Joint ICT Initiatives to Promote Co-Creation & Accelerate Innovation

Fujitsu Forum 2015 Tokyo, Fujitsu's largest annual event, was held on May 14-15 at the Tokyo International Forum in Yurakucho. Over the two days, several Fujitsu customers discussed the theme of Co-creation, giving presentations on their real-world experience of using Fujitsu products and services.

From hardware to solutions, companies across a wide variety of industries are employing a broad range of Fujitsu products and services. Several partner companies and organizations gave presentations of their unique initiatives.

Special Presentation: Becoming a "Smart Life" Partner

Mr. Kazuhiro Yoshizawa, Senior Executive Vice President, NTT DOCOMO, Inc.

Smartphones and other mobile internet devices have become integral parts of our lives. Mobile carriers like NTT DOCOMO are now offering services that make people's lifestyles easier. Currently, the company is focused on its new Smart Life services.

NTT DOCOMO Senior Executive Vice President, Mr. Kazuhiro Yoshizawa, told the audience, "As a mobile service provider, we must provide broad-ranging, fast, and convenient high-speed LTE services." To that end, DOCOMO is collaborating with a number of partners to create fully-featured new services that contribute to people's lives. He showed its future direction, "We hope these initiatives will help us deliver new Smart life applications and services." Looking to the future, the company is advancing innovations while proactively developing new businesses.

During its presentation, he talked about the world's first iris authentication feature, which is available on a prototype Fujitsu smartphone. Beyond basic smartphone security, iris authentication can also be used when purchasing content. Eliminating ID and password entry will make smartphones even more convenient.

Other Smart Life examples included a solution utilizing car navigation systems. In the demonstration video, a couple is on their way to a ski resort. Before they depart, their smartphone provides them with traffic information. On the way, they receive an "automatic" update about the destination ski resort telling them that it will be crowded. The service then provides information on nearby ski resorts that are less busy.

Mr. Yoshizawa said, "We can't make this kind of Smart Life a reality on our own. Collaborating with other companies will allow us to produce value-added products that make life better for our customers. In other words, we can create value through Collaborative Creation."

As an example, he cited services that allow customers to enjoy for a single monthly fee magazines and television programs like d MAGAZINE and d VIDEO. Collaborating with publishers and broadcasters to provide rich content attracts more users. As part of the recently announced partnership with Lawson convenience stores, DOCOMO customers will be able to use their d POINTS at Lawson outlets. He described this as being an example of Collaborative Creation.

Mr. Yoshizawa ended his presentation by telling the audience, "Users have a wide variety of needs. Offering a diversity of Smart Life services is vital. Collaborative Creation with many partners is an effective approach to deliver that diversity. We're moving forward with "+ d (Plus D)" initiatives that maximize the value added by cooperating with partners, allowing us to deliver rich Smart Life services."

Special Presentation: Implementation of Measures for Land and Infrastructure while Using ICT

Mr. Hideo Tokuyama, Vice-Minister for Engineering Affairs, Ministry of Land, Infrastructure, Transport and Tourism

The Ministry of Land, Infrastructure and Transport (MLIT) has long worked to improve Japan's roads. The ministry has constructed a vast network of highways in the nation, including a highway system connecting all regions of Japan. MLIT Vice-Minister for Engineering Affairs, Mr. Hideo Tokuyama, showed the audience how the ministry uses ICT to reduce highway traffic congestion and improve road maintenance.

Highways can handle about 1,400 automobiles per hour. He explained, "When the number of vehicles is within that number, traffic flows smoothly. However, if the number of vehicles rises even ten percent above that level, you get traffic congestion. What this means is that, if you could induce that ten percent of extra drivers to take alternative routes, you could eliminate traffic congestion."

The ministry is working on ETC 2.0 as an effective means to accomplish this goal. In addition to simply collecting road tolls, the new system will collect information on traffic congestion, road conditions, and more. The ministry is exploring ways to use that information to avoid traffic jams.

Many traffic accidents occur on local roads. As many drivers use these roads to avoid highway traffic, eliminating this congestion could potentially increase the number of vehicles using highways. To explain further, using highway resources more wisely could also help prevent accidents on local roads."

The MLIT also has established a network of service areas. These facilities have recorded annual sales of regional agricultural products totaling some 210 billion yen. This figure would make them the country's fifth largest convenience store chain.

