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How to promote DX? Explanation of indicators, issues, and four corporate case studies in accordance with the guidelines!

  • I want to promote DX to solve labor shortages, improve customer satisfaction and profits
  • I want to decide the direction of DX promotion activities
  • I want to make DX promotion successful

Many people may feel that

When promoting DX, if you check the definition of DX and take into account examples and tips, you can proceed smoothly.

This time, we will introduce the background, examples, and issues of DX promotion.

Table of Contents

  • What is DX promotion?
    • DX definition
    • Ministry of Economy, Trade and Industry Guidelines
    • Ministry of Economy, Trade and Industry Promotion Indicators
  • Necessity of promoting DX and 3 reasons why it is promoted
    • Strengthen competitiveness, improve profits, improve customer experience
    • Solve the shortage of human resources
    • Response to globalization
  • 4 main examples of DX promotion companies
    • [Success Story] Kubota
    • [Success Story] JapanTaxi
    • [Failure case] P&G
    • [Failure case] Company B
  • Three things necessary to promote DX
    • Presentation of management strategies and goals
    • Securing human resources to promote DX
    • Securing tools for promoting DX
  • 4 challenges in promoting DX
    • Clarification of management strategy
    • Consistent system construction
    • Securing and developing DX human resources
    • Budget issues for IT materials
  • To promote DX

What is DX promotion?

DX promotion is to promote DX within a company. What is DX in the first place? Let’s check the definition of DX.

DX definition

DX (Digital Transformation) was proposed in 2004 by Professor Eric Stolterman of Umeå University in Sweden as “a technology that continues to evolve and has some impact on human life, and as a result, people’s lives change for the better.” It is the concept of “to do”.

In 2018, the Ministry of Economy, Trade and Industry of Japan announced that “companies will 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. , to transform operations, organizations, processes, corporate culture and climate, and establish a competitive advantage.”

In this way, it is said that companies use the power of technology such as data and digital technology to gain an advantage and enrich customers and society.

If you want to know more about DX, please read this article.

Ministry of Economy, Trade and Industry Guidelines

The Ministry of Economy, Trade and Industry’s ” DX Promotion Guidelines ” stipulates how to proceed with DX: “Management methods and mechanisms for promoting DX” and “Building an IT system that will serve as a foundation for realizing DX”.

The purpose of the DX promotion guidelines is to clarify the matters that management should control in realizing DX and building the IT system that will serve as its foundation, and that the board of directors and shareholders can use it to check DX initiatives. is.

Management style and structure for promoting DX

The following 5 are shown as management methods and mechanisms for promoting DX.

  • Presentation of management strategy and vision
  • Top management commitment
  • Establishment of a system for promoting DX
  • How investment decisions should be made
  • What DX Should Realize: Ability to Respond to Speedy Change

In this item, what is required of managers and leaders when promoting DX is not to use digital technology, but to clarify what kind of value will be created by digital technology. It is written

Building an IT system that will serve as a foundation for realizing DX

The following six points are shown in the construction of the IT system that will be the foundation for realizing DX.

  • System for building a company-wide IT system
  • Governance for building a company-wide IT system
  • Business unit ownership and ability to define requirements
  • Analysis and evaluation of IT assets
  • IT asset sorting and planning
  • IT system after renovation: Ability to follow changes

Building and introducing an IT system is essential for promoting DX.

The IT assets shown here include everything related to digital data, including hardware such as PCs and servers, software such as OS and applications, and data files packed with information.

Ministry of Economy, Trade and Industry Promotion Indicators

The Ministry of Economy, Trade and Industry has compiled the “DX Promotion Index and its Guidance” to promote digital management reforms in companies.

It enables each company to make a simple self-diagnosis regarding DX, and shares the recognition of the current situation and issues among related parties such as executives, business departments, DX departments, and IT departments, and realizes that leads to the next action. It aims to provide an opportunity for

The qualitative index consists of 35 items, and the items are selected with a focus on the issues that Japanese companies are currently facing and the issues that need to be addressed in order to solve them.

It consists of 9 main questions and related questions as shown in the figure above.

For these questions, a maturity level is defined according to the degree of achievement of each item, and by answering these questions, each company recognizes its current position in promoting DX as a maturity level. I can do it.

It is characterized by the fact that management plays a central role in answering questions.

