Many encounters in the module

In this module, we have a lot of chances to meet with various technology. In class, we use the map app for the presentation of a smart city. And I could know the various digital technology from other student’s blogs and how other people use the current technology in a foreign country. Before the interaction with them, I don’t know how to use the technology by own country, Japan. I feel many Japanese around me are apt to avoid new technology because they would be comfortable to maintain current life and situation. As a result, they continue to use the same technology. However, I know, for example, that Chinese students usually use the cash-less system in their country and other foreign students also use the progressive App in their lives without hesitation

Importance of the trying of new information technology

By the experience in the module, I found the possibility of the technology. Even if in a developing country, they can change their future by technology such as connection to the Internet. It could expand a chance to develop their life. On the other hand, the technology could cause an unexpected problem such as tax avoidance, the privacy of individuals. We also need to think about these measures for the problem with the technology.  

Interact with other users

Also, I have a lot of chances to receive some opinions from other students. All of the opinion has inspired me because I can get other perspectives that I cannot obtain by myself. And also, I could see some opinions that opposite to my thinking in the Future Learn. I have a similar situation in my work, to be honest, I felt it very noisy because it disrupts me to do my current job. However, I can find that the voice from another person is really helpful to promote my thinking and work. Now, I will be able to have different perspectives developed by other opinions. 

Future

After graduate, I will return to my job, government official in Japan. The job needs to listen to the opinion of many stakeholders and colleagues. I proud of the experience in the module of the Digital Business Models and want to tackle a new job with the experiences.

Movie about reflection of the module

https://biteable.com/watch/mobile-app-in-depth-explainer-copy-2502684

References

Travis J. Cote and Brett Milliner. 2017. Preparing Japanese students’ digital literacy for study abroad: Is more training needed?. The JALT CALL Journal 2017; Regular Papers. Retrieved from https://files.eric.ed.gov/fulltext/EJ1165165.pdf

Fajar Widiarto’s Blog

https://fajarwidiarto1986.wixsite.com/fajarwidiarto/post/gojek-breakthrough-for-the-indonesia-society

Rifqi Kusuma’s Blog (2020)

Dynamic Role of Tax Auditor

Shine Fotedar’s Blog_1

https://sf4838.wixsite.com/website/post/a-blank-page-how-to-make-the-most-of-white-space

Shine Fotedar’s Blog_2

https://sf4838.wixsite.com/website/post/amazon-inc

Current Problem of the Manufacturers in the Japanese Market

In the digital era, many manufacturers could face the problem that ordinary consumers don’t buy the products because most consumers can measure the benefit from the product by digital tools that enable them to search the cheapest price on specific products and can obtain the rating by other customers. If a company launched innovation firstly, other company can follow their innovation and they could make it cheaper and finally the innovation will be a commodity. Therefore, the digital network empowered the customers to compare with other products. As a result, one top effective producer will become leading or only one winner. 

For example, at the Japanese mobile phone market, Japanese makers lose to Apple that created the iPhone. Why Japanese phone manufacturers lose? They have high technology in specific fields. According to the article (Laugesen et el, 2010) explains that Apple seeks to the fulfilling customer demand rather than the specification such as cool design and good interface. On the other hand, Japanese traditional makers concentrate on developing their conventional strong technology that is not often demanded by customers. For example, If the engineer thinks they can develop the performance of a phone camera, the user cannot find the difference with the former one. As a result, the iPhone user in japan remains over 50 % in 2018(Canalys, 2019).

Breakthrough by MUJI

According to Joph (2010), a customer could be an innovator rather than a manufacturer. In many cases, the customers use a product for a long time than a manufacturer because they buy the product by paying money and it means they want to use the product. Therefore, they can find many further problems with the product than producers.

In the above situation in Japan, Muji, a Japanese manufacturer of consumer goods has increased its sales by interacting with its customers. According to Fuchs and Schreier (2010), Muji enhances their ability to develop products by communicating with customers online.

In fact, Muji established the following five corporate codes of conduct (MUJI, 2019).

1. Quickly and carefully respond to customer needs
2. Think and act globally
3. Prosper together with local communities
4. Act sincerely and honesty
5. Be open to communication with all

The first code is most important in this context. In fact, Muji established MUJI Laboratory for Living in 2009. For example, the Lobo set the IDEA PARK online that is an internet portal site run by the Muji Laboratory. Through online communication with customers, Muji can gather the opinion, request from users of the product and implement a questionnaire about the topic submitted by the Muji marketing team, and they open the result to the public and implement other discussions. In fact, this feedback will be important resources for new products or the improvement of current products.For example, in this portal site, there are two main places to interact with customers, “Project” and “Request”.

