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What is the DX certification system? Explanation of application points and merits indicated by the Ministry of Economy, Trade and Industry

There may be people who think like this. If you use the DX certification system, you will be certified as a business that makes excellent efforts to promote DX, and your company’s brand power will improve .

This time, we will explain the benefits from the overview of the DX certification system, and explain the specific application targets and application methods.

Table of Contents 

  • What is the DX certification system?
    • Background of the DX certification system
    • Relationship between the Digital Governance Code and the DX Certification System
  • Three benefits of receiving the DX certification system
    • ① Easier to make business plans for promoting DX
    • (2) Improve brand power
    • (3) Eligible to apply for DX brand
  • About application for DX certification system
    • ① Check the “Application Guidance”
    • ②Download and prepare required documents
    • ③ Apply through the online application system and submit necessary documents
  • Certification criteria of the DX certification system
    • What is the DX-Ready state?
  • 7 steps to apply for the DX certification system
    • Step 1: Create a management plan (announced at the board of directors)
    • Step 2: Create a DX strategy (announced at the board of directors)
    • Step 3 Formulate a DX strategy promotion management system
    • Step 4 Information dissemination from management
    • Step ⑤ Analysis by DX promotion index
    • Step ⑥ Security measures
    • Step 7 Apply for DX certification from the Ministry of Economy, Trade and Industry
  • Application points for the DX certification system indicated by the Ministry of Economy, Trade and Industry
    • Can be resubmitted
    • Ensure sufficient time for the application period
    • Use of DX Promotion Portal
    • Participate in application guidance
  • DX certification system that can also be used for DX investment promotion tax system
    • Tax deductions and special depreciation are allowed
  • Use the DX certification system to set yourself apart from competitors

What is the DX certification system?

The DX certification system is a certification system based on the “Law for Partial Revision of the Act on Promotion of Information Processing” which came into force on May 15, 2020.

Based on the government’s “How to use strategic systems in corporate management”, it will be a system to certify based on the application of a business that incorporates DX and conducts excellent corporate strategy and management .

Background of the DX certification system

In 2019, the Ministry of Economy, Trade and Industry created a “DX promotion index” that allows companies to diagnose their DX initiatives. From the 2019 and 2020 corporate diagnosis of the DX promotion index, the result was that about 90% of Japanese companies had not started DX or were still developing .

In order to support the promotion of DX from this situation, the “DX Certification System” was established.

Relationship between the Digital Governance Code and the DX Certification System

A term related to the DX certification system is the Digital Governance Code.

What is the Digital Governance Code?

The Digital Governance Code is a response required of managers, such as formulating and announcing a management vision in light of social changes brought about by digital technology, in order to encourage voluntary corporate initiatives related to DX.

The diagram below shows the overall structure of the Digital Governance Code. The selection of companies in the DX certification system corresponds to the “(1) Basic matters” part of the Digital Governance Code.

In this way, the DX certification system corresponds to the basics of the Digital Governance Code.

Three benefits of receiving the DX certification system

The DX certification system has three advantages.

  1. Makes it easier to create a business plan for promoting DX
  2. Improving brand power
  3. Eligible to apply for DX brand

① Easier to make business plans for promoting DX

In order to be DX certified in the DX certification system, it is necessary to submit a company’s efforts related to DX, so it is necessary to formulate a management plan and DX strategy .

For companies that want to promote DX, clearing DX certification means that the corporate management policy regarding DX has been recognized by the government, and clear management indicators and business plans can be set up.(2) Improve brand power

DX certification is a system established by the Ministry of Economy, Trade and Industry, so it improves the brand power of the company. Therefore, if you clear it, you can appeal to customers to promote DX. Not only brand power, but also trust will improve .

(3) Eligible to apply for DX brand

In order to be selected as a “DX Brand”, “DX Grand Prix”, and “DX Featured Company”, it is necessary to obtain DX certification.

If selected as one of these, it means that the company is working on DX and that effort is recognized by the Ministry of Economy, Trade and Industry. It will be proof that you are recognized as a company that conducts next-generation business, and will be more supported by customers .

  • DX Brand : A brand given to companies that radically transform their business models and strengthen new growth and competitiveness based on the premise of utilizing digital technology.
  • DX Grand Prix : Two companies that have made particularly excellent efforts among the companies selected as DX brands will be selected. By the way, in 2021, Hitachi, Ltd. and SRE Holdings Co., Ltd. were selected.
  • DX noteworthy companies : Among the companies that have not been selected as “DX stocks,” refer to companies that are implementing notable initiatives in terms of contributing to corporate value.

About application for DX certification system

The application flow for the DX certification system is divided into three parts.

  1. Check “Application Guidance”
  2. Download and prepare required documents
  3. Apply through the online application system and submit required documents

① Check the “Application Guidance”

First of all, when applying for the DX certification system , let’s check the  DX certification system application requirements (application guidance)  that summarizes the necessary preparations and procedures .

②Download and prepare required documents

Download and complete the certification application form and application check sheet. How to fill in the contents and how to prepare in advance are described in the “Application Guidance”.

For question (5) of the certification application form, additional submission of supplementary materials is required unless the results are submitted using the “DX promotion index self-diagnosis result input site”.

③ Apply through the online application system and submit necessary documents

Apply and submit the required documents from the web application system “DX Promotion Portal”. This web application system requires a Gbiz ID.

