
In the rapidly evolving landscape of digital transformation (DX), Japanese companies face unique challenges, often hindered by resource limitations and structural frictions. En-Japan, a leading HR service company, exemplifies these challenges and has successfully navigated them, providing a case study that reflects broader trends in Japan's struggle and potential in DX.
The Dual Pressure: Maintenance vs. Innovation
En-Japan's journey towards digital transformation was precipitated by an overburdened IT department, overwhelmed by the dual pressure of maintaining existing systems and accommodating constant business demands for new features. This dichotomy mirrors a common issue across many Japanese companies that we have consulted regardless of size: while business departments drive for rapid adaptation to competitive markets, IT teams are stretched thin, prioritizing system stability and incremental improvements over bold innovative changes.
Bridging the Divide: The Role of the Midfielder
To counteract this imbalance, En-Japan introduced a 'midfielder' role within business departments—individuals capable of liaising effectively between IT and business functions. This strategic move involved reskilling business team members to act as intermediaries, easing the IT department's load and aligning system modifications more closely with business needs. This repositioning facilitated smoother communication, enabling rapid and effective implementation of business-driven system enhancements.
En-Japan’s success in fostering an environment conducive to DX was also aided by the use of no-code development platforms that empowered business departments to develop their own applications. This led to significant efficiencies, including saving 26,000 hours annually through redesigned workflows and developing 6,973 applications by August 2024.
The Key to DX: Cultural and Organizational Alignment
Achieving digital transformation requires more than technology; it necessitates cultural and organizational shifts. En-Japan emphasizes collaborative roles and the alignment of IT with business goals, underpinned by a company culture of continuous improvement and mutual support. This approach not only facilitates technological adoption but also nurtures an internal culture that values innovation and cooperation.
Their strategy includes leveraging internal talent through robust reskilling initiatives and comprehensive employee assessment systems ("Talent Analytics"), ensuring a pool of ready, adaptable DX talent within the organization. This nuanced understanding of employee potential supports strategic workforce planning and the development of DX capabilities.
Opportunities for Foreign Companies
For foreign tech firms, understanding the internal dynamics of Japanese companies offers a significant edge. Many businesses in Japan are actively seeking solutions that streamline operations and enhance sales through automation and analytics. Recognizing the need for effective translators—both literal and metaphorical—who can bridge IT and business requirements is crucial for market entry.
DX departments are often the right place to go to; however, bear in mind that, due to the demand from the Ministry of Economy, Trand and Industry (METI) to push for digitalization, many companies have simply created DX departments without even a mission or purpose -- we have had some requests to define their mission long after the department was created.
Another risk is that, depending on how the DX department was created, they may not have enough power to implement the solutions that they find attractive. This is not the case when members have been culled from the sales department, however, when most of the members are hired from outside, then they tend to be isolated from the "business that matters." In that case, it is crucial that you take the initiative to help them get in touch with the actual sales people to understand the issues and see whether your solution would be a good fit.
Conclusion: Unlocking Potential with Strategic Partnerships
The story of En-Japan is not only an insight into a successful DX case but also a roadmap for foreign enterprises looking to penetrate the Japanese market. By understanding the delicate coordination required between business innovation and IT stability, foreign companies can ensure that they approach the right person (or even multiple people at the same time to make a coordinated approach across the company), tailor their offerings to meet these specific needs, unlocking substantial opportunities within Japan's digital frontier.
Are you ready to explore the opportunities in Japan’s evolving digital landscape? Visit Brandancor Japan to learn how we can support your market entry and business growth in Japan. Unlock your potential with our strategic insights and tailored solutions.
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