministry of Economy, Trade and Industry of Japan has summarized the following definitions in the “DX Promotion Guidelines” issued in 2018.

Companies respond to drastic changes in the business environment, utilize data and digital technology, and transform their products, services, and business models based on the needs of customers and society.・Change the corporate culture and establish a competitive advantage

Erik’s definition is broad and encompasses all aspects of our lives. On the other hand, the definition by the Ministry of Economy, Trade and Industry is limited to business perspectives.

Many of the DX that are currently being talked about are mainly DX from a business perspective as defined by the Ministry of Economy, Trade and Industry.

It has become important for companies to quickly grasp changes in the external and internal environments and create new value by using the power of digital technology to guide management strategies.

[Japan] 10 successful examples of DX measures

While many Japanese companies are working to promote DX, there are only a few companies that are properly proceeding with the process of business transformation.

From here, we will introduce examples of achieving certain results in promoting DX. The 10 successful cases of DX in Japan introduced this time are as follows.

1. [Japan Post] Baggage transport by drone
2. [NEC] Provision of waiting time prediction system
3. [Mercari] Peer-to-peer trading system
4. [SoftBank] Improving operational efficiency of call centers
5. [Sumitomo Mitsui Banking Corporation] Automatic analysis of customer feedback
6. [JTB] Application development for foreigners
7. [FamilyMart] Practical application of unmanned payment system
8. [Otsuka Pharmaceutical] Creating a database for medical record management
9. [RIZAP] Fastest progress through data analysis
10. [Kagoshima Bank] Introduction of cashless payment

I will explain each.

① [Japan Post] Baggage transport by drone

Japan Post has begun using drones to transport parcels preferentially to areas where transportation costs are high.

In the background, there was a problem in the transportation industry, “In response to the increase in distribution volume due to the expansion of online shopping, we want to solve the problem of labor shortages that occur with conventional transportation methods.”

Results of DX promotion

▼ Reduced burden on delivery staff

The self-sustaining flight function installed in the drone can automate land delivery and naturalization to the warehouse, which will reduce the burden on delivery personnel.

Japan Post has indicated a policy of preferentially introducing it from places where transportation is costly and time-consuming, such as mountainous areas and remote islands.

In addition, currently, the locations where fully automated delivery is possible are limited due to legal regulations, but it is expected that the labor shortage in the logistics industry will be improved if the law is revised.

▼Reduction of delivery time

Even in areas where land transportation is difficult, such as mountains, seas, rivers, and lakes, drones can be used for air transportation, enabling quick delivery because it can be moved in a straight line.

In the delivery trial conducted in March 2020, it took nearly 20 minutes by land, but delivery by drone was completed in about 10 minutes.

(2) [NEC] Provision of waiting time prediction system

Source: NEC official website

NEC has provided a “Waiting Prediction System” that analyzes and visualizes security checkpoints at the Haneda Airport International Passenger Terminal (the system began full-scale operation in October 2019).

We use “crowd behavior analysis technology” to detect congestion from images such as surveillance cameras, and 3D stereo visual sensors to capture the movement of people.

Results of DX promotion

▼Innovative improvement of productivity through automation of work and labor saving

The introduction of the above system has not only improved the convenience of passengers, but has also resulted in the leveling of the utilization rate of the two inspection sites and the improvement of the punctuality of aircraft operations.

In the future, we aim to improve the prediction accuracy of artificial intelligence in this system and provide information such as waiting time in several hours.

③ [Mercari] Peer-to-peer trading system

Source: Mercari official website

Mercari is a service that enables a trading system between individuals. We built an online flea market for individuals to sell items that they no longer need, and for those who need them to purchase the items.

In addition, from 2019, we are expanding the range of services, such as starting a smartphone payment service called Merpay.

Results of DX promotion

▼ Lower hurdles for person-to-person transactions

In conventional Internet auctions, it was common to trade from a PC, but the introduction of a trading system that can be completed on a smartphone has lowered the hurdles for transactions between individuals.

In addition to completing transactions only on the Internet, it is also highly convenient, such as “can be used regardless of location” and “payment, shipping, and receipt”.

④ [SoftBank] Improving operational efficiency of call centers

SoftBank has realized operational efficiency by DXing the processing of the “lost item notification request form” that arrives when the mobile phone at the call center is dropped.

The system has come in handy for reading large volumes of documents, simplification of confirmation work, and high character recognition accuracy, and it has become an indispensable system for transcription work.

Results of DX promotion

▼Reduction of personnel

Previously, the goal was to complete the input of 200 request forms a day with a team of 10 people on the same day, but after promoting DX, we realized that one person could complete the work.

In addition, the effects of the introduction can be seen everywhere, such as a reduction in mistakes due to the lack of human work, and a reduction in physical and mental fatigue that allows people to focus on other tasks.

