The DX Journey®—Scripting the story of transformation in full

The last few years have seen a growing number of companies starting digital transformation (DX)* initiatives as a part of overall business reforms. But most have yet to show progress in accomplishing their goals—anything achieved tends to be limited to relatively small-scale measures. We have found this issue to plague both companies that hastily set off without an overarching vision for DX, as well as those that did state a vision.

This is one finding from our December 2021^† survey of companies with sales over ¥10 billion. The survey showed that “formulating a DX vision” is a low priority among companies that have just stated one. In other words, companies assume the task to be done once they have put together the first rendition of their vision. However, a company’s DX vision shows its true colors for a second time as subsequent initiatives are derived from it and plans put into action based on it. What these findings point to is a phenomenon where companies rediscover the value and significance of their DX vision in ways they were unaware of when first setting off.

These division leaders are tasked with attaining financial growth each year over the duration of the medium-term business plan, usually three years. DX progress will stall if discussions are limited to improving the work immediately at hand. Initiatives that lack certainty or urgency will drop in priority, and teams implementing them will lose the confidence of their colleagues, who become less willing to cooperate, resulting in delayed DX. This will prevent DX teams from developing cooperative relationships with those in charge of the company’s current business divisions, exactly where the knowledge necessary to make DX strategies effective lies. Thus, a company will struggle to put initiatives into action and fail to achieve qualitative and quantitative results. Momentum for DX will peter out.

This dilemma can be overcome with a solid investment plan that makes a credibly compelling case for achieving business growth.

DX can be kicked back into gear with a compelling story. First, companies must clarify what they need for their own business reforms from two perspectives—opportunities such as creating new markets and delivering new value to customers, and threats such as being weeded out of the market. The scope of benefits borne through digital technologies should be estimated in terms of human resources, costs, sales, and value delivered to customers. This will encourage a greater degree of involvement from a company’s current business leadership, making it possible to transcend the aforementioned DX innovation dilemma.

Moving forward, a DX story should be crafted that incorporates the significance digital technologies have for each division’s business conditions and accompanying strategies. The digitization of business data for each division is a prerequisite for transformational success—reforming one single field will not change management as a whole.

Individual initiatives could range from future business model reforms to improved competitiveness of service. The quickest way for a company to achieve its goals is to combine individual initiatives that form part of the ultimate DX goal and attain interim goals that have been set—DX as a story, the DX Journey®, serves as a navigational chart shared between the organization advancing DX and the businesses divisions that have to implement it.

This process benefits well from the relevance of reform initiatives at all organizational levels: top management, business division leadership, and frontline workers. Ensuring this relevance protects a company’s initiatives from the formation of an intra-organizational chasm in perception of DX (Figure 1). Furthermore, business strategies should remain true to the reasons for which digital technology is to be used. And beyond this level sits the company’s ultimate goals, shining as a guiding star for all on the journey.