With Business Transformation Years Behind the US, Japanese Service Companies Have a Roadmap to Follow and Big Changes to Make
Jun Shinohara is a man on a mission. As Accenture Japan‘s managing director, Shinohara spent more than two decades acting as a trusted sage and problem solver for organizations in Japan that are serious about using technology to transform how they do business.
Shinohara and his team at Accenture regard this digital transformation as a challenge that Japanese companies urgently need to address. While Japan is generally regarded as a futuristic and efficient society that has incorporated technology into almost every aspect of daily life, from the world’s fastest trains, robotic exoskeletons, and even robot restaurants, service management in the country still lags behind its counterparts overseas when it comes to implementing new technologies and processes to increase customer value.
“When it comes to business transformation, Japan is three years behind the United States and a year behind Europe,” Shinohara says. “The good news for Japanese businesses is they can see what already has worked and what has not, and can then choose the best path forward.”
The Roadmap to Digital Business Success
In Japan and around the world, the need for digital transformation in the service industry is being driven by three broad conditions: a skills gap and an ongoing labor shortage where businesses must do more with less, a need for more actionable data to reduce costs and generate more revenue, and an increased focus on improving customer service and customer value.
However, thanks to IoT and AI, advances in cloud computing, and other technological developments, digital transformation is gaining traction in Japan, Shinohara says. He also points out that digital transformation is more than just a euphemism for modernization, such as migrating from in-house servers to the cloud.
“I think everyone is familiar with the Japanese concept of kaizen, or continuous, incremental improvements of business processes,” Shinohara says.
“However, kaizen and digital business transformation are quite different—digital transformation is about truly rethinking and creating an entirely new future for the company, and then coming up with a plan and a road map to get there.”
Digital transformation can include incorporating AI to receive error messages and assist with service and dispatch, and then efficiently and quickly solve customer problems, Shinohara says. Implementing predictive maintenance and managing supply chains to dramatically cut down costs are also common goals for service departments as part of digital transformation.
However, beyond optimization, Shinohara says one of the key differences between kaizen and digital transformation is gathering insights that the whole business can learn from to increase customer value.
The traditional siloed nature of Japanese business means many insights about the customer gathered by the field service delivery team are lost, according to Shinohara. In contrast, digital transformation introduces a “360-degree customer view” into the organization. Data is shared across what were once organizational silos, so different departments can share actionable information about a customer. By sharing data about past maintenance and repair patterns across the business, it’s possible to solve problems for customers and predict future sales opportunities. As well, the data collected by field service teams can be used by sales and marketing teams to craft and deliver relevant messages that increase sales.
Shinohara notes the example of a parts-maker in Europe that has so far been very effective in integrating cloud applications, SaaS platforms, connected devices, and artificial intelligence (AI). By pursuing digital transformation, the parts-maker was able to connect every aspect of its field service management, such as central operations, dispatch, repair, predictive maintenance, and other activities, Shinohara says. As a result, the company was able to streamline its supply chain and reduce costs, gather more and better insights from customers, and identify new business opportunities.
“A key to the company’s success is that the CEO himself drove digital transformation,” Shinohara says. “Using IoT and AI, things have moved very fast.”
Moving From Silos to a 360-Degree Customer View
While it’s not easy for businesses anywhere in the world to successfully transform field service delivery, Japanese businesses face unique challenges.
Unlike the example of the parts-maker in Europe, where leadership owns the digital transformation process, businesses in Japan often operate independently, Shinohara says. “For example, the business development people don’t typically talk to the field service delivery team, so there are few meaningful opportunities to share strategic insights about customer experience or customer needs,” he says.
Shinohara says that another consequence of the siloed nature of Japanese businesses is that the field service team is typically never able to wield the budget or organizational clout needed to effectively implement new technological and organizational processes. As a result, digital transformation in the field service space in Japan is typically carried out in a piecemeal, uncoordinated way, lacking efficiency and improvements in productivity.
“Typically, a chief customer service officer in Japan is not a major player in a Japanese organization, even though they are a key point of contact with the customer,” Shinohara says. “So, one of the most valuable roles for the Accenture Japan team is to help break down internal organizational walls and bring leadership from different departments together, from the CEO and the CIO to sales executives, to take on the complex task of business transformation.”
The result of increased conversation, coupled with digital transformation, Shinohara says, is the aforementioned “360-degree view” that delivers a personalized and unified profile of each customer.
“A 360-degree customer view is an end-to-end journey that integrates business processes, including marketing, business development, customer acquisition, product delivery, after-sales service and repairs, and so on,” Shinohara says. “The service team serves as a touchpoint, and their insights help improve the value of the customer to the business.”
By embracing digital transformation, Shinohara says, businesses make customers the center of everything they do. This creates tremendous opportunities for growth in a changing market.
“What kind of future do you want to create?” he asks. “And how can we help you get there?