Analytics Consulting 101 in Japan

Analytics consulting is no stranger in Japan’s market. Whether it is business or marketing analytics, there is no doubt that working with consulting firms brings optimal results in growing your business. For foreign companies looking to expand to Japan’s market, working with large multinational consulting firms is not always an affordable option. Yet, Japan’s market base is far different from that in other countries. From trust-based business cultures to distinct consumer behavior, understanding the cultural implications and regulation is a crucial factor in processing data that accounts for expanding your brand. With market knowledge and expertise, a Japan-based analytics consulting firm plays an important role in operating business in Japan.  In this article, we will discuss the importance of analytics consulting and how you can identify a good consulting firm for the growth of your business.

Why is analytics consulting particularly important for businesses operating in Japan?

Japan’s market has been growing competitively. In addition to the local companies’ productivity, international companies are competing to make smart choices to grow their presence in Japan. One of the most common obstacles faced by foreign companies in doing so lies in the complex tradition of business in Japan and the cultural differences between Japan and the West. Because of this, businesses struggle to gain valuable insight due to the lack of data consistency and inaccuracies due to challenged approaches and ineffective strategies. We will unravel in the following section the value of analytics consulting in Japan. 

In-house Team vs Analytics Consultant: Pros and Cons

In the center of analytics consulting is data. Whether it is an in-house analytics team or a professional analytical consulting team, they handle the process of collecting, processing, and analyzing data that is derived from various sources including customer survey and website traffic. More importantly, analytics consultants are responsible to produce actionable insights that are tailored for the brand’s requirements and the market trends. What are the different services analytics consultants can provide in growing your business and is it really better to work with them? 

1. Customer experience: In crafting strategies, analytic consultants are customer-driven, ensuring that users have a better experience navigating websites and developing greater loyalty to your products. In Japan where consumer behavior is vastly unique, a Japan-based analytics consulting firm has the upper hand in providing enhanced experience for Japanese users. 
2. Skills and expertise: While skilled in-house teams are capable of gathering and processing basic data for the company’s growth, foreign companies aiming to unlock their full potential in Japan’s market require more comprehensive, in-depth analytics coupled with fast and accurate decision-making. It is also generally known to be really difficult to put together an in-house team with skilled analysts. This explains the different time needed in producing insights.  
3. Deeper understanding of business values: If you are bringing a team of in-house analysts, one advantageous point is their thorough understanding of the company’s values and long-term goals as well as the familiarity of the decision-making process and structure of the company. This also means you have more control and confidentiality over your data. 

Generally, only large scale companies like Amazon or Google can put together a highly skilled analytics team and still produce valuable insights effectively. In-house analytics teams while maintaining efficiency in generating valuable insights. This is largely due to their substantial investments in advanced technology and data analytics tools, which are not only expensive but also require specialized expertise to operate effectively. Ultimately, deciding whether to use an in-house analytics team or work with a consulting firm comes down to the budget and timeline of your business. While an in-house team offers long-term benefits, analytics consultants can provide faster, more specialized insights that may be crucial for companies expanding into complex markets like Japan. Though, if you are considering to stick with your own analytics team, we suggest you to read our guide to Market Research in Japan for a successful Japan entry strategy.

How can external analytics consulting firms help companies scale their operations in Japan?

As previously discussed, analytics consulting is a process of gathering, analyzing data and producing valuable insights. In working with their clients, analytics consultants are required to take over some authority of business’ internal data, generate automated reports, analyze and identify the growing or hindering factor of the company. In doing so, they allow businesses to focus more on general strategies and have the analytics consultant dealing with the technical configurations. Here are two case studies to highlight how analytic consulting can give a positive impact to companies’ growth. 

Step-by-step of how analytic consultants help grow your business

1. Market and company assessment: In the first step, both the company and analytic consulting firm discuss the brand values, goals and challenges, as well as, the results of market research and the process that will take place during their collaboration. It is important that the consulting firm understand the company’s value and goals first before moving forward with the project. Likewise, it is important for companies to understand the assessment of their market positioning and growth potential which is derived from a research process conducted by the consulting firm. For more details on market research and why market research serves is significant in company’s growth in Japan, listen to Andrew Edsall on our Scaling Japan Podcast.
2. Data collection and organization: Next, analytical consultants work closely to gather relevant information, including customer surveys, finance statements, sales invoices, social media engagements, internal company structure and so on. In this step, analytical consulting firms utilize advanced tools and software, whether for data collection or managing databases. This phase uses tools and platforms like HubSpot, Oracle, Salesforce, etc. Due to the sensitive nature of this data, it is important that companies and analytical consulting firms work with trust and loyalty as these data are private. 
3. Developing insights through data analysis and visualization: After gathering the data, analytical consultants go through a process of investigation to identify customer behavior trends, predicting future marketing demands, or pinpointing inefficiencies in business operations. They do so by applying various statistical techniques, machine learning algorithms and data modeling which eventually produces insights. The complex results of analysis are then converted into easy-to-digest visuals using platforms like Power BI or Tableau. 
4. Strategy creation and implementation: The essence of analytical consulting is this stage of strategy consultation and implementation. Implementing the strategies devised by the analytical consultants, companies can discover the limitations that they may have missed and unlock the true potential of the company, particularly in the nuanced Japanese market. These strategies encompass technical adjustments like website configuration to internal training like employee workshops. In this stage, companies and analytical consulting firms collaborate tightly to ensure changes of system take place through and through. 
5. Monitoring and adjusting: To truly see the results of the strategies, analytical consulting firms need to monitor the progress of change, measured by feasible results and analytical data. Based on this constant process of monitoring, they will adjust the strategies that can best help grow the company.  