Necessity of promoting DX and 3 reasons why it is promoted

Strengthen competitiveness, improve profits, improve customer experience

Utilization of customer data is expected to enhance competitiveness, increase profits, and improve customer experience.

In 2018, the Ministry of Economy, Trade and Industry of Japan

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.

As defined, you can expect a rich customer experience.

For example, by utilizing customer data, it is possible to provide services tailored to each customer, such as proposing more expensive services to customers who make large purchases, and distributing coupons that increase the number of purchases for customers who make fewer purchases. increase.

As the customer experience becomes richer, it also leads to stronger competitiveness among companies.

In this way, if DX is promoted, it is expected to strengthen competitiveness, improve profits, and improve customer experience.

Solve the shortage of human resources

For example, if an attendance management system is introduced, the attendance management system will replace the work that had been done by the attendance manager, such as registering the attendance time of each employee and reflecting it in the monthly salary. The burden is reduced.

Since existing attendance managers can handle other tasks, the lack of human resources will be resolved if DX is promoted in this way.

Response to globalization

It is said that DX is not progressing in Japan because IT education is not as advanced as overseas. However, in order to connect with people around the world in globalization, the promotion of DX is essential.

It is said that if DX is promoted, it will be possible to respond to globalization.

4 main examples of DX promotion companies

[Success Story] Kubota

Kubota is a company that provides total solutions using products such as construction and agricultural machinery that meet the needs of users around the world.

Task

Most construction machinery repairs are handled by the service engineers of local distributors, and depending on the experience and skills of the person in charge, there were cases where manuals alone were insufficient to provide support.

Decreased operation rates of construction equipment due to downtime are directly linked to a decrease in users’ profits, so there was a need for quick, efficient, easy-to-understand failure diagnosis support that was not affected by the ability of service engineers. .

In addition, since the need for failure diagnosis was the highest in the United States, the scope of operation start and effect verification was set in the United States market. As we were looking to expand globally after that, we needed a product development partner with knowledge of the global market.

Propelled DX

As a solution to improve time efficiency, we built a simple failure diagnosis flow that automatically displays inspection points and repair methods based on the input of error codes and failure symptoms generated by the machine. This makes it possible to quickly identify the failure location without relying on the knowledge and experience of service engineers.

In addition, by combining 3D models and AR, it is equipped with a function that allows you to visually recognize the location of failures inside construction equipment and the identification of target parts by holding up your smartphone. By eliminating the need to actually check the inside of the machine, we have made it possible to carry out efficient repairs.

In terms of UI design and design, we assigned a native designer with extensive experience in global projects from ACO of the Monster Lab Group, incorporated trends for US users, and restructured the Japanese manual for English-speaking countries. . This is because we were conscious of touch points that are easy for local users to use.

At the same time, I also contributed in terms of acting as a mediator in communication with the staff of Kubota’s local subsidiary.

For the user touchpoints, we adopted a UI design that is conscious of use at construction sites.

On the development side, we adopted Flutter, which is compatible with multiple devices. By constructing our own CMS and accumulating logs and user feedback, we are now able to collect a variety of information that will lead to future diagnostic flow improvements and potential failures.

result

Prior to the release, the app was announced for overseas distributors at MTG, and the UI design with excellent operability, as well as the mechanism that allows visual failure diagnosis using 3D models and AR, attracted a great deal of attention. rice field.

Future contributions are also expected in terms of educating service engineers and securing personnel.

In the future, this application is scheduled to be gradually rolled out to markets around the world, including Japan, and at the same time, expansion of target devices based on this application is also being considered.

[Success Story] JapanTaxi

JapanTaxi is an IT venture spun off from the information division of Japan Kotsu.

Propelled DX

JapanTaxi can be called the Japanese version of Uber, and it is a service that allows you to call a nearby taxi simply by launching the app, selecting a boarding location, and pressing the “Call Now” button. You can check the time it takes to be picked up and the fare rate before boarding.

JapanTaxi also has a JapanTaxi Wallet feature that allows you to complete payment before reaching your destination by scanning the QR code on the tablet in the back seat of the taxi with the app.

result

For customers, it can be said that they are providing a stress-free experience because they can pay smoothly even if they are in a hurry.

In addition, for Nihon Kotsu and affiliated stores, it has led to a reduction in loss, such as reducing the workload of cash management for drivers and securing change at the office. It also reduces the risk of crime such as cash theft.