Mr. Tokuyama noted, "Rather than selling the same range of merchandise across Japan, each service area features products representative of its area." Those sales also help stimulate local economies. Going forward, the ministry is exploring disaster centers and clinics with heliports as a response to the aging Japanese population." If we provide the entire nation with the same kind of facilities, that would lessen the impact of highway stations promoting regional specialties. So we want to promote development to resolve unique regional issues."

He also touched upon another recent issue in Japan's aging highway infrastructure: "Aging roads and bridges need maintenance. Using ICT, we'll be able to analyze data to determine where repairs are required, and better distribute our budgets efficiently. "

When it comes to repairing old roads, renovation is not the only reform option: "In the United States, the government has rebuilt old roads to be underground, converting the land above into public park space. That is to say, roadway redevelopment can be more than merely laying fresh asphalt." Mr. Tokuyama closed his presentation by telling the audience that he believes we have an opportunity to change the appearance of cities and discuss the future for road administration.

Special Presentation: Japanese Economic Recovery Through High-tech Fish-farming Exports

Mr. Masahiko Ariji, Associate Professor, Laboratory of Fisheries Economics, Department of Fisheries, School of Agriculture, Kinki University

Japan is currently dealing with a dwindling birthrate, together with an aging and declining population. These issues are shrinking Japan's domestic market for a wide variety of industries. For the food industry, demographic changes are reducing the number of young people, who tend to consume more food than older people.

Shokuen Co., Ltd. president, Mr. Masahiko Ariji is an associate professor in the Kinki University Faculty of Agriculture, He said, "There's no doubt that the domestic market is shrinking. While cities are still profitable, regional economic structures are critically close to collapsing. Resolving the issues at hand will require the special power of regions' distinctiveness."

"Japan's current economic structure is not sustainable. Regional economies are not self-sustaining. Many regional governments are desperately searching for strategic solutions. In reality, however, regional economies still have effective options at their disposal."

One such option is aquaculture. While Japan's domestic fishing industry is shrinking, overseas markets are still expanding. Consumption of seafood is more than double that of livestock such as cattle and pigs. The market potential abroad looks very promising.

Unfortunately, Mr. Ariji believes Japan's traditional industry approach lacks adequate management discipline: "Japan's aquaculture technology is world class. Japan is the only place in the world where market players can say, 'We want to produce fish with this flavor,' and then do so." Also, as it stretches north-south, Japan can produce a wide variety of fish from both cold and warm water regions: "Japan has successfully farmed 18 types of fish, while Norway has successfully produced salmon, trout, and cod."

However, developing aquaculture for the global market requires new methods of business: "When selling to global markets, you must first achieve the mass production of fish with a consistent taste. As the transport distance grows, you must develop different processing technology. You must also maintain a hygienic processing environment and maintenance is also required. Furthermore, the taste preferences of non-Japanese are very different. Overseas customers shy away from overly smelly fish, and prefer white fish meat over dark. We must grow fish for tastes other than those of Japan."

Japan's aquaculture industry possesses craftsmanship to control the taste of fish. By applying ICT and management techniques, expanding the nation's advanced aquaculture into world markets should be possible.

Here, independently work by individual fish farmers has been ineffective. To compete in global markets, industry groups and companies possessing a variety of technologies must work together. Mr. Ariji said, "That's why we established Shokuen." Moving forward, he's confident that, "We can expand into global markets if we can develop initiatives focused on developing aquaculture."

Special Presentation: Retail Transformation

Mr. Hiroshi Ohnishi, President and CEO, Isetan Mitsukoshi Holdings

Over the long history of their history, department stores have time and again adapted to market changes. Most recently, internet-based e-commerce alternatives to traditional over-the-counter sales channels become increasingly popular. Also, Japan's declining birthrate and aging population have expanded the senior market.

Mitsukoshi Isetan Holdings has implemented an initiative to craft a new vision for the retail industry. President and CEO Mr. Hiroshi Ohnishi, said the key is "Absolute Value." He believes it is important to provide customers with shopping choices to encourage purchases.

However, he also believes providing Absolute Value to motivate shoppers to make purchases is vital: Customers decide to purchase when they feel "a product is worth more than the price." Based on this approach, the company is currently implementing a number of reforms.

When consumers look at products, they attach a value to them in. When they feel that value is higher than the price, they are motivated to buy. He believes that the principle of Absolute Value may be one way to "find the hidden value in Japan's local regions."

