What the heck is DX?

This section explains the meaning of DX (Digital Transformation).

DX is said to be a concept that spread after Erik Strterman, a professor at Umeå University in Sweden, proposed it in a paper in 2004. For a definition, refer to the Ministry of Economy, Trade and Industry's "DX Promotion Guidelines" as follows 

To establish competitive advantage by transforming products, services, and business models based on the needs of customers and society, as well as by transforming the business itself, the organization, processes, and corporate culture and climate, using data and digital technology to respond to rapid changes in the business environment.

The key point is the inclusion of the words "based on the needs of customers and society" and "establish a competitive advantage. Digital in the context of DX refers mainly to advanced technologies such as cloud computing, IoT, AI, 5G,  https://slimtime.co.jp/ and big data analysis.

In short, DX is a management challenge to "reform the organization so that it can survive in the new society (a society where all things are connected via the Internet)" and "win the competition by creating new products and services that will win the customers' orders (and be profitable)," as digital technology will rapidly change the industrial structure in the near future.

Technology is evolving so fast that even now, without legal constraints, a futuristic society like that of China is becoming feasible.

Why is DX so important?

Digitalization will become important for sales organizations as well, and it is still fresh in our minds that many corporate salespeople struggled with the unfamiliarity of introducing online sales during the 2020 Corona disaster. However, companies that have been digitizing their sales force for a year or two were able to get through it smoothly.

For example, in 2018, SoftBank Corp. radically reformed its organization by assigning its previous head of direct sales to lead the inside sales division. By making effective use of senior employees and changing the evaluation system, the company was quick to focus on digital sales and increase its business performance, and although it may be a coincidence, it has already reached the point where it is able to realize the new normal in sales.

Sales departments that are able to use digital technology to flexibly change their sales structure in response to changes in society and to effectively utilize data and human resources to make better proposals to customers are likely to survive even in times of change.

DX is a term that encompasses everything from the stage of partial digitalization and business efficiency improvement to business creation and innovation through digitalization, as shown below. Let's take a look at where your company stands today.

Background of DX as a topic of discussion

As digital technology has developed, it has become more accessible to everyone. Even in sales departments, SaaS (subscription-based monthly cloud systems) are becoming more and more popular. The reason why DX is becoming a hot topic even in sales departments is because sales departments have long been considered problematic for their inefficiency, high degree of dependency, and wastefulness.

Since the spread of the Internet, people have been saying "we don't need salespeople anymore" on a regular basis. Reports of how much waste there is in the sales field in Japan also appear frequently.

A 2019 HubSpot study reported that "25.5% of working hours are wasted" in corporate sales in Japan, resulting in an economic loss of "approximately 830 billion yen per year".

Advantages and disadvantages of implementing DX

Promoting DX is necessary to survive and thrive at a time of great change, but it has both advantages and disadvantages.  

Advantages of DX

First, let's look at the advantages of DX in the sales domain.

Can respond to an after-coronary society

In the past, sales was based on real work, but with the spread of the corona virus, it has become important to continue work digitally.

Sales can be conducted at home using an online conference system.

Using VR, it is possible to witness factory shipments and experience model rooms for houses.

Using an electronic contracting system, there is no need to come to the office for stamping, printing, or mailing.

Improved productivity and efficiency

In the past, when a salesperson visited a client in person, he or she would spend time traveling to the client's office, talk with the client for a certain amount of time (about an hour) even if the prospects for the client were not good, and then spend time traveling back to the office. By using DX, you can talk to customers online, and depending on the product or service, you can even complete the contract. The reduced travel time can be used for sales activities.

More time for sales activities = more sales.

Reduced travel time and transportation costs

Reduced office expenses (fewer days at the office and fewer offices because there is no need to travel)

Increased management precision

DX has made it easier to quantitatively measure sales ability, which used to be described as experience, sense, and intuition. With IT tools that automatically record and transcribe telemarketing calls, you can know how many calls you made in a day and what they were about without having to listen to the salesperson's report. Management becomes smoother with the ability to manage actions, current deal volume, and team customer information in an integrated manner.

Accurate records of sales activities can be kept and shared

Understand the movement of sales projects in real time.

It is easy to understand the trends, strengths, and weaknesses of each salesperson's sales activities.

Disadvantages of DX

Next, I will explain the disadvantages of DX.

It is difficult for some departments to promote it (company-wide support is necessary)

It is best to introduce DX on a company-wide basis. Even when introducing a customer management tool, it is necessary to understand how to use it and how to utilize it not only in the sales department but also across departments such as the administration, accounting and support departments.

However, for better or worse, most Japanese companies are bottom-up organizations where employees have a strong influence, and even the managers are often not familiar with all aspects of the business, so they tend to throw everything at the department in charge. As a result, various systems are often mixed together, which can be inconvenient. If management throws all the responsibility for DX promotion to one department, it may be difficult to succeed unless the person in charge has considerable ability and power.

Lack of DX personnel

Currently, it is difficult to hire DX personnel, for example, those who are knowledgeable about AI, unless you pay them a very high salary. This is why they are focusing on in-house production (training their own employees). The first barrier may be, "We don't have any employees who can handle DX.

The fact that there is a shortage of human resources means that there is not much difference between companies, so you need to think positively and have your own employees who are strong in digital take external training to develop them. If you do not spend money on training, your staff may not be able to play an active role.

Difficulty in selecting the right tools for your company       

In order to promote DX, you need to choose the right IT tools for your company according to your objectives, but it is also true that it is difficult to find the right tools. If you introduce a tool that is too high-spec because it is a system of a major company, it tends to be too difficult to use and become a waste of money.

A company that wants to do simple management does not need to use a multifunctional IT tool. Ease of use is also important, and with many employees being digitally challenged, introducing a tool that is too complicated to operate will not gain traction. It is necessary to choose a tool that can be operated intuitively.

Continued operation is necessary         

Even if you promote DX, you won't see immediate results. Also, DX promotion needs to be continued all the time, not just for a short period of time. This is because technology evolves quickly.

Whether it is sales management or case management, it is necessary to continuously operate the system and incorporate the findings into the actual sales strategy. Currently, although AI-equipped tools can make some recommendations, there is no such thing as "great discoveries every day" just because they have been introduced.

Rather, at the beginning, there will be many discoveries that support your intuition with data, such as "I had a hint of this, but when I looked at the data, I realized it was true ....... However, this accumulation is important. It is important to be prepared for long-term operation, because insights are created by a combination of intuition, data, and experience.

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