Japanese Firms Are Losing Their Appetite For Digital Transformation.

Despite having a short runway to start and implement their digital transformation, several local Japanese companies have launched conversion initiatives in 2021. Worse, they are increasingly reluctant to do so They seem to be lagging behind due to lack of available technical skills and budget. Although Japanese multinationals are improving. Despite the growing difficulty of technology strategy. A comparison of our 2021 and 2020 survey results shows that:

  • Local Japanese companies are moving away from digital transformation. In 2021, only 39% of service decision makers surveyed in Japan said that their firm is actively engaged in digital transformation – as in 2020. But there is a huge gap in the type of organization. 61% of respondents to Japan-based multinationals say their firm is actively converting, but only 32% of local Japanese companies say the same thing. In 2020, 21% of all respondents said their firm plans to start converting it within the next 12 months, but in 2021 it dropped to 16%. Those 2021 planners often lack technical skills or knowledge, data issues, security, and staff availability as challenges.
  • One-fourth of organizations are shutting down digital transformation; Abandon 9% altogether. Companies interested in digital transformation, however, make up a quarter of respondents without any plans to start immediately. This is significantly higher than in other countries surveyed. A total of 9% of respondents said that their organization is not interested in digital transformation at all – compared to only 2% in Malaysia and 1% in Indonesia.

For 2022, Japanese companies are prioritizing business growth and better products.

Japanese companies are basically keeping their 2021 business priorities in the vicinity of business growth and product improvement for 2022. But it is doubtful whether companies will be able to achieve their priority of accelerating digital migration. Japanese companies have clearly hit a wall with their past approach to digital transformation: they must re-evaluate their technology strategy and how they will meet the challenges.

Forrester clients can read more about the state of digital transformation in Japan and why Japanese companies should adopt a future-fit technology strategy to make their businesses more adaptable, creative and resilient, reports: Digital Transformation State in Japan.

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