Some of the managers who want to work on DX in their own company or who are already working on it may be in trouble because they do not know how to proceed with DX.
In order to realize DX, it is important to set goals from a long-term perspective, such as what kind of value a company will provide and how to increase corporate value. In the article, we introduce how to proceed with DX and examples of companies that are working well. By all means, if you are going to work on DX, please refer to it.
What is DX
DX is an abbreviation for digital transformation, and in order to maintain and improve competitiveness and increase corporate value in today’s rapidly changing business environment, we will utilize the latest digital technology and data to transform corporate business models and It refers to efforts to change the corporate culture.
DX is being worked on on a national scale, centered on the Ministry of Economy, Trade and Industry, and the realization of DX is an urgent task, such as setting up an organization called “Research Group for Digital Transformation” and publishing a DX report that summarizes the discussions. promoted as
Background behind the promotion of DX
The reason why DX is being promoted throughout Japan is summarized in the “2025 cliff” pointed out in the Ministry of Economy, Trade and Industry’s DX report (*) . The “2025 cliff” is a huge risk that can occur if DX is not realized by 2025.
Japan’s IT systems are becoming obsolete, and such systems are called “legacy systems” in the DX Report. are said to be very costly.
Furthermore, it has been pointed out that if DX cannot be realized by 2025, it will not be possible to handle the enormous amount of data that will increase in the future, making it difficult to realize DX and losing competitiveness.
Therefore, it is necessary to reform the organization itself by renovating the legacy system and utilizing new digital technology and data to promote DX.
Means and purpose of DX promotion
The promotion of DX is an urgent task throughout Japan, and an increasing number of companies have started working on it. However, some companies confuse the means with the ends. Once again, let’s check the means and purpose of DX here.
Modern companies are exposed to an uncertain business environment, such as the spread of the new coronavirus, war, and sudden disasters. The original purpose of DX is to flexibly respond to that environment, establish a competitive advantage in the market, and increase corporate value.
The means for this purpose are the utilization of the latest digital and AI technologies, big data, and so on. However, there are also companies that focus solely on the utilization of digital technology and data, and that itself is a goal.
In this case, the original goal of DX is not clear, making it difficult to realize essential DX, which is to transform the company and improve its corporate value and competitiveness. In promoting DX, it is important to properly recognize the means and goals.
How to proceed with DX
From here, we will explain the proper way to proceed with DX according to the following steps.
- Clarify company issues and clarify goals
- Create a foundation for promoting DX
- Introduce digital tools to build a system
- Securing necessary human resources
Clarify company issues and clarify goals
When proceeding with DX, first identify your company’s issues and then clarify your goals, such as how you want to respond to new needs and customer issues through DX. Since DX will be an initiative to significantly transform the company itself, it is necessary for managers to think about it first.
Also, since DX is an initiative that takes a considerable amount of time, if you do not proceed while properly confirming that you are progressing toward your goals, you will be distracted by the introduction of digital technology and data utilization, and you will lose sight of your DX goals. It can lead to a loss.
Therefore, once the goal is clarified, it is important to set measurable numerical targets such as KGI and KPI, and to proceed while checking progress in detail on a regular basis.
Create a foundation for promoting DX
Since DX involves corporate transformation, it is not something that can be promoted only by management or some departments, but must be tackled by the entire company. Therefore, once managers have clarified their goals, they must clearly explain to employees the necessity of DX and what the company wants to be like.
It is also effective to set up a dedicated team to promote DX, as it is necessary to work closely with management and other departments.
In promoting DX, the process of learning how to use new systems and tools and becoming able to use them is often a burden for employees. In order to ensure that employees are motivated to work on DX without lowering their morale, it is important for managers to provide detailed explanations and to set up a dedicated team to facilitate communication inside and outside the department.
Introduce digital tools to build a system
In promoting DX, it is necessary to renovate old systems that are used only within the company or department, called “legacy systems,” and instead build systems that can introduce the latest digital technology. .
When renovating a legacy system, it is necessary to change the software, hardware, and data that have been used so far, such as migrating applications, storage, and databases, and introduce new digital tools and AI tools. are required to do so.
Securing necessary human resources
In promoting DX, as I mentioned just before, it is necessary to build a system that can utilize the latest digital technology and data, but at the same time, we also need human resources who can build and utilize such a system.
When introducing new digital technology, it is necessary to select and utilize the one that suits your company. Developing human resources is important.