These regions are home to local craftsmen producing high-quality fabrics. Some foreign brands are creating high-quality products made using Japanese fabrics for very high prices.

In cooperation with these craftsmen and younger people trying to implement economic reforms in rural areas, we are supporting new product development. For example, the company is selling chairs priced from 100,000 to 150,000 yen (approx. US$825 to US$1,240), and local wines which were newly produced by local young generation. He hopes to continue to expand these operations to new regions and new products.

In August, the company will begin experimenting with crowdfunding--a new method for soliciting funds for new product development via the internet. Normally, the company only explores sales channels for finished products. Using this new approach, the company is getting involved from the planning stage, proceeding on the assumption that Isetan will sell the finished product. He said, "This is merely our first attempt in the world of crowdfunding."

In addition, given the growing diversity of tastes, the company is also making changes to its sales strategy: "Normally, we would try to forecast sales when pre-ordering products. Recently, we have increased product life cycles to six weeks from four. During each cycle, we make changes to products based on an analysis of store sales. For example, based on an analysis of weekend sales results, we'll make a hypothesis on Monday, and then implement the plan in the store on Wednesday. In this way, we're speeding up the cycle."

He said, "producing Absolute Value ultimately requires 'people power.'" Thus it is important to being able to accurately assess personnel. For example, some store sales staff are responsible for several hundred million yen in sales each year.

"I'd like to be able to analyze people's skills so other staff can learn from them. Here we would like to leverage the power of ICT, "said Mr. Ohnishi. At this point, he introduced an example from the Shoe Department at the Shinjuku main store. The company used wearable devices like smart watches to observe veteran sales staff. By applying these lessons to other staff, the department improved its service hit rate (amount of purchases divided by customers served) from 40% to 58%.

Going forward, he hopes to analyze and visualize the skills of talented salespersons using the power of ICT. Mr. Ohnishi concluded his presentation by saying, "We hope to expand our use of ICT to put the appropriate personnel in place, and build long-term relationships with our customers."

Special Presentation: the "Kaiteki" Company

Mr. Yoshimitsu Kobayashi, Chairman, Mitsubishi Chemical Holdings Corporation

Enterprises are emphasizing the making of social responsibilities. In the past, this concept was categorized under CSR. However, recently, we see more individual efforts to reduce CO2 emissions. Now, our generation is being asked what sort of world we will leave to our children.

Mitsubishi Chemical Holdings Co. President Mr. Yoshimitsu Kobayashi, asked:
-How should companies operate to preserve the global environment?
-What do Japanese companies need to survive in a global world?

He summarized the answers to these questions into three keywords: Health, Comfort, and Sustainability. He said, "Going forward, we should not begin new ventures that do not satisfy these three dimensions." This is the concept of the "Kaiteki" Company. In addition to management that strives to achieve these three dimensions, he said his company has addressed a fourth dimension, which captures methods for enhancing corporate value through the first three.

However, he recognizes the ambiguity of using Comfort as a guideline. He noted that it is hard to define a clear reference to determine a company's progress towards its goals. Here, the company created a method for quantifying these calculations, implementing its proprietary MOS Index1.

He told the audience, "Some felt that reducing CO2 emissions, would increase costs and reduce operating profits, but to date, a high MOS index ranking has coincided with higher operating incomes."

The company also introduced what he calls an Open Shared Business (OSB) initiative to strengthen competitiveness. Traditionally, Japanese manufacturers have developed materials and services domestically themselves, and manufactured products abroad. However, this method is slow and vulnerable to global competition. Applying the OSB concept, the company is reaching out to other companies that possess technology it does not have in-house to collaborate on research and development, as well as in other areas of business.

He said, "Collaborating with other companies lets us strategically combine closed-off sections of our business externally. This way we can construct business models that cannot easily be replicated by other companies. The added value gives us a tremendous advantage over our competitors, as we can quickly develop new products."

After introducing a variety of businesses for the construction of a new carbon society, Mr. Kobayashi closed his presentation by saying he hopes to "expand these businesses while contributing to the global environment."

1 The MOS Index is a new set of management indicators for visualizing corporate contributions to people, society, and environmental sustainability in the same way management uses operating income or total capital profit ratio as indicators of financial sustainability.

