Promoting digital transformation (DX) will not be successful just by using superior technology and solutions. In reality, understanding the business processes of the existing organization, integrating the processes of multiple organizations, and how to involve the stakeholders of each organization are high hurdles and are the causes of failure. Here, we will explain the current state of DX initiatives in Japan and advanced examples supported by Macnica networks.
Corporate DX-related promotion departments doubled
According to the definition of the Ministry of Economy, Trade and Industry, DX is "the use of data and digital technology to transform 'business itself,' 'organization,' 'processes,' and 'corporate culture and climate' in order to gain a competitive advantage."
"Gaining a competitive advantage" ultimately means fundamentally transforming business models and creating new business models and value through data and digital technology. However, because the scope is quite broad, if we narrow it down to a narrower meaning, it is important to set specific goals within the company, such as increasing sales, improving operational efficiency, and reducing costs, and to use data and digital technology to transform the company.
In addition, DX cannot be achieved by a single organization, but rather requires collaboration among multiple organizations, making cross-organizational collaboration important. At Macnica, we have been supporting many DX projects since last year, and we have seen an increase in cases where multiple organizations are involved in promoting DX.
"Organizational walls" that hinder the improvement of DX promotion
Regarding the environment surrounding DX in Japan, IPA has published the "DX promotion index self-diagnosis result analysis report". This is a self-reported response to the degree of promotion for more than 300 companies that are promoting DX. According to this, the result is that the goals have not been reached in terms of management, IT, and overall.
More than 90% of companies believe that their own DX promotion is insufficient
The IPA index classifies DX promotion levels into six levels from 0 to 6. Level 0 is a complete non-starter, and no concrete initiatives have been taken yet. Levels 1 and 2 are implemented in some or limited areas, and the difference is whether it is sporadic or strategic.
At level 3 or above, progress is being made cross-functionally based on company-wide strategies, rather than just a portion of it, or across multiple departments, and progress is being made based on the company-wide core strategy. Levels 4 and 5 are indicators that the initiative is sustained and global.
According to the results of this survey, only 8.6% of the total respondents were level 3 or higher. Conversely, more than 90% of them remain at the level 0 to level 2 stage.
Many companies are working on DX promotion to avoid the ``2025 cliff'' proposed by the Ministry of Economy, Trade and Industry in 2018, but in order to do so, DX promotion of level 3 or higher is required. In order to reach level 3 or higher, it is necessary to proceed with a comprehensive strategy that involves the entire company, so it seems that there are still barriers in this area.
So, what kind of issues should you solve in order to raise your company's DX promotion level to that index?
Many of Macnica networks' customers have issues with DX across their organizations. For example, the people in charge of DX promotion had a strong desire to significantly transform their company's business model with digitalization and digital data analysis as the key, but management lacked understanding of such measures. There are cases where it is extremely difficult to reach a consensus within the company. This is an issue where DX is being implemented sporadically in some areas, or in other words, DX is being promoted on a department-by-department basis without a clear company-wide strategy. Even if a DX organization is established, collaboration will be difficult if there is a difference in awareness from the business division side.
Successful points of DX promotion seen in advanced cases
1. Overwhelming Sense of Crisis for Existing Business Models
At a certain marketing company, the domestic market was completely saturated, there were many competitors, and it was quite difficult to differentiate. Even if we continued with the current business, it was difficult to maintain sales and profits, and there was an urgent need to explore and establish a new business model. The key to the success of the company's DX is that the management had a strong sense of crisis. In launching the DX organization, the members of the DX organization were carefully considered, and members with high awareness were assigned. In addition, since the management enthusiastically explained to the on-site members how important it was to promote DX, the company's management sense of crisis and issues were permeated to the on-site members. It can be said that the key to the success of the company's DX promotion was that it was able to promote the project with a high degree of enthusiasm.
2. Clarifying the role of the DX promotion organization and the hypothetical scenario for business impact
There are advanced cases in the manufacturing industry that have achieved various business effects in a short period of time as a result of promoting DX by involving other departments.
A manufacturing company already had a DX promotion organization, and data-driven discussions were progressing within the company. Based on the company-wide commitment, the members of the DX promotion organization went around the company's business departments and promoted their efforts. The promotion also increased the recognition of the DX promotion organization within the company. The company places particular emphasis on speed and results, and added AI predictions to its data analysis. As a result, we realized cost reduction of hundreds of millions of yen per year in just three months. Another key to success is clearly communicating the mission and achievement criteria to the person in charge.
As you can see from this, it is important to first visualize what we want to become and what our goals are, set a clear deadline, and share it with everyone including the DX promotion department, business department, IT department, and management. is. Then, accurately understand the current situation and think about what is missing. Defining the gap between As-Is and To-Be as a problem, finding specific issues, determining priorities, and solving them in order, including the time axis, are also important points in promoting DX. Probably.
There are multiple steps in promoting DX, from issue setting to project recovery. At Macnica networks, we support each process from problem setting to project initiation, and provide strong support for companies to promote DX."
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