Abstracts of Magazine FUJITSU 2008-5 (VOL.59, NO.3)

Special Issue: Consulting

Overview

• FRI Promotes Fujitsu Group's Consulting Services

The Japanese economy is under severe pressure from global competition, and corporations and public organizations in Japan need to sustain their activities. On the other hand, people are demanding a more convenient and secure society. To overcome these big challenges, corporate management and public administrations must transform themselves continuously and steadily, and consulting has become important to support these efforts. Fujitsu is reinforcing and consolidating its consulting activities and strengthening the synergy between its R&D and economic research. In addition, Fujitsu Research Institute (FRI) is playing a major role in the promotion of Fujitsu's Field Innovation concept by contributing to the proposals to the customers and training so-called "Field Innovators" in Fujitsu. This paper introduces the characteristics, functions, and main consulting services of FRI's new grand design.

Methodology

• CONPAM/BT Methodology for Fujitsu Group's Consulting Activities

To realize effective business transformation for our customers, it is necessary to clarify the main problems and create a master plan for business transformation by obtaining internal consensus and creating a cooperative atmosphere, either company-wide or among certain groups or individuals. To assist customers in their business transformations, the Fujitsu Group has developed a standard methodology called CONPAM/BT (CONsulting knowledge, Procedures And Methodology/Business Transformation) and has been aiming at stable delivery of quality services and effective, value-added business transformations for customers. CONPAM/BT is an original methodology that has been supporting consulting activities in the Fujitsu Group for many years. This paper outlines the new enhanced COMPAM/BT, which is based on extensive practical know-how of consulting projects. It also describes the methodology's development background and the significance of its application to customers.

Business Transformation

• Rebuilding Company Culture: Continuous Improvement through Purchasing and Ordering Innovation

The department store of JR Tokai Takashimaya Co., Ltd. is located above Nagoya station and has about 40 million customers a year. The company has strong customer support, maintains a steady sales increase every year, and makes continuous efforts to achieve further growth. One of their most significant measures for growth is the use of Field Innovation to ensure the department store always stocks the high-quality goods that customers demand. This Field Innovation aims at reforming the process for achieving the optimum inventory. Previously, these tasks were performed by business partners, and the company did not even know which products were in especially high demand. After investigating the situation and identifying the problems involved, we changed the awareness of the relevant staff in the field and established a new business flow. In this paper, we investigate JR Tokai Takashimaya's company-wide effort to reform its purchasing and ordering processes. We also describe various aspects of the consulting services we provided to the company.

• Field Innovation at Resona Bank: Next-Generation Branch Office Development

Resona Bank Ltd. has been conducting various managerial activities with the main targets of reducing branch office operation costs and strengthening its sales force. In November 2004, the bank started two pilot branches with a new type of booth called the "Quick Navi" in place of the usual counter. After assessing this new style of business operation, the bank decided to build a next-generation of nationwide branches, all of which would feature the "Quick Navi". Fujitsu Research Institute (FRI) has supported Resona Bank since the beginning of its "Quick Navi" trials and developments in both the quantitative and qualitative phases. This paper investigates the changes in the management processes of Resona Bank as a case of Field Innovation.

• Consulting for Next-Generation Banking System at Planning Stages

Major banks and other large financial institutions in Japan are beginning to plan the construction of a next-generation banking system. At the Fujitsu Research Institute (FRI), we have been providing consulting services for the planning stages of such a system. We consider that the system should enable banks to review the role of IT in their management and quickly change their business models. Furthermore, we draw a sharp contrast between building a next-generation system and simply updating the existing one. A next-generation system is required to achieve consistency between the three standpoints of management, operation, and IT. FRI can offer valuable consulting services for the system because we are familiar with every aspect of these standpoints in financial businesses. This paper outlines the next-generation system being planned and describes the consulting services we are providing.

