The Key to DX Promotion Lies in "Talent and Organizational Strategy." How Large Enterprises Can Build DX Teams Without Outsourcing or Hiring (Part 1)

The imperative to advance DX has become widely recognized in today's era. That said, once projects actually reach the implementation phase, many report encountering various difficulties that make smooth progress challenging.

In this article, Kunihiko Bunbun of GNUS Inc. (a company with extensive experience in corporate DX project execution), explains the key 'talent and organizational strategy' for driving DX forward. GNUS, in partnership with the US startup Gigster, has networked a large pool of DX freelancers. Drawing on their experience successfully guiding numerous DX projects by enabling flexible team formation tailored to specific challenges, they will discuss how to build a DX team.

One major factor in DX failure is talent and organization! How can we ensure innovation succeeds?

In today's era dubbed VUCA, many companies are tackling DX and business development. However, we also frequently observe numerous challenges arising during DX implementation.

One such challenge revolves around talent and organization. According to a report by McKinsey & Company, talent and organization rank among the top reasons DX initiatives fail. (※1) Indeed, in our work supporting projects at GNUS Inc., we often sense that the core issues lie more in organizational structure and talent than in the ideas themselves.

This article will delve into the talent and organizational challenges in DX advancement and explore solutions. Drawing on international examples, we will explain the resources and team building necessary for successful DX, along with methods to achieve them.

Two Key Resource Challenges

Talent and organization are critical factors for successful DX. While many companies recognize challenges in these areas, these challenges can be broadly categorized into two main issues: internal resource shortages and how to compensate for those shortages.

Regarding the first challenge—internal resource shortages—it's natural for resources to be lacking unless a company has been actively recruiting DX talent for a long time. The crucial question here is: "What specific resources are lacking?" And how many people are needed? Without clarity on the exact type and quantity of personnel needed, companies cannot effectively address this through internal hiring or outsourcing. This makes defining the required resources the most critical challenge in team building. Therefore, increasing the resolution of this internal resource shortage is a key point.

Once the resolution of resource shortages improves and the required talent becomes clear, the second challenge emerges: how to supplement those resources. Specifically, this means deciding whether to build the team internally or outsource. The timeline is also crucial: do you need a 100-person internal team within a year, or is a 3- to 5-year timeline acceptable? The approach to achieving this will vary significantly depending on the desired timeframe.

The challenges of resource shortages and how to address them when advancing DX. We will explain solutions for these two challenges.

Increasing Resolution on Resource Shortages — Get Hands-On in the Field

First, the solution for resource shortages. The core issue here is often an undefined need for resources. Sometimes, when someone says, "We need someone like this," they might name a super-talented individual who would be incredibly difficult to find anywhere in the world. This lack of a clear, concrete definition of the talent resources that can realistically be recruited is a common sight.

This is understandable when there are no internal candidates and the ideal profile is completely abstract. Another cause is that projects are often outsourced entirely to external vendors, leaving the team unaware of what's actually happening within the project. The lack of internal talent combined with outsourcing creates a black box, preventing the resolution of resource issues.

So, how can you define the necessary talent? It's crucial to actually get into the field and experience it firsthand. To use a sports analogy: if you've never played soccer yourself, you can't understand what makes a good player, let alone who would be easy to play alongside. Similarly, getting into the field (i.e., the project) and seeing how each member moves and contributes is essential for evaluating talent.

Three Types of Direction Personnel

We explained that getting hands-on experience in the field is crucial for identifying missing talent. Here, based on our experience supporting projects, we'd like to share some insights about that "missing talent."

Regarding tech-related personnel, I often believe what's lacking is "direction talent." Direction personnel fall into three types: the "Project Manager" who drives project progress and manages the team, the "Product Manager" responsible for customer satisfaction with the product, and the "Technical Director" handling the technical aspects of the desired service or product. Using a startup analogy, the "Project Manager" takes on a COO-like role, the "Product Manager" is the CEO, and the "Technical Director" is the CTO.

Identifying the right talent for your company — "Shadowing" to refine talent assessment

When increasing the resolution of identifying missing resources, you need to define whether your company requires a Product Manager or a Project Manager, for example (incidentally, Product Managers are overwhelmingly scarce not just in Japan but globally).

However, as mentioned earlier, trying to increase resolution without actually entering the field can be problematic. Sometimes there's no place to play at all, or even if you enter, you might end up with an unrealistic formation. Therefore, it's necessary to understand formations and roles to some extent based on successful models. In the US, they call this "shadowing" – essentially, mimicking other formations to understand what your own team needs.

Here, I'd like to share an example from the US. One of GNUS Inc.'s partner companies, the American startup Gigster, develops customer-facing apps and services that integrate software and hardware. When building these apps, they lacked in-house engineers and faced geographical challenges in hiring. Consequently, they outsourced their team, primarily using freelancers, operating fully remotely. This wasn't a complete hand-off; they created a shadow team with the goal of eventually bringing the work in-house. Although the team was outsourced, rather than leaving them entirely to their own devices, many members became involved in the development process. By engaging in the process, they learned what was happening internally, enabling them to distinguish between tasks that should be handled in-house and those better left outsourced. Ultimately, they internalized the direction function and now operate with a hybrid model, continuously outsourcing freelance members while maintaining this core capability.

This case demonstrates that shadowing an entire team can clarify which parts require in-house development and which should remain outsourced. Rather than a hands-off approach, I believe the perspective of collaborating and thinking together is crucial.

One major factor in DX failure is talent shortage. To solve this, you must first clearly identify what kind of talent your company needs. In Part 2, we will explore how to fill those gaps once the required talent is clearly defined.

※1 McKinsey & Company, "The Essence of the Digital Revolution: A Message to Japanese Leaders" (September 2020)

※This article is based on "GNUS Agile Report: How Large Corporations Can Build DX Teams Without Outsourcing or Hiring" (November 2021), with some additions and revisions.

• The Key to DX Promotion Lies in "Talent and Organizational Strategy": How Large Corporations Can Build DX Teams Without Outsourcing or Hiring (Part 2)