Japanese companies lagging in embracing digital management compared to U.S. homologs: JEITA requests efforts to take on broad business challenges and pursue a more flexible human resource policy

The Solution Services Committee of the General Incorporated Association, Japan Electronics and Information Technology Industries Association (JEITA) held an online press conference on March 6 to announce the results of the "Japan-U.S. Digital Management Survey" conducted jointly with IDC Japan. Junichi Ishibashi (Fujitsu Limited), the chair of the JEITA Solution Services Committee (which conducted the survey), and Kenji Kobori (NEC Corp), the vice chair of the Committee, attended the press conference and provided details.

The survey made it clear that the percentage of U.S. companies in which digital management is in the practical stage exceeds 50%, whereas for Japanese companies it is only around 25%, again indicating that Japanese companies lag behind their U.S. homologs in digital management efforts. The survey results indicated that Japanese companies should enhance their awareness of "digital management," which requires using digital technology from a "management" perspective to implement human resource policies and organizational reforms facing the realities of Japanese companies. Discarding the idea that "only U.S. companies can do it" was another recommendation indicated from survey responses. The survey targeted managers and executives of non-IT departments in the private sector, and about 300 companies in both Japan and the U.S., cooperated.

The survey findings revealed that Japanese companies in general use digital technologies to seek "efficiency," and more than half have a long-term digital strategy. Further, those having integrated their digital and business strategies have clear "offensive" objectives and are oriented toward growth through data-driven management.

The report stated that Japanese companies' digital human resource development in technology and business divisions focuses on "reskilling" existing employees. This approach differs from U.S. companies, which recruit from the outside and utilize corporate buyouts. Therefore, a broader human resource procurement strategy is required. Japanese companies also mainly apply digital technologies to digitize "processes," but the scope of the application is narrower than that in the U.S. Data-driven management has only just begun in Japan. They have limited awareness of "the need to change the organizational culture in order to promote digital management."

Proposals for Changing Minds

● Enhanced awareness of "management" driven by the digital

Broadening awareness of "digital management" which expands digital utilization from a "management" perspective, is essential, as is exploring the possibility of using many technologies to be effective in a wide range of business processes. Defining higher-order objectives is also necessary, not only "for digital," but also for "competitiveness," "for employee motivation," and to embed "digital", in every corner of management. These areas include strategies, human resources, investments, organizational culture, and corporate social responsibility (CSR).

● A human resource policy and organizational reform adapted to the reality of Japanese companies.

In situations where in-house IT personnel are limited, partnering and vendor utilization are essential. A human resource management system that considers increased mobility is necessary for the purpose of enabling talented individuals with various knowledge, skills, and experience to be active in the right place at the right time. For this purpose, it is also necessary to strengthen corporation between the human resource management system and a personnel appraisal system.

● Discard the prejudice that "only American companies do it"

U.S. companies have extended efforts to address "opposition elements." Cooperation between top and middle management is required. There is no reason why U.S. companies can achieve this, and Japanese companies cannot.