Employees will acquire the skills to utilize the latest digital technologies, AI tools, big data, etc. At the same time, they will acquire the literacy that will lead them to solve their own issues and satisfy customer needs by making full use of them. I have to let it go.
What you can get with DX
DX is a long-term effort and not easy, but what you can get from DX is great. Here are three advantages:
- Improve operational efficiency and productivity
- Strengthen BCP measures
- Ability to respond to changes in the business environment
Improve operational efficiency and productivity
In the process of realizing DX, by using the latest digital tools to digitize the work that has been done by humans, human error can be eliminated and the number of personnel can be reduced, which is expected to improve work efficiency and productivity. increase.
In addition, by accumulating and analyzing as quantitative data what had not been converted into data or what was only intuitively understood, new customer needs and things that could not be visualized until now can be identified. It can also lead to the discovery of wasteful operations and improve productivity.
Strengthen BCP measures
A BCP (Business Continuity Plan) is a plan made in advance to minimize damage and restore business as quickly as possible in the event of an emergency such as a natural disaster or terrorism.
In today’s business environment, where unpredictable crises can occur at any time, such as the spread of the new coronavirus, we must anticipate as many contingencies as possible and continue our business at any time. It is important for businesses to be prepared.
DX, which uses digital technology and data to transform a company, has something in common with BCP in that it is used to maintain competitiveness in an unpredictable business environment. Therefore, promoting DX will also lead to strengthening BCP measures.
Ability to respond to changes in the business environment
In promoting DX, we will renovate old IT systems that were only used within the company or department, and introduce new systems that utilize the latest IT technology, AI tools, and data. You can create an environment that allows you to carry out your work from anywhere.
This will allow us to respond flexibly when the business environment changes and a sudden response becomes necessary. For example, even when it became urgent to prepare a remote work environment due to the spread of the new coronavirus, companies that promoted DX from an early stage or introduced the latest digital technology responded quickly, causing delays in operations. I was able to do it without
Examples of companies working on DX with clear goals
From here, let’s take a look at an example of a company that has a clear goal and is working on DX as a whole company.
Examples of Ajinomoto’s DX initiatives
As a food company, Ajinomoto originally upheld the philosophy of “solving social issues and co-creating value with society” called ASV (Ajinomoto Group Shared Value). We aim to be a leader in change. Therefore, we are promoting to achieve our goals through the use of digital technology and a drastic review of operations and organizations through DX.
In promoting DX, Ajinomoto has set four stages: “Company-wide operational transformation,” “Ecosystem transformation,” “Business model transformation,” and “Social transformation.”
As a result, it becomes easier to provide the necessary information and support for promoting DX, and we can see healthy competition among organizations aiming for the best and collaborative creation aiming to create new value. It has become possible.
Through DX, Ajinomoto has transformed its operations, ecosystem, and business model, and through the creation of innovation and the strengthening of its technological assets, has improved its brand value and strengthened its human capital. While transforming the company through DX, it can be said that we are approaching the goal of becoming a company that solves food and health issues.
Examples of trial DX initiatives
In the discount supermarket trial, we are promoting DX with the vision of “using technology to create a new era of shopping experience and innovate the distribution system.”
In advancing DX, we have set five levels as step-by-step goals. From Level 1, we will gradually reduce the proportion of human involvement and increase the proportion of store management by AI, and the final goal is Level 5, with the goal of 100% AI in store management.
In promoting DX, we have introduced IoT devices such as AI cameras and smart shopping carts, and by collecting, accumulating, analyzing, and sharing data, we are optimizing sales floors and providing customers with new shopping experiences. For example, by introducing an AI camera, we are optimizing the planogram, grasping the replenishment status of products, and monitoring shoplifting. increase. In addition, by introducing a smart shopping cart, customers can scan products at the same time as they shop and make subsequent payments easier, and the attached tablet can display recommendations and coupons according to the customer’s purchase information. We make it possible.
It is important to proceed with DX with a goal in mind
Like Ajinomoto’s goal of “solving food and health issues” and Trial’s vision of “creating a shopping experience for a new era and innovating the distribution system,” the promotion of DX requires a long-term perspective that requires the whole of society. It is important to set goals and proceed from a big perspective that will have an impact on people. Furthermore, you can progress well by setting and achieving goals step by step toward realization.
In order to realize DX, digital technology and IoT devices will be used, and at the same time, data will be collected, accumulated, and analyzed to promote data-driven management. enable transformation of business models and corporate cultures. In order to promote DX in-house, we need human resources who have the latest digital technology and knowledge of data utilization, and who can flexibly utilize them to achieve the company’s goals.