INNOVATION

DX Task Force On the Move —Top Management Explains How Aggressive DX Will Bring about Change

Nov 22, 2023

Transform Ourselves to Bring About Change. This is part of Tokyo Century’s vision of what we need to do to achieve sustainable growth in the rapidly changing VUCA era*1, with digital transformation (DX) as one of the four pillars of TC Transformation (TCX) that is essential for realizing that vision. Koichi Baba, President & CEO and Representative Director, launched the DX Task Force so that Tokyo Century could continue to contribute to customers, partners, the market, and the future, and here he shares his thoughts on the initiative.

*1 VUCA: volatility, uncertainty, complexity, and ambiguity. The VUCA era refers to a period of rapid change, uncertainty, and a future that is difficult to predict.

DX Is a Means for Bringing about Change. How Does Top Management Perceive Our Current Situation?

—The Medium-Term Management Plan 2027, released in May 2023, identifies TC Transformation (TCX) as a basic policy. What, then, is the role of DX?

Baba: In our new medium-term management plan, we set the theme of “transforming ourselves to bring about change.” We expressed our firm determination to transform ourselves in the “X (Transformation)” and set TCX, a collective name for four “Xs,” as our basic policy. Portfolio Transformation (PX) and Green Transformation (GX) represent transformations in business development and can be described as objectives. On the other hand, human resources and organizational transformation (HRX) and DX can be said to be the foundation and measures for bringing about change in all aspects of corporate activities. DX in particular is positioned as an indispensable foundation for not just responding to change but also leading the way in bringing about change and realizing PX and GX.

TC Transformation
           

—Since 2015, Tokyo Century has been selected as a DX brand for nine consecutive years and has been promoting DX initiatives right up to the present. But is it your view that the current situation is by no means satisfactory?

Baba: Yes. We’re still halfway through. If I compare it to mountain climbing, we would be still at the fifth station. So our immediate goal is to have all officers and employees strengthen their climbing ability to reach the seventh station by the end of fiscal 2024—in other words, to complete digitization*2. We believe that only when this foundation has been established will we be able to effectively utilize data for business and management decisions as a sustainable structure, improve efficiency or implement DX across all business processes by introducing AI, genuinely enhance the value provided to customers through digitalization*3, and ultimately achieve the targets of the medium-term management plan. Getting through the VUCA era, during which changes are difficult to predict, will depend on setting goals and an aggressive pace. Therefore, by casting back from the goal and envisioning the obstacles that might stand in the way, we will create an environment in which abundant human resources can thrive by drawing a concrete roadmap of “what” and “by when.”

*2 Partial digitalization in which digital technology is introduced to improve efficiency, reduce costs of specific operations, and create an environment in which analog information can be digitized to store data.
*3 Digitization of entire business processes to create unprecedented convenience by digitizing what used to be processed in analog, or to improve efficiency by introducing digital technology to business operations.

We’re still halfway through. If I compare it to mountain climbing, we would be still at the fifth station.
          

Promoting the DX Task Force Company-wide under Four Key Themes

—Could you tell us about the DX Task Force that you lead?

Baba: The DX Task Force is an initiative for promoting DX company-wide across operating segments. We have set four key themes, created working groups for each, and are deepening discussions from the field perspective while sharing images of objectives, measures, and goals. Looking back at Tokyo Century’s growth curve, each operating segment has undeniably become independent. A greater sense of unity, however, is essential for facing the social issues that already exist or will emerge in the future. We will work together to create synergies across the board and discover new possibilities without compromising the strengths of each of the five operating segments. I personally head the DX Task Force to express this intention.

Koichi Baba
          

—What are the four key themes?

Baba: The four key themes are “value provided to customers,” “field work improvement,” “system replacement,” and “human resource development through DX.” Our DX strategy is grounded in the basic policy of aggressive DX, which establishes the direction of improving the value provided to customers by increasing external value and contributing to society and the environment, and increasing the productivity of internal business processes by enhancing the organizational structure to develop human resources through DX and boost productivity. The four key themes were established to realize this aggressive DX goal.

