Are companies making progress in DX?

※ According to the Information-technology Promotion Agency, Japan’s DX White Paper (2021), about 54% of companies are working on DX (based on a company-wide strategy). Compared with 79% in the U.S., the number of companies promoting DX in Japan is still small.

By industry, both Japan and the U.S. are seeing more DX in the information and communications industry, the financial industry, and the insurance industry (although compared to 91.0% in the U.S., Japan’s ICT industry lags far behind at 57.5%). On the other hand, Japan’s distribution, retail, manufacturing, and service industries have low ratios and have not made much progress in DX.

Source: DX White Paper 2021, Information-technology Promotion Agency, Japan
(Copyright DX White Paper 2021(2021) IPA)

※ Survey target: 534 companies in 26 industries (manufacturing/non-manufacturing) within the scope of the METI Information Processing Survey. Survey period: July – August 2021

What will happen if we don’t work on DX?

The 2021 edition of the Ministry of Internal Affairs and Communications’ White Paper on Information and Communications measures the relationship between a company’s level of DX promotion and its sales. (The degree of DX promotion is defined by classifying the level of progress from 1 to 3 based on whether or not the company is working on the development of an internal organization and vision for DX promotion, as well as external collaboration.)

The chart below shows the increase/decrease in sales (in FY2020) by the level of DX progress, with companies with higher levels of DX progress reportedly reporting higher sales compared to the previous year.

Source: Ministry of Internal Affairs and Communications, White Paper on Information and Communications 2021

The report also simulates the impact on sales if DX were to progress to the same degree in Japan as in the U.S. As a result, it is estimated that sales in both manufacturing and non-manufacturing industries would increase by approximately 5%.

In other words, it has been shown that if DX is not addressed, sales growth will be sluggish and if it is addressed, sales growth is likely to increase.

What is needed to promote DX?

Digital transformation (DX) is the use of digital technology to adapt organizations and businesses to changes in the external environment (technological innovation). This creates new value (in terms of customer experience, systems, etc.), enhances the competitiveness of the company, and eventually transforms social systems and systems culture.

However, it is difficult to suddenly change existing systems or create new systems in society. For this reason, companies that have yet to promote DX should first work on digitization and digitalization.

Digitization is the conversion of analog information/business processes into digital format by introducing in-house digital tools, as represented by buzzwords such as digitization and paperless.

Digitalization, on the other hand, is an effort to digitize not only the company’s internal efforts but also the entire business process, including external parties such as clients and partners, and includes the method of providing products and services and the transformation of business models.

Indeed, digitization/digitalization and DX are completely different. Digitization/digitalization is the digitization of existing analog operations, while DX focuses on the creation of new value that is not based on existing analog operations. The scope of influence of the former is limited to the company (in the case of a company) and its customer partners, while DX extends to society as a whole.

However, it is difficult for companies whose existing operations are in an analog state to move forward with DX. In other words, it is not realistic for companies that are already in business to skip digitization and engage in DX.

Classification of Digitization

※ Digital technologies: 3rd platform (cloud, mobility, big data/analytics, social technologies)

Start with Digitization

Efforts to renew product/service delivery methods and business models through digitization and digitalization also face high implementation hurdles.

Therefore, we recommend starting with digitization. The first step toward DX is to digitize the analog information and business processes that remain in the company.

Some of the digitization being done at Questetra is as follows.

– Digitalization of business processes

  • Attendance management
  • Internal communication, information sharing/recording
  • Application/Approval
  • Customer Management
  • Billing Management
  • SNS Posting Management
  • Blog Posting Management
  • Landing Page Creation Management

– Business Automation

  • Inquiry reception/response
  • Free Trial Reception/Response
  • Scheduled Email Campaign (nurturing)
  • Aggregation
  • Receiving/responding to applications for useful information

All of this is done with the cloud workflow Questetra BPM Suite. It can also be linked to cloud services such as Google Workspace and Box, which are used for other business operations, so appointments can be automatically added to Google Calendar and files can be automatically saved to Box.

Questetra BPM Suite can create systems (workflow applications) related to the above business processes with no code. Therefore, even non-engineers can easily start digitization.

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