Special Presentation: Ricoh's Challenge--Creating the Future

Mr. Shiro Kondo, Representative Director, Chairman, Ricoh Company, Ltd.

Ricoh's Representative Director, Chairman, Mr. Shiro Kondo opened his presentation by saying, "Management must be able to analyze business conditions starting from both the current time and points in the future, and the ability to analyze is required from both points of view."

"These points of view will yield completely different results. The current starting point is appropriate for analyzing our most recent performance. However, if you developed a new product by starting from where you are currently, you'd be lapped before you could reach the finish line. Management must be able to see ahead, both in terms of current profits and future profits."

Subsequently, Mr. Kondo said, "Large companies are increasingly using their current position as a starting point." He named this the "large company disease." As an example, he cited the prevalence of in-house production: "If you are a sales company, you should focus on selling to customers. Wasting effort trying to produce goods in-house takes away from your primary business."

Here, Ricoh set about improving its internal business processes. By simplifying their organization, they were able to reduce internal management and prioritize external efforts. In this way, employees were able to use their time more efficiently, boosting productivity.

To support these business process reforms, the company also reimagined its office environment. For example, as it was more efficient for salespeople to go straight home after their last sales call for the day, they traded individual desks for communal office space, and created virtual offices using free addresses or ICT.

On the other hand, employees involved in administration work worked more efficiently having their own desks. In other words, the company allows employees to vary their individual work styles in accordance with the demands of their jobs.

All employees share a concept: their offices are a place for intellectual creation and discovery. All that you need in such an office is the opportunity to interact with other people: namely, people with different ideas who work in different positions who are inspired by exchanging opinions with others in the same workplace. In this way, something new can be created. This is the functionality of the future office. Ricoh is promoting a variety of reform projects based on this vision.

Special Presentation: Operational Reforms at Resona Bank

Mr. Tetsuya Shiratori, Managing Executive Officer, Business Process Reengineering Division, Information Technology Planning Division, Resona Bank, Ltd.

Resona Bank's Managing Executive Officer, Mr. Tetsuya Shiratori opened his presentation by saying, "Many believe that there is a large divide between society's view point of banks and the way of thinking inside those banks. Recognizing this gap in perceptions was the first step toward operational reform for our bank."

"For example, teller windows close at 3 PM. This is because subsequent processes need to be carried out. However, this is merely for the bank's convenience. It has nothing to do with our customers. In addition, the fact that bank employees sit in chairs, while customers are made to stand in line waiting for assistance would seem unacceptable in other industries. We began our reform efforts here."

The bank's reform concept is simple: Do not make customers wait, stamp, or write anything: the three "don'ts." To achieve these goals, the bank needs to make branches paperless, cashless, and "back office-less"--or the three "lesses." Specifically, the bank: established a quick payments window, and a communications terminal used for asking for advice.

During transactions, employees help customers complete their transactions, guiding them step-by-step as required. Rather than entering information into a database, employees use scanners to enter data automatically.

The successful introduction of these reforms was made possible by ICT. The Resona Group, like the former Resona Bank Holding Company, is composed of three banks: Resona Bank, Saitama Resona Bank, and Kinki Osaka Bank. Mr. Shiratori said, "Normally, each bank would probably have had its own systems. However, we decided to create a single system and divide up resources logically. The benefits of this system include eliminating constraints on transactions between banks, and the ability to provide new services quickly. For example, these reforms now allow the banks to perform group transactions 24 hours a day, 365 days a year."

What makes the system unique is that each terminal is linked to a central communications hub. In most banks, employees interact directly with the accounting system for all processes. At Resona, employees collaborate via a communications hub.

He continued, "We created an easy, flexible, and extensible system around the communications hub to reduce customer wait times. By shortening the time required for subsequent processing, we can now keep teller windows open until 5 PM. Here we use Fujitsu servers (which never have had unplanned downtime) to reduce the administrative burden on branches and improve customer convenience."
In closing his presentation, Mr. Shiratori commented, "After the collapse of the Japan's economy in the late 1990s, the bank was able to recover by borrowing public funds. These reforms are one way we can thank our customers who have given us their support."

Summary

These special presentations by our customers show that everyone understands that there are many ways ICT can be used to achieve our business goals. The future that Fujitsu and its customers envision cannot be achieved by a single company acting alone. Using ICT to achieve co-creation is vital for accelerating innovation, and these special presentations have brought home this reality.