With the spread of faster networks and mobile devices such as smartphones and tablets, digital technology is further evolving and changing industries and society. While IT investments require a strategy to generate new value, “bit Labs” has been newly created in Nomura Research Institute (NRI) to accelerate corporate digital business. We talked to the head Shikazu Ohmoto, NRI Senior Managing Director, about the challenges for companies in digitization and the future vision of bit Labs.

Develop our legacy using the power of digitization and support customers’ business directly

――How is the system development environment changing with the development of new technologies and evolution of digital implementation capabilities in society?

NRI has been carrying out system development and operations from the corporate strategy proposals of various customers for more than 50 years. The key to this development are our large-scale core business systems. Our main missions were the indispensable back-end work to carry out the customer’s business, and converting paperwork to electronic records to improve efficiency.
NRI conceptualizes the IT business as being divided into “Corporate IT (CIT)” and “Business IT (BIT)”. CIT supports improvement of customer’s work efficiency, and specifically refers to the large-scale core business systems. On the other hand, BIT refers to IT that directly supports the customer’s business, such as scale expansion or sales increase, and includes rapidly growing areas such as smartphone app development or FinTech. The field of competition is changing from “efficiency competition” to “business model competition”, and requires strategies to generate new value.

“Agile Development”: Not just a software development methodology, but also a management task

――What is the key to succeed in Business IT that is directly involved with the customer’s business?

“Agile Development”, which increases the agility of the management. However, the phrase Agile Development itself is about 20 years old, and it is not a new technique at all.

Traditional large-scale core systems were basically developed using the Waterfall Model. As the name suggests, just as water flows from upstream to downstream, it is a way of working where each development process steadily proceeds step by step, from definition of requirements to design, manufacturing, and testing. In this method, progress was managed by clearly documenting the results of each process, and thus development took a while.

On the other hand, in agile development, development is carried out by repeatedly implementing and testing frequently. Features are released in stages, user needs are quickly identified, and services to meet those needs are developed rapidly. It has the advantage of being able to carry out this cycle rapidly and get user feedback while quickly recovering the investment.

Agile development is very well-suited to Business IT, but it has some aspects that do not suit Japanese corporate culture, and thus there have been many companies that have tried it and failed. I myself have experienced failure. The reason for this is that the principles of agile development are neither suited to the hierarchy of Japanese companies nor to Japanese culture, which resists uncertainty. However, we feel a sense of urgency that Japan as a whole will be left behind Europe and the United States if we do not embrace agile development. To this end, we actively provide agile development programs for corporate CIOs (Chief Information Officers) and CTOs (Chief Technology Officers), while also providing training on agile development coaching workshops for on-site business leaders and engineers.

It may be that we actually feel the tide of the times precisely because we know all the conventional systems development methods.

Flexible cooperation with external partners

――What is your vision for the future at bit Labs?

In systems that deliver value directly to customers, such as business IT, "Experience" such as UX (User Experience) is important. We are collaborating with external partners who are good at developing applications for companies.
The "bit" of our new bit Labs refers to the "BIT" that represents business IT, as well as the "bit" that is the smallest unit of a computer. "Labs" is a laboratory. Our mission is not limited to R&D, but also to enable human resources and technology to directly support our customers' businesses. In the future, we intend to continuously work on avant-garde initiatives and cooperation with external partners, and, through repeated trial and error, create products that can directly connect to users. I am convinced that this knowledge of bit Labs will throw up people and systems who can contribute to our customers' business support.