Furthermore, JapanTaxi utilizes the JapanTaxi tablet in the back seat to start an advertising business as a new revenue source.

In-vehicle advertisements, which were common on trains and buses, have been brought to the back seats of taxis, increasing sales as an advertising medium for businessmen.

In addition, since it is possible to acquire a huge amount of movement data from each vehicle, the soil for developing various businesses in the future is growing.

[Failure case] P&G

Procter & Gamble is a leading American consumer goods company.

Task

In 2011, CEO Robert McDonald (at that time) advocated the DX initiative to become “the most digital company on the planet.”

The initiative had the vague goal of applying technology ( data analytics ) extensively to all of the company’s business units to improve consumer products and services.

result

While the return on investment (ROI) obtained from the huge investment made without specifying concrete targets was small in the recession after the global economic crisis, it resulted in a decline in competitiveness in some areas. I was.

McDonald resigned in 2013 after being held responsible for poor performance by shareholders.

[Failure case] Company B

Purpose

At Company B, the DX project leader introduced a highly functional AI and big data analysis system from a major IT vendor without defining detailed requirements.

result

Company B’s project did not consider whether the advanced system was really necessary for Company B, resulting in chaos during implementation.

The on-site employees were unable to use the system properly, and their work came to a halt.

As a result, the system was stopped for a week and the system was refurbished. During the week, the employees of Company B were unable to use the system, so it seems that they used paper to proceed with their work.

Three things necessary to promote DX

Presentation of management strategies and goals

Once management has decided to promote DX, share goals and strategies. Also, present the data that underpins your goals and strategies.

If you share it immediately, it will be easier to deal with doubts and questions of people involved in promoting DX.

Securing human resources to promote DX

In promoting DX, let’s secure human resources for promoting DX.

Various people are needed, such as those who manage the promotion of DX and those who are involved in system construction and introduction.

Since it takes time and money to educate and promote DX with only in-house human resources, there is also a means of procuring human resources for promoting DX from outside.

Think about how much human resources you need to promote DX, considering costs and time allocation, and whether you need to procure them from the outside.

Securing tools for promoting DX

We need human resources and resources to promote DX. Let’s secure the tools for promoting DX. Even if you say tools for promoting DX, there are various means such as AI, IoT , VR , and AR.

Decide and introduce the necessary means and tools for your goals and strategies in promoting DX.

4 challenges in promoting DX

Clarification of management strategy

As I introduced in the failure case, if the management strategy is not clear when promoting DX, it will lead to poor performance.

Without a clear strategy, no one will be able to take specific actions, and no one will be able to follow your instructions.

Since DX promotion requires knowledge of IT tools, it is difficult to formulate a management strategy, so clarifying the management strategy can be said to be one of the DX promotion issues.

Once you have set your goals and objectives, let’s set a concrete action plan so that everyone involved in promoting DX can easily understand it.

Consistent system construction

The introduction of IT equipment is essential for promoting DX. However, unless a consistent system is built, it cannot be promoted successfully.

If there is no consistency in system construction and introduction, the effect of promoting DX will not be felt. Just using IT materials alone will not lead to the purpose or increase sales.

Let’s reconfirm what kind of purpose there is in promoting DX, and devise what kind of system must be developed and introduced for that purpose.

Securing and developing DX human resources

We have funds and time to secure and develop DX human resources. In order to promote it with people who have not been involved in DX until now, we have time to introduce materials and learn about DX.

In the “DX report” published by the Ministry of Economy, Trade and Industry in 2018, the risk assumed when the existing system becomes a black box and remains as it is is called the “2025 cliff”.

In this way, Japan is behind in DX conversion, and another issue is the lack of DX human resources who are on the “doing side” of IT education.

In addition, considerable funds are required to procure DX human resources from the outside and attach consultants.

Therefore, it is not easy to secure and train DX human resources, and it can be said to be an issue in promoting DX.

Please see this article for DX human resources who are the key to promoting DX.

Budget issues for IT materials

The introduction of IT materials is essential for promoting DX, but it costs money. Depending on what kind of IT materials are introduced to promote DX, there are some that require a budget.

Some cloud services are relatively inexpensive, but introducing IoT and AI requires a considerable budget.

To promote DX

To promote DX, first decide what kind of results you want to achieve by promoting DX, and think about what you need for that.

Then, once you have clearly determined the necessary human resources, IT materials, funds, and time, make a concrete action plan toward your goals.

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