⑤ [Sumitomo Mitsui Banking Corporation] Automatic analysis of customer feedback

Sumitomo Mitsui Banking Corporation introduced a system that can automatically analyze “customer feedback” using big data analysis technology provided by NEC. In addition, it is now possible to aggregate the grouped contents and grasp chronological changes.

Results of DX promotion

▼Improve the quality of customer service

It is now possible to automatically classify content, such as summarizing and creating headlines, which was conventionally done by humans.

As a result, results have been confirmed in various applications, such as speeding up customer response and creating new services that reflect changes in customer feedback.

⑥ [JTB] Application development for foreigners

JTB has developed an app for foreigners (JAPAN Trip Navigator) in collaboration with Navitime Japan and Microsoft Japan, and started offering it in February 2018.

JAPAN Trip Navigator is a service that provides information on more than 100 model plans, such as the number of spots, required time, and efficient ways to visit sightseeing spots.

Results of DX promotion

▼Inbound strategy

By analyzing the behavior data and preference data of foreign tourists visiting Japan obtained from the app, it is now possible to focus on supporting companies working on inbound strategies.

In addition, the image recognition function makes it possible to capture information from images uploaded on SNS, making it an indispensable app for users’ travels.

(7) [FamilyMart] Commercialization of an unmanned payment system

From the end of March 2021, FamilyMart will open a store with an unmanned payment system.

In contrast to ordinary self-checkout systems, where customers read barcodes and register products, this unmanned payment system uses ceiling cameras and shelf sensors to automatically perform everything from entering the store to picking up products.

Results of DX promotion

▼ Suppression of shoplifting

In the unstaffed stores that have opened in the past, there is a tendency for the incidence of shoplifting and underage drinking to be lower than in regular stores. The mass installation of sensor cameras seems to have become one of the major deterrent factors.

▼Labor cost reduction

With the introduction of the unmanned payment system, it is now possible to operate with a minimum of 1 person, whereas in the past a minimum of 2 people were required. As a result, we have succeeded in reducing the large “labor cost” among the costs.

⑧ [Otsuka Pharmaceutical] Creating a database for chart management

Source: Otsuka Pharmaceutical Co., Ltd. official website

Otsuka Pharmaceutical has established a joint venture, Otsuka Digital Health, with IBM Japan, and is promoting sales of the data analysis solution MENTAT.

* “MENTAT” is an electronic analysis solution that incorporates IBM’s artificial intelligence Watson technology targeting psychiatry.

Results of DX promotion

▼Treatment plan suitable for the patient

By introducing “MENTAT”, it is possible to perform language processing on large amounts of text information, making it possible for medical personnel to extract patient symptoms.

Specifically, language analysis of electronic medical record data provides a quantitative understanding of patterns of changes in symptoms and trends in patients who repeat hospital admissions and discharges.

⑨【RIZAP】Progress in the shortest time by data analysis

Source: RIZAP GROUP official website

RIZAP, which became famous for “committing to results”, developed a business that introduced technology to golf training.

Specifically, it collects data such as the acceleration and angular velocity of the customer’s swing with a small, lightweight sensor pointed at the golf club.

Results of DX promotion

▼Visualization of improvements

We are now able to provide the best lesson plan because we can visualize improvements according to the customer’s goals.

In addition, by accumulating a huge amount of information such as swing data and scores as big data, we are committed to helping our customers improve as quickly as possible.

⑩ [Kagoshima Bank] Introduction of cashless payment

Source: Kagoshima Bank official website

Kagoshima Bank, which aims to revitalize the region by utilizing the spread of cashless payments, has opened a completely cashless commercial facility “Yokado Kagoshima”.

It is attracting attention as a commercial facility that makes full use of the latest technology has appeared in a local city where cashless payment has not penetrated.

In addition, along with the opening of the facility, we have developed our own cashless payment application “Pay Don”, and the DX of local commercial distribution is steadily progressing.

Results of DX promotion

▼Cashless among the elderly

Pay Don has created an opportunity for elderly people who have never used cashless payment to experience the convenience of cashless payment.

The usage rate of “Pay Don” in the facility accounts for 25%, and it is thought that the reason for its spread is that the threshold for introduction was lower than other payment apps.

[Overseas] 5 successful examples of DX measures

In recent years, companies around the world are developing new business models and services by promoting DX. Services such as “Netflix” and “Microsoft” are services that overturned common sense a few years ago, but now many people use them for granted.

Here, we will take up overseas DX measures such as those mentioned above. The following five successful cases of overseas DX measures will be introduced this time.

1. [Netflix] Revolutionary video distribution service
2. [Spotify] Establishment of the streaming system
3. [Microsoft] Migration to cloud networks
4. [Airbnb] A platform that mediates vacation rentals
5. [Uber] Taxi dispatch app

I will explain each.

① [Netflix] Revolutionary video distribution service

Source: Netflix official site

Netflix is ​​a video distribution service that now boasts about 200 million registered users worldwide. We have abandoned the successful DVD distribution business model and adopted a new business model of video distribution.