Four Key Themes of the DX Task Force
Four Key Themes of the DX Task Force

—What measures are being considered and implemented for each theme?

Baba: For example, in terms of the value provided to customers, we have created a working group that is further subdivided for each operating segment and setting goals. Regarding field work improvement, we are promoting digitization, such as by improving digital literacy and going paperless to provide optimal solutions to our customers and partner companies. TC-ChatAI, an in-house AI chat service released in October, is also one of the topics. As for system replacement, we are moving ahead, led primarily by members of the IT Promotion Division, to address issues referred to as the 2025 Digital Cliff*4, which will hinder the development of digital tools and corporate DX. We are already on track to complete this work. Lastly, with regard to human resource development through DX, the Personnel Division and the DX Strategy Division have launched a training program for all employees.

Note: Details of human resource development through DX will be published in the second article of this series.

*4 The 2025 Digital Cliff refers to problems involving IT systems and was coined in a report by the Ministry of Economy, Trade and Industry. Factors hindering the promotion of DX by companies are expected to erupt around 2025 due to aging, bloated, and complex existing systems, human resource shortages, soaring maintenance and management costs, rapid changes in the IT market, and other factors.

Maximizing the Value Provided to Customers through Aggressive DX

—What is required to realize aggressive DX?

Baba: It is important to increase the value provided to customers, which is one of our key themes. Where is the value we can offer to our customers? In terms of our function as a leasing company, I believe we can continue to play a role in supporting customer business strategies by providing goods. On the other hand, people’s lifestyles are changing at a dizzying pace, and their needs are diversifying into selling goods, services, and moments. Our value lies in providing Finance x Services x Business Enterprise. However, by capturing the waves of change and conceptualizing businesses while fully leveraging digital technology, we and our partner companies hope to maximize the value we provide, so that customers appreciate them. Our ideal goal is to be chosen by partner companies as this kind of entity. And we are strongly determined to achieve sustainable growth as an organization that contributes to the market, society, and the future.

Maximizing the Value Provided to Customers through Aggressive DX
          

DX Strategy and Human Resource Strategy Are Two Sides of the Same Coin and Two Wheels

—Since the growth of each and every individual at Tokyo Century is indispensable for realizing aggressive DX, I’d like to ask one final question. How do you see the future of human resource development in the DX strategy?

Baba: For example, it is of course important for a company to consider the level of performance it can achieve through a subscription system. If that was our only concern, however, we wouldn’t be able to go any farther. The true goal of human resource development in the DX strategy is to develop business conceptual skills by thinking about the new things that can be done with subscriptions. Passion and sincerity are essential, in addition to DX, for detecting in advance the issues faced by customers and partner companies, digging deeper into them, and making persuasive and sharp proposals. After all, this ultimately relies on people. Those who acquire digital skills and continue to sincerely deal with partner companies and customers, without losing passion and sincerity, will naturally become DX human resources that create change. Of the five operating segments of Tokyo Century, equipment leasing in particular will require greater skills to make proposals that differentiate it from other companies. I have high hopes that future DX strategies will create many DX human resources with the spirit of challenge and that they will generate innovative ideas that are not bound by conventional wisdom. DX and HRX are two sides of the same coin when it comes to realizing TCX. Tokyo Century will continue to acquire and utilize digital technology in tandem with the growth of our human resources.

Koichi Baba

President & CEO, Representative Director

Joined Century Tokyo Leasing (now Tokyo Century) in 2014. After serving as director and senior managing executive officer and president of the Corporate Planning Unit, he assumed the position of president & CEO in April 2022. He possesses abundant experience and extensive knowledge based on his involvement in the domestic and overseas sales operations at a financial institution and has experience in executing operations as president of the Corporate Planning Unit of Tokyo Century.

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

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