Project

The project is that MUJI Laboratory sets some theme and carry out a questionnaire for their users and create improved products. For example, socks improvements;

YouTube: Good Fit Right Angle Socks by Muji

In this project, firstly, Muji finds that a Czech grandmother’s hand-knit socks is very comfortable because of knitting at 90-degree. On the other hand, most ordinary socks are knit at 120-degree. Muji wanted to create additional comfortable socks by the difference of 30-degree. After that, Muji search for a factory and the socks had come true. According to the factory staff, though other brands simply decide their plan by trying of limited staff, Muji concentrated on many resources to the socks and carry out many research and interview with their users.

Request

On the other hand, Muji users can request Muji to amend some products and to produce new products that they want to use. On the chat space of the portal site, users can post their comments and staff of Muji marketing division will respond to the comment that they understand customer’s comments or that they have already fixed it. The customer sometimes get advice from other Muji users in the portal site. 

How can we evaluate the circulate strategy by Muji?

Muji’s digital communication seems suitable for the Japanese market. Thought, by digital technology, social communication tools, many companies set social communication place, how many companies could implement effectively? In my opinion, Muji is one of the successful companies in digital communication. They succeed to make circle relationships with the customer.

The strategy may seem not surprising strategy today, however, it is required to prepare for response by the customers. If other companies want to imitate Muji’s strategy, they have to arrange not only the communication with the customer but also coordination among their organization, communication cost, and supplier, for the quick response.

However, this system is built in the Japanese market mainly. While Muji had already expanded its business overseas, they cannot set these communication places in foreign countries. The reason could seem like a cultural difference. If a foreign customer push request, the Japanese headquarter could not understand the reason or usefulness. The treatment of the foreign market is the next issue.

References

J. Laugesen and Y. Yuan, (2010). What factors contributed to the success of Apple’s iPhone?. 2010 Ninth International Conference on Mobile Business and 2010 Ninth Global Mobility Roundtable. Retrieved from https://ieeexplore.ieee.org/document/5494782

M, Bogers and A, Afuah and B, Bastian. (2010). Users as Innovators: A Review, Critique, and Future Research Directions. Journal of Management Vol. 36 No. 4, July 2010 857-875. Retrieved from https://journals.sagepub.com/doi/pdf/10.1177/0149206309353944

Canalys. (2019). Apple dominates in Japan with 56% share as market falls 3.8% in Q4 2018. Retrieved from https://www.canalys.com/static/press_release/2019/pr20190219Japan-smartphone-market-Q42018.pdf

MUJI. (2019). Annual Report March 1, 2018-February 28, 2019. Retrieved from https://ssl4.eir-parts.net/doc/7453/ir_material_for_fiscal_ym9/71219/00.pdf

Muji. (2019). Improving our products with customer feedback. Retrieved from https://ryohin-keikaku.jp/eng/csr/list/list_044.html

Interbrand. Interview with MUJI’s Chairman & Representative Director. Retrieved from https://www.interbrand.com/views/interview-with-mujis-chairman-representative-director/

Christoph Fuchs and Martin Schreier. (2010). Customer Empowerment in New Product Development. The journal of Product Innovation Management.2011;28:17–32. https://onlinelibrary.wiley.com/doi/epdf/10.1111/j.1540-5885.2010.00778.x

A future of Accounting Professionals

Accounting professionals will be suffered from the influence of artificial intelligence (AI). According to Osborne (2013), the ranking of probability on the occupation of accounting professionals, including auditor, tax professional, bookkeeper, accounting or auditing clerks, shows the high possibility of computation. Osborne stated that these works seem to be replaced by AI in the future. The reason is that these jobs contain many routine jobs that could be replaced by AI.

For instance, the auditor work is that they firstly survey a random sample of all transactions and check the validity of one. It could be replaced by AI because the AI can investigate more samples correctly than humans. On the other hand, the auditor needs to do un-routine work, such as consulting with their clients concerning more difficult matters that AI cannot decide.

Shifting to the AI audit in the Big Four accounting firms

According to Vishal Chawla (2020), the audit service of the Big Four accounting firms, PWC, EY, Deloitte and KPMG, is affected by AI. However, the Big Four are also investing significant money to develop AI technology due to applying the AI for their audit or other services(Michael, 2020). Though this technology could have the possibility of replacing their job, why the Big Four is shifting to the AI?

(EY. 2018) “How artificial intelligence will transform the audit”

The YouTube video shows how EY promotes automation on audit service. It could be said that they intend to shift resources from routine audit to other works requiring decision making by a human.

According to Deloitte (2018), they also try to improve the efficiency of their audit process.When the auditor decides the risk strategy, the AI tool also checks the risk of the client by the past huge database of Deloitte. If the industry is different, the AI can find a similar case in any otherindustry and the auditor can confirm the doubt. It is like a “second opinion” with auditor. However, it is only based on past data. Deloitte state that in the future they want to make AI predict future risks by using someeconomic circumstances like Brexit.