Are SMEs subject to the DX certification system?

All businesses, including corporations, including public interest corporations, and sole proprietors, are eligible. Therefore, even small and medium-sized enterprises can apply for the DX certification system.

How long does it take to apply?

The period from application to certification depends on the company, but let’s recognize the schedule based on the standard processing period of 60 business days for the examination period.

Applications can be submitted at any time throughout the year.

What is the application fee?

There is no fee required to apply, but there will be costs to be borne before the application (costs for printing documents, business plans and strategies).

Certification criteria of the DX certification system

The Ministry of Economy, Trade and Industry’s “DX Certification System Application Guidelines (Application Guidance)” classifies DX certification into four levels.

DX certification certifies operators in the “DX-Ready” state among the four stages . Businesses that exceed the level of DX certified businesses will be selected as “DX-Excellent companies” and “DX-Emerging companies”.

What is the DX-Ready state?

The DX-Ready state is a state in which the basic items of the Digital Governance Code, the “Pillar Ideas” and the “Certification Criteria”, are put into practice. It refers to the second state from the bottom in the figure below.

Specifically, the company’s management will use digital technology to formulate how to transform the business model and clarify the organizational image and human resources that are required. From there, we are ready to show specific measures to prepare for the promotion of DX and manage the strategy.

7 steps to apply for the DX certification system

Specifically, there are the following seven steps to apply for the DX certification system.

  1. Formulate a management plan (announced at the Board of Directors)
  2. Create a DX strategy (announced at the Board of Directors)
  3. Formulate a DX strategy promotion management system
  4. Information dissemination from management
  5. Analysis by DX promotion index
  6. Security measures
  7. Apply for DX certification from the Ministry of Economy, Trade and Industry

Step 1: Create a management plan (announced at the board of directors)

Through the promotion of DX, we will formulate a management plan for how the company should change. In the case of a listed company, it will be announced at the board of directors meeting.

Step 2: Create a DX strategy (announced at the board of directors)

From the management strategy, we will plan the part that formulates the DX strategy in particular. In this case, the listed company also announces it at the board of directors meeting.

Step 3 Formulate a DX strategy promotion management system

Once the management strategy and DX strategy are decided, we will create a system to manage the promotion of DX. We have to grasp the status of DX promotion and assume the people who will manage and promote it.

Step 4 Information dissemination from management

In promoting DX, management will announce the management strategy and DX promotion strategy to the entire company and people involved. Dip Co., Ltd. disseminates information about DX.

Step ⑤ Analysis by DX promotion index

The DX promotion index is a tool released by the Ministry of Economy, Trade and Industry that allows companies to diagnose companies in order to promote DX.

It consists of 9 key questions and subquestions. A maturity level is defined according to the achievement level of each item, and by answering these questions, you can recognize the maturity level for promoting DX.

The purpose of the DX promotion index is to enable management and internal stakeholders to understand the company’s issues related to DX and take the necessary measures to solve them.

Step ⑥ Security measures

In promoting DX, it is essential to utilize digital tools.

In doing so, security measures must be taken to handle digital data. Formulate a security policy and consider countermeasures.

Step 7 Apply for DX certification from the Ministry of Economy, Trade and Industry

Once you have completed these steps, apply for DX certification. As explained earlier, submit the certification application form, application check sheet, and additional documents through the web application system “ DX Promotion Portal ”.

Application points for the DX certification system indicated by the Ministry of Economy, Trade and Industry

When applying for the DX certification system, the Ministry of Economy, Trade and Industry shows several points.

Can be resubmitted

Documents required for DX certification can be resubmitted. Even if the documents are incomplete and the loan is repaid, there is a chance to submit it again.

Ensure sufficient time for the application period

The application period is at least 60 days (business days), but please allow enough time to prepare the documents.

Use of DX Promotion Portal

When submitting documents on the DX Promotion Portal, you must obtain a Gbiz ID. Get it in advance so that you can apply smoothly.

Participate in application guidance

If you are worried about applying for the DX certification system, let’s participate in the application guidance. Organized by the Ministry of Economy, Trade and Industry.

DX certification system that can also be used for DX investment promotion tax system

The DX certification system can also be used for the DX investment promotion tax system. The DX investment promotion tax system is a preferential tax treatment for companies that are working on corporate transformation (DX promotion) that utilizes digital technology on a corporate scale .

Tax deductions and special depreciation are allowed

The DX investment promotion tax system is a tax system established by the 2021 tax reform for the purpose of promoting investment in digital transformation of companies. Targets are assets that have been approved for business adaptation plans by March 31, 2023 and have been used for business purposes.

First of all, it is necessary to receive DX certification, which is subject to the DX investment promotion tax system. The Information-technology Promotion Agency, Japan (IPA), an independent administrative agency, handles the certification examination. After the IPA examination, the Ministry of Economy, Trade and Industry will certify it and it will be subject to the DX investment promotion tax system.

If you clear the DX certification system and implement DX promotion based on the business adaptation plan specified by the minister, you can choose either a tax credit for the investment amount or a special depreciation of 30%.

Use the DX certification system to set yourself apart from competitors

This time, I introduced the DX certification system. If you use the DX certification system, you will become a company that promotes DX and will be recognized as such by your customers.

Utilizing digital technology is essential to building a competitive advantage. Set yourself apart from your competitors with the DX certification system.

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