DX Strategy Leader Looks at a Future We Create through DX as the COVID-19 Pandemic Accelerates the Pace of Change

Sea Change in Asia Brought about by the Digital Wave Sweeping across the World

What have you observed about DX in Japan and overseas from your years of experience in international business?

DX is gathering momentum around the world. I have seen this myself on multiple occasions.

Asia in particular is undergoing dramatic change. The advances in China and Southeast Asia are astounding. Greater convenience is no longer happening step by step; it’s being achieved by leaps and bounds, as diverse industrial sectors rapidly adopt new technologies.

Powerful smartphone apps have emerged offering functions beyond messaging to impact key aspects of daily life such as payments for shopping and reservations. In some countries, there are far more people who own accounts for QR code mobile payment than those who own traditional bank accounts.

What is the status of DX in Japan?

Japan has a well-established infrastructure which, for example, has allowed most people to have bank accounts and easily make payments, so change in that area was not expected to be as disruptive as in other countries. Even the broad acceptance of QR code payment didn’t take very long in Japan, and smartphones have become an even more essential component of our infrastructure. The advance of digital technology does not recognize national borders, and conventional approaches to business in virtually every sector have already been challenged by digital services originating outside Japan. These developments have gained even greater momentum from the COVID-19 pandemic.

So you mean that disruption has already begun?

It has been said that the financial sector, in which Tokyo Century does business, is especially prone to disruption caused by new entrants from other business sectors.

In anticipation of the need for remote working options, Tokyo Century had already begun deploying IT, promoting digitization, and providing online services, such as online conference systems, digitizing documents, and introducing robotic process automation (RPA). In view of what lies ahead in a post-pandemic world, I feel our business model itself needs to evolve further. To survive through these turbulent times and move forward, we must stand present to the real crisis and be willing to take bold action.

Connecting Users and Partners by Providing Financial Services Linked to Assets

What are some of the specific changes underway?

The business community has been seeking to connect with customers through sales activities as an ongoing strategy. This is mainly intended to retain customers and transform the relationship into one that can be continuously expanded and develop a deeper understanding of customer needs to enhance services. This approach has spread beyond B-to-C companies to involve B-to-B companies as well.

The shift from selling products to selling services is another major strategy. Sharing services extends their reach, and the consumer mindset is also changing from ownership to use as needed.

The evolution of digital technologies, accompanied by advances in IoT and the proliferation of smartphones, has enabled instant analysis of individual needs and usage trends. It is becoming possible to analyze data through AI for improving and expanding services. Greater convenience leads to a closer connection with customers, so I think these strategies will come into sharper focus in the coming years.

How can Tokyo Century contribute in the midst of these changes?

Tokyo Century is capable of providing financial functions linked to an underlying asset, which is a significantly distinctive characteristic.

In a sense, our founding business of leasing, in which we own the equipment and customers pay monthly usage fees, is a precursor of the current subscription business . We believe that our leasing and subscription functions can contribute to meeting the business community’s desire to forge connections with customers through sales activities, and we are developing suitable proposals. By offering solutions based on the effective deployment of digital technologies, we can create new business models that benefit both end users and partner companies while generating services with greater convenience and efficiency.

From the perspective of the SDGs, leasing and subscription can reduce environmental impact through the reuse and recycling of equipment. Given the growing momentum for promoting SDGs and sustainability, manufacturers are seeking to manage their products through final disposal and recycling. There is an inherent potential for leasing and subscription functions to contribute from this perspective as well.

Creating New Value through a Fundamental Review of Our Operation and Structure

What is the ideal organization for promoting DX?

Information sharing and collaboration are key for the entire Tokyo Century Group, since promoting DX requires all of us to work together. To this end, many members of the DX Strategy Division hold concurrent positions in other divisions to facilitate collaboration.

The division’s mission is to enable Tokyo Century to acquire the ability to compete not only in Japan but across the world by achieving business growth based on new technology through a fundamental review of our way of doing business and organizational structure.

We intend to play our role in various ways in order to deliver completely new business models and services that are even more convenient and useful. We will also cultivate personnel responsible for promoting DX and establishing a support system to raise momentum for DX.

DX is Dynamic and Requires a Willingness to Acquire Rich Practical Experience

What new businesses do you expect may arise from DX?

From now on, digital technology will impact every single person and industry.

Given the continuing labor shortage, the use of robots and services based on AI and big data will expand in the coming years. Delivery robots and robotic waiters at restaurants may become commonplace. In the retail sector, services incorporating the use of smartphones, such as convenience stores with no onsite employees, may also grow.

Considering the need to address environmental issues such as global warming, the use of electric vehicles is also expected to spread further. Electric vehicles should give rise to a variety of peripheral businesses including charging facilities, and additional needs will emerge over time.

The sharing economy also seems to be ready to expand at a robust pace.

Many of these businesses require assets such as equipment and machinery, presenting business opportunities for Tokyo Century.

What is required for each of us to promote DX and drive innovation in business?

DX is about harnessing digital technologies to transform business.

While electronic contracts, telework, and online conferences represent vital steps forward, we should not view them as goals in themselves. We must pay attention to global developments with the intention of applying the latest advances to our own projects.

There are no final answers to questions surrounding DX. Instead of seeking answers in books or other sources of information, the key is to gain practical knowledge while sharing the learnings from those experiences and quickly developing new solutions through a combination of diverse skills and insight.

The DX Strategy Division will do its best to contribute meaningfully to all of those engaged in this effort as well as to society as a whole.

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

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