Despite a shortening runway to start and execute their digital transformation, few local Japanese firms launched transformation initiatives in 2021. Worse, they are increasingly reluctant to do so. They seem to be held back by a lack of available tech skills and budget. Japanese multinational firms are making progress, though, in spite of increasing difficulties related to technology strategy. Comparing the results of our 2021 and 2020 surveys reveals that:

  • Local Japanese firms are shying away from digital transformation. Just 39% of the services decision-makers we surveyed in Japan in 2021 say their firm is actively engaged in digital transformation — the same as in 2020. But there is a huge gap by organization type. Sixty-one percent of respondents at Japan-based multinationals say their firm is actively transforming, but just 32% at local Japanese firms say the same. In 2020, 21% of all respondents said their firm planned to start its transformation in the following 12 months, but that dropped to 16% in 2021. Those 2021 planners most often mention lack of tech skills or knowledge, data issues, security, and employee availability as challenges.
  • One-quarter of firms continue to hold off digital transformation; 9% shun it completely. Firms interested in digital transformation but with no immediate plans to start it consistently make up one-quarter of respondents. This is significantly higher than in other countries surveyed. A full 9% of respondents say their firm is not interested in digital transformation at all — compared with just 2% in Malaysia and 1% in Indonesia.


For 2022, Japanese Firms Are Prioritizing Business Growth And Better Products

Japanese firms are largely maintaining their 2021 business priorities around business growth and product improvements for 2022. But doubt remains whether firms will be able to achieve their priority of accelerating the shift to digital. Japanese firms have clearly hit a wall with their past approaches to digital transformation: They must reevaluate their technology strategy and how they tackle challenges.

Forrester clients can read more details about the state of digital transformation in Japan and why Japanese firms should adopt a future fit technology strategy to make their business more adaptive, creative, and resilient in the report: The State Of Digital Transformation In Japan, 2021.


Please connect with me on LinkedIn!

If you’d like to discuss how this affects you and your organization, please don’t hesitate to schedule an inquiry call with me.