• Maintenance Service Efforts to Improve Corporate Value: Call Center as Enterprise Control Tower

Japanese manufacturers have recently been changing their thinking about maintenance services. The background of this realignment is that they are 1) reinforcing their value positioning by creating high-value-added maintenance services and 2) expecting their fare-paying services to make a greater contribution to their bottom lines. There are various types of maintenance services, for example, those provided by information centers, repair centers, and field maintenance personnel. However, many companies recognize that interdivisional cooperation is essential for effectively building greater customer satisfaction. This paper gives an overview of Konica Minolta Business Solutions Japan Co., Ltd.'s project to set up a call center and our consultation know-how that was applied to the project. In this project, the client set up a call center as a control tower of customer relationship management in cooperation with various business processes.

• Administrative Management Reform in Local Government

As our society moves toward decentralization, local governments are stepping up initiatives in administrative management reform to promote greater self-sufficiency. The accumulative long-term national and local debts of Japan are expected to continue growing to about 773 trillion yen by the end of fiscal 2007. With Japan's decreasing population and low growth, which preclude the expectation of revenue increases, local governments are putting cost reductions and staff cuts high on their agendas. However, despite increasing administrative demands, local governments are not making drastic reforms. This is because of the conflicting interests of stakeholders, noncompetitive environment of public services, and residents' indifference to administrative activity and government's financial condition. Using examples of local government administrative reforms that Fujitsu Research Institute supports, this paper discusses drastic reform in autonomous administrative management from the perspective of reviewing policies and projects for optimal allocation of resources and strengthening governance in administrative activities.

• Consulting Service for Constructing and Inspecting Advanced Methods of Basel II Risk Management

The Revised International Capital Framework, also called Basel II, has been in effect since the end of March 2007. It replaces Basel I (International Convergence of Capital Measurement and Capital Standards), which was agreed on by the Basel Committee in 1988. The Committee recommends the use of advanced methods for measuring risk to improve the accuracy of risk calculation and improve capital efficiency. However, banks must construct these measurement methods themselves using extensive probability and statistics and show the supervisory authorities reliable evidence that the methods are valid. This is practicable only for the small number of banks that are sufficiently skilled in advanced risk management. Fujitsu Research Institute (FRI) therefore provides a consulting service to help clients construct advanced methods of risk management consistent with Basel II and inspect the methods so they can show their validity. This paper introduces this service and describes some example cases of its use.

• Application of Service Innovation to System Operation Services

There is a pressing need to increase the productivity of Japan's service industry, which is the nation's largest. To achieve this goal, it is necessary to quantify the value of services to customers by using methods employed in manufacturing industries and also improve the processes by which services are provided. This paper describes a system for offering quality services that match the needs of customers and increasing the performance and profitability of system operation services. This system combines a method for statistically predicting the quality of system operation services from data based on our consulting experiences and a method for measuring a service's value to customers based on SERVQUAL, which is the standard method for measuring service quality.

• Optimization of Transportation Channels Based on Mathematical Models for Reducing Environmental Burden and Distribution Costs

In recent years, to implement the Kyoto Protocol it has become essential for companies to tackle environmental issues. Furthermore, enforcement of "The Revised Law Concerning the Rational Use of Energy" has made reductions in carbon dioxide emissions necessary in the transportation sector. The optimization of transportation channels is a conceivable measure for responding to this situation. However, companies cannot ignore costs, and therefore both environmental and financial issues must be considered when optimizing transportation channels. This paper presents an example of how the international transportation channels for apparel products from production bases in China to Japanese domestic retailers were optimized in the Apparel Green Distribution project that we established with Sumikin Bussan Corporation. Then, it introduces a system that can calculate the most effective international transport channels based on mathematical models.

• Introduction of XBRL Consulting Service

XBRL (eXtensible Business Reporting Language) is a revolutionary new computer language being promoted for adoption in the public sector to improve the transparency and reliability of corporate disclosures in the world's capital markets. It is rapidly becoming the hottest topic among management in the private sector. Although it is very hard to achieve, the most significant requirement for a successful XBRL project is to develop a high-quality taxonomy (XBRL-based dictionary) that suits accounting standards, regulatory mandates, and common practices. Fujitsu Research Institute developed and is improving its own methodology and techniques for taxonomy development based on its extensive experience of practical taxonomy development projects. In this paper, we outline our taxonomy development methodology and techniques using one of the world's most advanced projects, the TDnet taxonomy development project for the Tokyo Stock Exchange, as an example. We then discuss the adoption of XBRL in enterprises.

