In today’s podcast, Anthony and Luke discuss the main challenges of digital transformation in Japan. While Japan is seen globally as a country at the forefront of digital transformation, steps are still required to become a world leader. In many aspects, they believe Japan is far behind countries like China and the US and will discuss why that might be.
They explain the Japanese government’s push towards “Society 5.0” and how the private sector is leveraging AI, cloud computing, and IoT adoption. The podcast explains in detail six key points as to why digital transformation can be a challenging process for many organizations:
- Resistance to change
- Lack of digital skills
- Legacy systems and infrastructure
- Data management and security
- Cost and resource constraints
- Lack of clear goals and strategy
- Resistance to change
1) Resistance to change: One of the main challenges of digital transformation is getting people to embrace new technologies and processes. Change can be particularly difficult in organizations with a deeply entrenched culture and established way of doing things.
2) Lack of digital skills: Many organizations lack the necessary digital skills and expertise to plan and execute a digital transformation effectively. The lack of skills can result in delays, mistakes, and, ultimately, a failure to achieve the desired outcomes. Staff with digital, technology and marketing skills and experience are rare.
In Japan, they see companies needing to choose between two pathways.
1) Bringing in outside digital talent that cannot speak Japanese fluently or lacks industry domain knowledge. Lack of Japanese language skills causes challenges as companies must utilize translators to deal with local teams (especially sales teams) with limited English capabilities.2) Train local (Japanese) talent in developing their digital/technical capabilities. Global companies need help changing the mindset of local talent so staff can speak up and make recommendations in a fast-paced agile environment.
4) Data management and security: As organizations increasingly rely on data to make decisions, it’s crucial to have proper data management and security measures in place. Data management and security can be complex and time-consuming, particularly for organizations that handle sensitive or confidential data.
One of the issues companies that the Titan Business Innovation team works with is understanding where they are at with their data management process. So rather than hiring engineers to set up the data lakes and warehouses, they bring in a data analyst or scientist to create dashboards to report to the business side. However, extracting information requires having the data in the proper structure. Lack of data structure causes frustrations resulting in reduced motivation among staff or losing staff to competitors.
5) Cost and resource constraints: Digital transformation often requires significant investments in new technologies, software, and personnel. This cost can be a significant challenge for organizations with limited resources or tight budgets. For example, one of our clients completed only 60% of the project before the budget ran out. After the budget ran out, they couldn’t get additional funding, so it was like building a new train line but running out of tracks before finishing.
6) Lack of clear goals and strategy: Digital transformation is a complex process that requires a clear vision and strategy. Organizations that need a clear roadmap or specific goals for their transformation may need help to progress and achieve desired outcomes. Unfortunately, many digital transformation initiatives become random IT projects with no synergy. As a result, the ultimate goal still needs to be realized, or they have to change the goalposts completely.
Overall, digital transformation is a complex process that requires careful planning, the right skills and resources, and a willingness to embrace change. By addressing these challenges, organizations can successfully navigate the digital transformation process and stay ahead of the competition.
To summarize, various industries are leveraging digital technologies in Japan to stay competitive and improve their operations. Furthermore, Japan is moving to the forefront of digital transformation because the government is pushing toward Society 5.0 to the private sector’s adoption of AI, cloud computing, and IoT.
However, there are challenges to overcome, such as the aging population causing resistance to change and the need to modernize legacy IT systems. Despite these challenges, Japan is making significant progress toward digital transformation, and the outlook is positive.
Please listen to the full podcast episode where Anthony and Luke explore the above points more thoroughly.