NRI Papers
No. 164 July 1, 2011
  IT When "Generation Y" Becomes the Predominant User Group  
Masayuki FURUKAWA

Given the cost-cutting measures being implemented by enterprises (its customers), Japan's IT (information technology) service industry is finding it difficult to grow. Furthermore, neither the IT department of an enterprise nor its IT subsidiary is able to function effectively, which constricts the growth of the enterprise.

The approaches adopted by enterprises in response to changes in the environment have been shifting from emphasizing cost reduction to placing importance on increasing the top line (sales). Moves are seen among enterprises to promote "responses to diversity" whereby efforts are made to meet the demands of each and every customer.

In any attempt to respond to the diversity of customers, it is thought that information systems that support such endeavors, in particular, application software, will have shorter life cycles. In addition, the behavior of the members of Generation Y (Gen Y) (those born between 1981 and 2000), who are expected to become the principal customers of companies several years from now, is one factor that will influence the information systems of companies.

To develop information systems for the Gen-Y era, a management method must be selected according to life cycles that differ for each information system. For example, quality is essential for the information systems of financial institutions, back office systems generally have long life cycles and front office systems that have closer contact with customers have shorter life cycles.

It is considered that there are two issues that must be overcome to realize information systems for the era where Gen Y becomes the predominant user group. They are "ensuring the presence of development staff members" who have skills to develop information systems in a shorter period and "fostering 'connoisseurs' who can identify useful external services." In order to move towards establishing management strategies and IT strategies that are designed to respond to diversity, it is time for company management to recheck its own information systems and take any necessary actions to prepare for the next several years.

Contents
I Responses of Japanese Companies to Changes in the Environment
II Optimum IT in a Society where Generation Y is the Predominant User Group
III Corporate IT Strategy Designed for the Gen-Y Era

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