Message from the Chief DX Officer

Advancing DX to continue providing the best value

The Benesse Group is advancing its digital transformation (DX) as one of the key measures in its medium-term management plan. The ultimate goal of this DX is to "continue being a company that can always provide customers with the best products and services."
New services that utilize cutting-edge technologies are being launched one after another and a succession of new players are entering the market. If we are to remain as the best within this environment, we need to raise our ability to respond swiftly to the needs of customers. Digital technology is one way of achieving this and we think that we can continue providing the best value by combining the Group’s customer base and our operational resources, such as knowledge and expertise in the education and nursing care fields, with new functions and business models that utilize digital technologies.
Based on this approach, we established the Digital Innovation Partners (DIP) in April 2021 as an organization that intersects with all of the Group’s business divisions. Initially, the DIP was a virtual organization comprising systems developers, data scientists, personnel in charge of human resources development, and others from Benesse Holdings and Group companies, but in fiscal 2022, it was converted into an actual physical organization. The DIP will reorganize and strengthen organizational functions related to IT and digital technology in each business division in order to further accelerate the Group-wide advancement of DX.

Focusing on the digitalization of products and services and cultivation of DX human resources

The Benesse Group is engaged in a wide range of businesses and each business has different customers, business models, and competitive environments. It is important that DX is advanced using strategies that are matched to the unique characteristics of each business and service, as well as its current level of digitalization. Furthermore, the training of personnel and construction of systems infrastructure that are essential for DX need to be addressed as shared issues for the entire Group. Therefore, the DIP has been implementing specific measures under the two themes of "DX promotion according to the business phase of digitalization" and "improving the organization’s overall DX capabilities."
For example, in fiscal 2021, more than 20 projects were launched based on the business plans of each Group company and each of these projects has been making smooth progress through close coordination between personnel from the relevant business division and personnel from the DIP. Also, as a measure to strengthen DX human resources, we carried out an assessment based on new definitions of DX-related work content and skills, and then set up 25 different training programs (for a total of 56 sessions) based on the result. To date, almost 3,000 employees have taken this training. Furthermore, there is a growing number of cases where DX has facilitated coordination between Group businesses, such as the use of skill analysis and training programs designed for sales personnel in the school & teacher support business to develop staff in the nursing care business.

An increase in the number of mid-career job applicants following greater recognition of our efforts as a DX pioneer

In fiscal 2021, the Group received an unprecedented amount of external recognition related to its DX initiatives. Benesse Holdings was selected for the DX Stocks list due to its overall DX efforts, and we also received commendations from external experts, including Japan e-Learning Awards and an Information Technology Award for services and teaching materials provided by the Group that incorporate digital technology, such as the "Learning Pocketbook" support app for parents, "Speaking Quest" English performance tests, and "Mirai Seed" tablet computer learning support software.
This succession of awards provided opportunities for the Group to appear in media articles about DX and in fiscal 2021, the number of mentions in media grew by an impressive 378% compared to the previous fiscal year. Benesse has a rich history in the education industry, but unfortunately this also tends to be accompanied by the image that we are lagging behind in terms of digitalization among people who do not generally use our products and services. However, I think the huge increase in external assessments and media exposure has helped to change this kind of negative impression and raise recognition of the Company as a digital pioneer. It will also have a positive impact on recruitment and actually, in fiscal 2021, the number of applications we received from mid-career DX personnel increased year on year by about 20%.

External recognition of DX initiatives

DIP organizational structure

Leveraging the DIF to further expand Group business through partnerships

When advancing DX, it is important to not only focus on solving immediate challenges but also to draw up a vision of an ideal future and then backcast from that vision to find what needs to be done now. Therefore, we established the Digital Innovation Fund (DIF) in November 2021 to implement this approach.
The DIP has already been carrying out an ongoing "disruption watch," in which it identifies and monitors potential disruptors that may threaten the Group’s business in the future and the technological fields they are likely to target, as part of its analysis of risks and opportunities in each business area. We established the DIF to take these efforts one step further by building partnerships with potential disruptors through co-creation, cooperation, and joint projects. Its scope for investment is a total of ¥5.0 billion over five years and as of July 2022, it has agreed to partnerships with four companies.
The DIF’s core concept is to avoid getting dragged into a battle for survival with future competitors but instead, to vitalize markets and create greater value for society by working together with fellow industry players. Therefore, in addition to financial assets, it also needs to be able to leverage as great an amount as possible of non-financial assets, including our knowledge and expertise, with the goal of supporting the growth of companies it has invested in. Going forward it will continue to explore potential investment partners that are expected to produce synergies with the Group’s businesses, including in the education, lifestyle-related, and nursing care fields, and companies engaged in activities that could lead to the creation of new businesses for the Group.

Partners that have received investment and support through the DIF

Reskilling each employee to enhance the quality, cost, and delivery of products and services

The DIF realizes inorganic growth through investments, while the DIP’s mission is to support organic growth by working together with existing businesses to properly address immediate challenges and advance DX.
The DIP’s activities have clarified that the biggest challenge we are currently facing is a human resources shortage. Awareness of the advantages of using IT and digital technology is rising at each workplace and the number of development projects being launched within the Group is growing, but there is still a shortage of personnel who can implement DX. The rapid increase in development projects also means that this shortage is growing, despite our efforts to increase the number of DX personnel by strengthening mid-career recruitment.
I think the key to overcoming this problem is to reskill current employees. Basically, the advancement of DX is not a task that should be taken on by IT departments alone. We need our employees at each business location to possess knowledge of IT and digital technology, or in other words, to become DX literate, and to adopt a proactive mindset. Even personnel who are not involved in the actual development of systems and apps need to have a minimal understanding of concepts and specialist terms in order to be able to communicate with others both inside and outside the Group. The 25 training programs I mentioned earlier were developed with this in mind. Happily, learning is deeply rooted in Benesse’s culture, and we have a huge number of employees who are highly committed to self-directed learning. We will work to raise the value provided by the products and services of each business by steadily providing each individual with new DX-related skills.

DX training programs