Results of DX promotion

▼Establishing a subscription

Netflix rolled out subscriptions to improve customer retention and stabilize customer lifetime value.

We succeeded in acquiring user satisfaction and continuation rate by providing the original value of rental videos, which is cheaper than purchasing, without the taste of late fees, which is indispensable for the rental business.

② [Spotify] Establishment of the streaming system

Spotify, which originated in Sweden, is one of the world’s largest music distribution services, boasting over 40 million songs and over 100 million members. The mechanism that allows you to easily listen to tens of thousands of songs with a single smartphone has changed the norm in the music industry.

By utilizing the user’s viewing history data, it displays recommended songs that match the user’s taste and provides opportunities to match new music.

Results of DX promotion

▼Creating new ways to enjoy music

In the past, it was common to download music by purchasing or renting CDs. With the entry of Spotify as a monthly flat-rate music service, it has revolutionized the way music is listened to.

In addition, the ability to share your favorite songs and playlists with family and friends has contributed to a shift in the value of music from “owning” to “sharing.”

(3) [Microsoft] Migration to cloud networks

Microsoft, known for its Windows and Office series, which have the most users among OSs, has changed its strategy to move its main service to a cloud network service.

Results of DX promotion

▼ Improved convenience

Before the launch, competition with competitors was intensifying due to factors such as people choosing tablets instead of PCs and the appearance of services that could be used in the same way as Office.

Therefore, Microsoft dramatically improved convenience by providing Office 365, which had been sold outright until then, as a cloud service.

In addition, by selling on a monthly basis, it has become possible to appeal to the demographics that would have been difficult to purchase if they were outright purchases.

④ [Airbnb] A platform that mediates vacation rentals

Airbnb is a platform on the Internet that “utilizes vacant rooms at home and provides accommodation services.” Airbnb offers vacation rentals in over 30,000 cities in over 192 countries around the world.

In the past, accommodation reservations were mainly made over the phone, but Airbnb has introduced digital technology to complete reservations through interaction on the platform.

Results of DX promotion

▼Systems that meet latent needs

There was a latent need on the host’s side, I wish there was a way to make money by renting out my room,'' and a detergent need on the guest's side,More people are looking for cheap ways to travel online.”

In this way, Airbnb has built a “big wave of the market” that the times need as a business.

⑤ [Uber] Taxi dispatch app

Speaking of Uber in Japan, the image of “Uber eats” has permeated, but the core of Uber’s business is a car dispatch service.

Unlike general taxi dispatch services, Uber disposes of personal cars registered with Uber, not taxis.

Results of DX promotion

▼Stable service quality

Uber is a system where users evaluate drivers, so it is designed to eliminate drivers with bad driving manners. In addition, since the driver can also evaluate the user, the user will have a moderate attitude and the quality of service will be kept constant.

In addition, since the fee is settled through the Uber app, it is a mechanism that prevents financial troubles such as rip-offs.

 Three points for successful DX

The three points that make DX successful are the following three.

1. Awareness reform within the company
2. DX starts small
3. Smooth information sharing

I will explain each.

1. Reform mindset within the company

Due to the impact of the new coronavirus, many business owners should understand the necessity of DX (digital transformation).

However, there are cases where the management side does not have a sense of issue regarding the promotion of DX. In that case, let’s promote DX from the bottom up. In the bottom-up process, proposals are made based on improvement requests from each site.

Since it is important to understand the situation on the ground and share a vision, it is a good idea to form a cross-departmental team.

By creating a cross-organizational team, even large-scale projects are less likely to slow down.

2. DX starts small

In many cases, the first obstacle to start DX is the “lack of understanding by all employees”. When I try to start something new, I get negative opinions such as “What is DX?”

It can’t be helped that there is a difference in the amount of heat from the people around you, but no matter how much heat you have, without the understanding of those around you, it is impossible to promote it as an organizational unit.

Therefore, it is important to create a common understanding of “why we promote DX” and “what will happen if we promote DX”, and to work towards a single goal for the entire organization.

As the first step, let’s proceed with DX on a small scale, starting with colleagues who are close to you. It is recommended to proceed step by step, such as yourself → surroundings → organization.

3. Smooth information sharing

DX needs to be promoted as an organization. To that end, let’s prepare the environment so that “necessary information can be obtained immediately”.

As a specific maintenance method, it is recommended to use the “Information Sharing Tool”. By using the tool, you will be able to obtain benefits such as improving work efficiency, reducing communication costs, and sharing knowledge and know-how.

Also, even if you don’t have IT knowledge, if you can easily use the tools, you will be much closer to promoting DX.

summary

So far, we have introduced successful cases of DX promotion, but they will be important considerations when converting to DX.

However, behind the success stories lie many failures. There is no guarantee of success even if the same measures as successful cases are introduced to your company.

Instead of relying too much on success stories, it is effective to consider them as a reference for promoting DX.