#Japan #AI Governance #Niigata #OM Network #XDB

Overcoming Triple Challenges: Labor Shortage, Regulatory Change, and AI in Japan

In the current corporate landscape, many companies in Japan are grappling with severe labor shortages, which have led to a high rate of bankruptcies due to lack of personnel. The situation is compounded by regulatory changes and the imperative to adopt AI governance. In this context, OM Network Inc. (based in Niigata City and led by President Masaya Yamagishi) is embracing these challenges head-on with their internally developed operational system, XDB (Extreme Dimensional Brain).

About the XDB System

OM Network has taken an innovative approach by developing XDB, which serves as a backbone for internal business reforms. This system integrates automation in back-office functions, such as billing and revenue management, together with regulatory compliance and AI governance. By leveraging XDB, the company has reduced billing cycles from four times a month to just two, achieving a 50% reduction. Moreover, manual verification efforts have been cut by up to 80%, and user mistakes linked to data entry have seen a significant decrease thanks to its integration with 'freee', an accounting software.

Addressing the Underlying Issues

The triple threat of labor shortages, compliance complexities, and evolving AI governance mandates a proactive response from companies. With the introduction of the invoice system effective from October 2023 and the obligation to retain electronic transaction data, organizations must swiftly adapt to ensure compliance. Additionally, guidelines on AI governance have further complicated the operational landscape.

OM Network aims to tackle these issues from a pragmatic perspective by fostering collaborations between experienced senior employees and fresh recruits. Together, they developed XDB to seamlessly integrate labor-saving features with regulatory compliance and robust governance measures.

XDB’s Functionality: A High-Dimensional Brain

The XDB platform effectively consolidates disparate data, rules, workflows, and external collaborations across departments. It facilitates crucial tasks like automated billing validations and generates checklists that enhance operational efficiency.

Key Achievements of XDB

• - Billing Frequency: Reduced from 4 times a month to 2 times (50% reduction)
• - Processing Time: Average reduction of 2 hours per billing cycle
• - Verification Workload: Up to 80% reduction
• - Input Errors: Significant decrease due to 'freee' integration

The results indicate a remarkable decrease in the workload for employees, allowing them to maintain high standards of quality while ensuring compliance.

The Timeliness of XDB

The relevance of XDB is underscored by four current supportive factors:
1. Structural Labor Shortages: The simultaneous increase in retirements and difficulties in recruitment necessitates automation and labor-saving measures for continued operations.
2. Regulatory Complexity: New requirements for retaining electronic transaction data demand that companies establish robust and sustainable operational frameworks.
3. Invoice System Compliance: The flexibility of the data structure in response to invoice specifications and future extendibility are critical for business agility.
4. Growing AI Governance: The firm establishment of organizational structures and effective log management as mandated by AI guidelines is imperative.

Development Story: Combining Experience and Innovation

At the heart of XDB’s development is a unique collaboration across generations. Senior employees contribute invaluable insights from their vast experience, while entry-level staff propose innovative ideas unrestrained by convention. This collaborative environment fosters continuous improvement in work efficiency and quality outputs, demonstrating a fusion of seasoned expertise and fresh perspectives.

Future Goals: Data-Driven Management

Looking ahead, OM Network aims to enhance real-time sales management capabilities as the next phase of XDB’s evolution. Plans include visualizing active users of their shift management system, R-Shift, unifying estimates, budgets, and actual performances, and enabling immediate insights into outstanding receivables. This transition focuses on transforming decision-making from intuition-based to data-driven processes, creating a shared language between management and ground-level operations.

About OM Network

OM Network is dedicated to realizing operationally feasible digital transformation (DX) through systems development and operational support. Drawing on experience from the XDB project, they assist various enterprises in addressing challenges like interdepartmental data arrangement, regulatory compliance, and AI governance design. The company envisions extending a sustainable productivity enhancement model from regional initiatives.

Contact Details

For further inquiries regarding this initiative, please reach out to:

OM Network Inc. Solutions Department: Mr. Ishii
Phone: 025-250-5733
Email: [email protected]

Company Overview:

• - Name: OM Network Inc.
• - Location: Niigata City, Niigata Prefecture
• - President: Masaya Yamagishi
• - Business: Development of business systems and shift management system "R-Shift"
• - Website: www.omnetwork.co.jp