Increasing needs for AI audit

Today, globalization accelerates the overseas expansion of the business and it is probable that the M&A with foreign companies has consequently increased. After the M&A, the headquarter often cannot acquire enough profit because it is difficult to manage overseas subsidiaries perfectly.

For example, in 2015, Toshiba, a Japanese famous electrical and electronic manufacture company made an overstated financial statement because they need to hide their significant losses happen at overseas companies that they cannot manage enough(BBC, 2015). Needless to say, the company has audited by accounting firm every accounting year. However, it is said that the accounting firm cannot point out Toshiba’s error because the existence of Toshiba is very big for them and they want to continue the relationship with Toshiba as a good customer.

In 2017, it appeared that Fuji Xerox, a Japanese large printer company, had made wrong consolidated financial reporting (Steven, 2017). It is because though the foreign subsidiary merged by the parent company made an overestimated financial report for several years, the parent company cannot comprehend the losses and publishedan overestimated financial statement. In other words, the parent company and their auditor cannot find this accounting error.

In each case, if they used the AI for their audit and hadtheir discipline to point outthe error, they could find and defend these accounting mistakes.

The future auditor

By the appearance of AI, we can solve a more difficult problem than ever before. For auditors, they will need to collaborate with professionals of other fields such as data scientists and other computer scientists to develop the quality of their audit services by AI. At the same time, they also need to continue learning something outside of own fields. In the team working, auditors have to play a role as a leaderwho givesan order to other professionals and need to say their opinion to their clients about some transactions from a systematic perspective.

On the other hand, there is the following problem. For accountants, by the appearance of AI, though elder accountants ordinarily have enhanced their ability in practice by doing their works including routine works, how new generation can enhance their ability like elder generation without routine work? Some knowledge required in the job is not just the same as the elder generation, however, the basic skills as an auditor could have seemed the same. As a result, it is required to establish a new training mechanism to obtain enough ability. If they overcome this difficulty, they can realize the fantastic audit service with AI technology.

References

Carl Benedikt Frey and Michael A. Osborne. (2013). The future of employment: How susceptible are jobs to computerisation?. Retrieved February 12, 2020 from https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

Michael Kapoor. (2020, January 2). Big Four Invest Billions in Tech, Reshaping Their Identities. Bloomberg Tax. Retrieved February 13, 2020 from https://news.bloombergtax.com/financial-accounting/big-four-invest-billions-in-tech-reshaping-their-identities

Vishal Chawla. (2020, January). WHY THE BIG FOUR AUDIT FIRMS PWC, EY, DELOITTE & KPMG ARE INVESTING HEAVILY IN AI. Retrieved February 12, 2020 from https://analyticsindiamag.com/why-the-big-four-audit-firms-pwc-ey-deloitte-kpmg-are-investing-heavily-in-artificial-intelligenc/

Deloitte. (2018). 16 Artificial Intelligence projects from Deloitte Practical cases of applied AI. Retrieved February 12, 2020 from https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/innovatie/deloitte-nl-innovatie-artificial-intelligence-16-practical-cases.pdf

EY. (2018). How artificial intelligence will transform the audit. Retrieved February 12, 2020 from https://www.ey.com/en_gl/assurance/how-artificial-intelligence-will-transform-the-audit

EY. (2018, August 2). How artificial intelligence will transform the audit. Retrieved from https://www.youtube.com/watch?v=58suyR5E6fI&t=18s

PWC. (2019). Harnessing AI to pioneer new approaches to the audit. Retrieved February 12, 2020 from https://www.pwc.com/gx/en/about/stories-from-across-the-world/harnessing-ai-to-pioneer-new-approaches-to-the-audit.html

KPMG. (2018). Auditing with Artificial Intelligence. Retrieved February 12, 2020 from https://home.kpmg/uk/en/home/insights/2018/06/auditing-with-artificial-intelligence.html

BBC. (2015, July 21) Chief executive resigns over scandal. Retrieved from https://www.bbc.co.uk/news/business-33605638

Steven Kiernan. (2017, August 7). False accounting and fictitious sales at Fuji Xerox Australia, NZ. CRN. Retrieved from https://www.crn.com.au/news/false-accounting-and-fictitious-sales-at-fuji-xerox-australia-nz-470035

I am Masato Mukai, from Japan and I am a student of MSc Accounting and Taxation at University of Exeter Business School. In this blog, I will post my study about the Digital Business Models modules and want to interact with other students to improve the recognition for digital economy. If you have questions, don’t hesitate to contact me.

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