DX Leads to Business Transformation— Founding Members of the DX Strategy Division Share Their Views on the Essence of DX

Advances in Digital Technology Have Accelerated the Shift in Business Model from Product-out to Market-in

How is DX changing the world around us?

Morishima: There is an ongoing shift from a “product-out” approach to business, which prioritizes the strategies and strengths of the manufacturer, to a “market-in” approach for developing businesses to meet the needs of the market. Advances in DX technology have accelerated this change, drawing the attention of more companies.

Kawaguchi: Values have become diversified, and established products and services are falling short of meeting these emerging needs. I believe this is due to advances in digital technology for providing goods and services optimized for each individual. And it also makes it easier to identify needs, thereby lowering the barriers to new entrants from other industries and intensifying competition.

Is a market-in approach the mainstream now because an accurate perception of the needs is indispensable?

Morishima: Industries are beginning to transition to a market-in approach, although not all of them have adopted this course of action. The product-out approach is still the mainstream in the manufacturing sector, which accounts for a major share of Japanese industry.

Kawaguchi: We often hear about companies that are proud of their manufacturing yet feel challenged by financing and the development of sales channels.

Morishima: We believe that is precisely the point where DX has proven useful, and we hope Tokyo Century can identify potential challenges for customers and find optimal solutions with them.

Business Creation and Human Resource Development as the Twin Wheels Driving DX

How would you describe the DX Strategy Division?

Morishima: Our division handles everything required for promoting DX across the Company. We engage in discussions every day on how to create new business models and deliver better services to customers.

Kawaguchi: We are also focused on human resource development through educational programs with an emphasis on DX and a new system to evaluate their skills and knowledge. We need the twin wheels of business creation and human resource development to maintain these efforts.

What are some of the DX projects that have been generated?

Morishima: We have just launched a collaborative project with Shimizu Corporation to participate in its Smart Building Project, which features the effective application of digital technologies. Tokyo Century will provide its integrated subscription platforms to support corporate partners involved with the project toward creating new businesses through digital transformation.

Kawaguchi: Nippon Rent-A-Car Service, a member of Tokyo Century Group, is also encouraging the use of digital technologies. It has sought to optimize vehicle allocation and improve services based on data analysis to facilitate the booking process on its website and app, for renting as well as returning cars.

Instilling the Term “DX” across Tokyo Century Group through In-house Communication Tools

What changes have you seen since the launch of the DX Strategy Division?

Morishima: More employees are becoming involved in DX-related projects, and “DX” itself is more often referred to, due in part to the Digital Governance Code announced by the Ministry of Economy, Trade and Industry as corporate guidelines.

Kawaguchi: DX, however, has not spread evenly throughout the Company, a challenge that the DX Strategy Division needs to address.

What action are you taking to solve this issue?

Morishima: One example of our efforts is the dissemination of news about DX through in-house communication tools. We include many overseas cases that should help instill a broader understanding of global trends. We hope everyone will review the news to deepen their understanding and apply these concepts in their everyday work.

Kawaguchi: News media features a growing number of DX-related topics every day, so we are considering improving the design in order to enable users to select stories by theme and explore topics of personal interest. The cycles of trial and error in optimizing our efforts are themselves key aspects of promoting DX, which is characterized by rapid change.

Delivering Solutions to Customer Problems Is the Key to Driving DX and the Essence of Our Business

How should each of us individually address DX?

Morishima: While DX stands for digital transformation, it makes more sense to think of it in terms of business transformation.
Our goal is to transform our business model dynamically, with digital technology as merely a tool. I believe that understanding the purpose and means will become the foundation for promoting DX.

Kawaguchi: We should resist overthinking the issue and keep in mind the importance of listening to customer problems as the starting point of any business. This will ultimately drive DX.
Even operations that had defied digitization in the past and were considered unrelated to DX could also be subject to transformation, so I’d encourage people to start by looking again at the operations around them.

DX promotion is also expected to provide ample opportunities for individuals, such as by raising operational efficiency and improving skills. For the benefit of younger employees who are leading the company into the future, we hope to work with everyone and continue meeting challenges by perceiving social trends years in advance and conveying the means for addressing change in simple language.

Morishima: The DX Strategy Division also serves as a liaison for facilitating collaboration among divisions. With flexible thinking and the latest information, we seek to develop our track record in DX promotion to generate businesses and services that meet even greater needs of our collaboration partners and customers.

*The contents of the article and the position titles are as of the date posted.

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