• Management Innovation from IT Management Perspective: IT Management Diagnostic Services

Nowadays, many successful companies are developing their core businesses by continuously re-engineering their core business processes and standardizing their non-core business processes using IT. The IT departments of these companies should play an important role when management takes an innovative step to achieve a company-wide improvement. Many IT department managers are discussing how IT can contribute to these improvements by clarifying their own IT service capabilities and issues. Through its IT Management Diagnostic service, Fujitsu Research Institute (FRI) has been providing useful hints to IT managers. This paper outlines our operation of this service for several leading medium-sized enterprises in the manufacturing and retail industries.

Enterprises Risk Management

• Business Continuity Management in Manufacturing Industries

Business Continuity Management (BCM) is a management approach for continuing a company's critical business in the event of unexpected incidents such as earthquakes, pandemic flu, and accidents. BCM arrangements are frequently included these days as important terms and conditions of business, and a new ISO standard relating to BCM is expected in 2009. Companies now have the new business challenge of making BCM arrangements, not only for themselves but also for their supply chains. This is especially true in manufacturing industries, which have global suppliers and clients. Fujitsu Research Institute has developed a BCM methodology acquired from internal Fujitsu projects covering Business Continuity Plan (BCP) development and BCM operation and also external projects of various industries. In this paper, we introduce our practical BCM methodology and an approach to enhancing the resilience of supply chain networks. We also discuss approaches for effective promotion of BCM.

• New Approach to IT Service Continuity

An increasing number of enterprises are strengthening their protection against diverse risks such as earthquakes and terrorism by implementing Business Continuity Management (BCM). Stimulated by BCM, IT departments are being asked to enhance the continuity of the IT services used by executives and business departments, which have become indispensable for many business operations. This paper describes Fujitsu's new approach to IT service continuity enhancement, which is based on our latest practices. In addition, we discuss the possibility of IT-related resource optimization through IT service continuity enhancement activities.

• Fujitsu's Approach to Successful SOX Compliance Project for Global Company

Many countries have recently enacted legislation governing accounting practices, compliance, and risk management. This paper discusses the intrinsic significance of enhancing internal controls and the distinctive challenges facing a global project, then introduces the Mitsui global SOX project supported by the Fujitsu Group since 2005 in order to clarify the critical factors necessary for a global internal controls project to succeed. The paper also describes our methodology in rolling out a global project and our approach to ensuring the highest level of professionalism among our consultants. It also examines our use of systemized knowledge about internal controls throughout the project and how we collaborate globally among Fujitsu Group companies (in the US, EU, and Australia). Fujitsu's experience will thus provide a thought-provoking case study for companies currently proceeding with so-called J-SOX.

• Potential of Company-Wide Visualization —J-SOX Project of CHUBU Electric Power Co.—

The internal control report system will be implemented for all public limited companies in the fiscal year beginning April 1, 2008. In order to adjust to the system, CHUBU Electric Power Co., Inc. initially rearranged its complexly intertwined business processes company-wide from the standpoint of financial reporting and consequently clarified the scope of assessment in the system. The company also promoted the visualization of business processes company-wide in line with the same rules. This paper describes the challenges in implementing the J-SOX project and discusses the know-how offered by Fujitsu Research Institute. It also illustrates the potential of company-wide visualization, along with evaluations by CHUBU Electric Power Co., Inc.

Contribution to Industry and Society

• Town Development of Akihabara through Traffic Renovation

The "Akihabara Electronics District TDM Feasibility Study" was conducted under direction of the Ministry of Land, Infrastructure and Transport from 2003 to 2005 in the Akihabara electronics district. This study involved many people and included seven separate feasibility studies undertaken to examine the distribution efficiency and the traffic safety of visitors to this area. Chiyoda Ward, the municipal government responsible for the Akihabara district, was initially the main entity involved in this study, specifically to reduce the number of vehicles stopping and parking illegally on the streets by making more effective use of parking lots. In 2005, a parking lot guidance system was developed as part of the "Advanced Parking Lot Information System Study (conducted by Chiyoda Ward for the Akihabara district)" to materialize the results of the study to date. Fujitsu Research Institute was commissioned to participate in the study in order to better understand the status quo through discussions to solve the traffic issue by introducing a parking lot guidance method, and served as a coordinator among the parties concerned to help put the plan discussed into practice. This paper describes these studies conducted to contribute to the town development of the Akihabara district from the perspective of traffic renovation.

