Regional Focus: Accenture's View from... Japan
The Accenture 'View From' series of blogs will take us to a different country each month, giving a light but enlightening insight into those markets' characteristics and daily challenges when it comes to implementing mobility across enterprises.
Where to Start?
You probably don't need me to tell you that Japan isn't like other markets when it comes to technology. Many years ago, I spoke with an industry analyst who was about to start looking through the results of a global survey into consumer technology. I asked, "Where do you start with something that big?"
He replied that the first thing he did was look at the Japanese results, marvel at the technology in use every day, and then discount the results as outliers. In his view, Japan was so different to every other market, that no global trends or patterns could be determined from it.
That conversation was well over five years ago now, before smartphones became mainstream around the world and countries began to run 4G high-speed networks. Today, while Japan is still very much a high-tech society, constantly inventing new ways for cutting-edge technologies to be used, we're finding our path is changing.
This is particularly true in the enterprise space. Businesses are beginning to realise the real potential of digital technologies such as mobility and analytics, and industrial manufacturing worldwide is changing thanks to technology enabling and encouraging innovative businesses to offer digital services, alongside their traditional product offerings.
With Smart Feature Phones, Paying for Content is Nothing New
Unlike most countries, where the transition from feature phone to smartphone was a major and relatively instant shift, Japanese mobile phone operators had already paved the way for data connection and apps here, which has shaped how we use our phones today.
Before smartphones came to market, Japan's operators developed their own handsets, and their own platforms to sit on them. For example, NTT DoCoMo launched a proprietary mobile platform for their phones called i-mode. This ecosystem - called 'Galapagos' to reflect its local and original evolution - enabled people to purchase subscriptions to access content and information like weather, news and flight reservation systems via the NTT DoCoMo platform.
With content providers already developing for the operator-owned devices and app stores, when smartphones came along, Japanese people were not in the same hurry to switch handsets as other developed markets. As a result, the market here is currently at about a 50/50 split between smartphones and feature phones, although the trend is certainly moving in the direction of smartphone adoption.
Japan has one of the longest average commuting times in the world, and this is particularly true for those people working in mega cities such as Tokyo, who often spend an hour or more on the train getting to work. In this time, people use their phones - be they feature phone or smartphone - to read their emails, to watch downloaded content, or to play games. In Japan, gaming is one of the most popular activities on mobile devices. Any parent here will tell you that because of the culture that's formed over the last decade where paying for content is the norm, they often have to deal with the big bills associated with their children downloading games for free, but then making in-game purchases without thinking about the cost!
According to the Japanese Ministry of Internal Affairs and Communications, in 2011 the content market for feature phones was worth US $7 billion, with games and music topping the list of types of download. Japan is actually the highest spending nation on apps from both the iOS and Android stores in the world, and the gap between us and the next nearest market, the US, is only going to grow as smartphone penetration continues to increase here. People are moving away from subscriptions for content on their feature phones, and towards one-off app purchases on tablets and smartphones.
One difference between Japan and other markets when it comes to content is a lack of any real desire to stream content - be it movies, music or something else altogether. Culturally, we are a nation of collectors. In Japan, Blu-Ray recorders are in every home, whereas in other countries people watch their favourite TV programmes 'on demand' and then delete them, meaning recording devices for the purposes of keeping content are almost unheard of!
Enterprises Need Updated Governance
Culture is also a big driver for the way we use smartphones in the enterprise, which is to say that they are being adopted, but somewhat cautiously. It's a hot topic of discussion at the moment here. Some of the more aggressive companies, particularly those with sales teams or field-forces, have started to provide smart devices to employees.
There is actually a low barrier for the deployment of mobility in the enterprise because as consumers, people are so familiar with the power it can have. However, neither corporate-liable devices nor BYOD are particularly popular in Japan because, on the whole, we have not created the corporate infrastructure to support them.
Mobility tends to fall under the remit of CIOs, and until they have the corporate governance in place for the use of mobile devices for business purposes, they are unwilling to risk going against existing rules and guidelines.
Accentureã??s Mobility Insights Report 2014 found that 18 percent - the second highest of those countries surveyed - of respondents in Japan said that they had no formal mobility strategy in place, but were working on developing one. This shows that the situation is beginning to change, as the benefits of adopting mobility in the enterprise become clear, but there is still a way to go for most enterprises in terms of ensuring they have a strategy for implementation and use of the technologies.
My work with clients in Japan reflects what the statistics show. We've spent much time over the last year with companies looking at strategy and governance, but are now working more towards the development of enterprise systems that will use mobile - be that mobilising existing enterprise applications, or creating new apps that, for example, will help increase productivity and improve operating models. Analytics is a real growth area here, and for every app that's developed, the data is collected, analysed and used to inform business change.
Traditionally in Japan, we tend to have long design and development phases for IT projects, but there is a growing hunger here to adopt digital tools quickly in order to understand better what's happening within workforces and enterprises, and using the data that's being collected to really make a difference in business operations.
Invention or Innovation?
Japan seems to be at a tipping point in terms of Enterprise Mobility. As we see the global uptake of reliable devices and stable platforms that can be developed with very low-risk, we're starting to see businesses realise that mobility can enable more than just productivity benefits.
The increasing volume of data that can be captured - be that through connected devices and sensors, or through employees with mobile devices collecting and entering data from the store floor or a customer's office - are being recognised as enormously empowering for a business.
What's also being recognised is that with our great heritage of invention and product development in manufacturing, we must also create a heritage of innovation, and of developing services that sit alongside those products. In retail and the entertainment industries, we are already excelling at this - for example seeing a gamer's behaviour and being able to immediately respond with a relevant offer or activity suggestion - but there is room for growth in manufacturing. We are just starting to understand how to use all the data we're collecting in order to think a little differently and transform our businesses.
This is a genuinely exciting time to be working in digital technology in Japan, because I'm talking daily with companies who are realising the potential for transformation that digital technologies offer. This might be to change the way they operate on a day to day basis. For example through the introduction of internal social networks to cut down on email, deploying mobile devices to gather more frequent and accurate field data to enable almost real-time decision making of top management executives, or even for the development of a completely new area of business that is ripe for expansion.
In all cases, there's much potential and drive in Japan to make incredible changes using digital technologies, and to be the country using it in businesses in the same innovative ways we are known for around the world in the consumer space.
This article was written by Masahiko Niwa, Japan Country Lead for Accenture Mobility, part of Accenture Digital for the regional 'view from' series.
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