• System Standardization for Innovating Distribution Industry

A great deal of public attention is being focused on the first large-scale revision of system standards in the distribution industry in 27 years. A project involving more than 100 companies is currently underway to establish next-generation system standards. Cooperation in the distribution industry is necessary to satisfy consumer needs, and system standards represent an indispensable component of that cooperation. The widespread use of system standards not only reduces a company's cost but also offers the potential of helping the distribution industry to progress to the next stage. This paper introduces the project from our position of supporting it, and describes the future evolutionary direction of standardization in the distribution industry.

• Diversified Concept of Healthcare —Healthcare Offering Solutions to Life's Problems—

Given the problems regarding the control of medical treatment and rising nursing costs, local governments are strengthening the healthcare function. Healthcare is expected to function as a field capable of solving problems regarding the mental, physical, and social aspects of people's lives, as evidenced by its expanded scope of coverage in recent years. To cite an example, one city strengthened its healthcare function by constructing a healthcare center in an attempt to use healthcare to address problems facing the handicapped and problems posed by domestic violence, as well as encouraging greater social participation for improving the overall quality of citizens' lives. This paper introduces a diversified concept of healthcare and the relevant consulting services provided by Fujitsu Research Institute.

Global Consulting Activities

• Consulting Services Provided by Fujitsu Services Ltd.

Fujitsu Research Institute (FRI) is reinforcing the global collaboration of Fujitsu Group companies outside of Japan. In April 2007, this activity was triggered by a consolidation of the Group's consulting functions through the integration of FRI and Fujitsu Limited's consulting group. Fujitsu Services Ltd. (FS), which is headquartered in London, UK, is a 100% subsidiary of Fujitsu Limited and an important player in Fujitsu's global operations. FS has been achieving good results in recent years, and we believe that its consulting activities are important factors in this success. In this paper, we look at the European IT market trends, describe some of the consulting services that FS provides, and introduce some of FS's customer examples.

• Fujitsu Consulting —Evolving to Meet Needs of Businesses

Fujitsu Consulting (FC: formerly DMR Consulting), whose main market is North America, has been enhancing its capability to provide service beyond its business territory. FRI and FC have closely cooperated in supporting Japanese companies who deal with the U.S. Sarbanes-Oxley (SOX) Act and achieved significant results. This paper describes the consulting services provided by FC, cites examples of its services being introduced to customers and describes IT trends in the U.S. It also introduces the recent expansion of FC's service capability though strategic M&A, as well as relevant activities.

Economic Research Center

• Roles of Economic Research Center

The Economic Research Center of Fujitsu Research Institute (FRI), which has 36 economists, is engaged in research of a wide range of socio-economic issues, including macro and micro economies, international trade, investment, technology, and innovation. The results of these activities are published through research reports, conferences that are open to the general public, and often newspapers and business magazines. In addition, the center conducts a large amount of research for Japanese government agencies. The knowledge and expertise of the Economic Research Center underpins the high-quality services that are provided by the consulting departments of FRI. This paper explains the roles of the Economic Research Center.

Field Innovation

• Field Innovation

As our dependency on IT increases, we understand its inner workings less and less. Therefore, the IT industry should make its products and services less IT-centric and more people-centric. Although IT has become indispensable and its performance and functions more advanced, the task of maximizing its value is getting harder. Also, the management environment is drastically changing and companies cannot keep up simply by using improvised BPR. Companies need to establish a healthy constitution that promotes inner innovation, and to help them achieve this we have developed the concept of Field Innovation. This concept is based on the observation that people who clearly recognize the facts of a problem in a business process more actively bring about the innovation needed to solve the problem. Using people in the field, the most appropriate IT can be adapted to the business process to harmonize people, the process, and IT. Eventually, the enterprise can become continuously innovative. This paper outlines the background of Field Innovation and how it is conducted.