Two successful cases of foreign enterprises with external analytics consulting

1. Tata Consultancy Services Japan:  TCS is the first Indian IT service company to operate in Japan. Having successfully entered the market, their consultancy service helped other foreign companies by their expertise, resource and knowledge of the Japanese market or Japanese companies with their global expertise. 
2. Scaling Your Company: From our own consulting services, we have helped a client to grow their business and a strong online presence. Through a holistic analysis of reviewing client contracts, financial evaluation, and active participation in devising strategies for the client’s brand growth. In a span of under 1.5 half years, his business soared over 70%. For more details, check out our case studies

What are the key performance indicators (KPIs) of a successful analytical consultation?

The results of analytical consulting are not an instant solution. The period when you can start seeing significant outcomes will depend on the scale and complexity of the project. However, if monitoring is not done comprehensively, companies may also miss the result of analytics consulting. Monitoring and adjusting is a continuous process in business operation. To measure the return on investment (ROI) from analytics consulting, business owners and teams should keep track of the following metrics; 

1. Revenue growth: One way of measuring the result of analytical consulting is by tracking the increase in sales or revenue over time and identifying its sources. While tracking the general increase in sales could show that the consultation strategies were effective, recognizing the sources of income and aligning it to the strategies can display which sales strategies are most effective and which are not as much. 
2. Customer retention: Higher customer retention rate signals satisfied customers and a loyal customer base. This KPI focuses on the customer-driven analytics which include the retention rate and customer satisfaction scores. Measuring these metrics helps in understanding the specific actions that improved the customer loyalty and satisfaction. 
3. Operational efficiency: While it may be difficult to remain efficient while adjusting to changes of strategies, metrics like project delivery time, resource utilization and product costs contribute to the ROI. Not measuring this KPI can also cause data silos even if revenue growth and customer retention are closely observed. This is why monitoring should be done systematically.

4 Things businesses should look for when hiring an analytics consulting firm in Japan

1. Bilingual capability: Effective communication is critical when hiring an analytics consulting firm in Japan, especially for non-Japanese companies. The firm’s proficiency in both English and Japanese is important not just for smooth communication, but also for handling complex and nuanced data such as brand image, business relations and customer behavior into actionable recommendations. A consulting firm with bilingual capabilities ensures that nothing is lost in translation and that the communication between all stakeholders is clear and efficient.
2. Market expertise and knowledge: Japan’s business environment is unique, shaped by cultural preferences, consumer behaviors, and regulatory requirements. An analytics consulting firm must demonstrate a deep understanding of not only the Japanese market but also the global market, from industry-specific trends to local competitors, in order for the project to go smoothly. 
3. Methods and approach assessment: Before hiring, businesses should assess the consulting firm’s methods and approach to ensure they align with their own values and goals. This includes examining how the firm collects and analyzes data, what tools and technologies they use, and whether their methodologies are flexible enough to be customized to your specific needs.  It is important to determine if the firm follows a data-driven and ethical approach since you will be working closely and handling sensitive internal data.
4. Budget capacity: High-quality analytics services can sometimes come at a premium, but it’s essential to weigh the potential ROI and the long-term value. Businesses should look for firms that offer flexible pricing models, whether on a project basis, retainer, or based on results. Additionally, it is important to ensure that the consulting firm’s services fit within your budget while still offering the quality and depth of insights required to meet your business goals. 

Analytical consulting firms in Japan based on scale

1. Large and international analytical consulting firms:
   1. Deloitte: Deloitte is a global leader in consulting, offering a broad range of services, including strategy, analytics, and digital transformation. They help businesses solve complex problems, improve operational efficiency, and implement data-driven strategies for growth. With bilingual teams and expertise in navigating the Japanese market, Deloitte is well-positioned to assist companies in scaling their operations and staying competitive through innovative solutions and market insights. 
   2. BCG: Boston Consulting Group (BCG) is an A-rank management consulting firm that specializes in strategy and transformation. BCG helps businesses navigate growth challenges, harness technology for digital transformation, and develop long-term strategies for success. Their bilingual teams provide insights tailored to local and global markets.
2. Small and medium bilingual analytical consulting firms:
   1. Scaling Your company: We also offer our very own bilingual consulting services to help business expansion and operational efficiency. By focusing on key areas such as process optimization, enter market strategies to Japanese markets, and data-driven insight, Scaling Your Company helps businesses ensure sustainable growth in the competitive market. 
   2. Akira Consulting Japan: Akira Consulting provides business consulting services tailored for global firms entering the Japanese market, as well as local companies seeking to implement technology solutions. They specialize in market strategy, localization, and business process streamlining, with a focus on bilingual support.
   3. Fidel Technologies: Fidel Technologies offers a wide range of data analytics and consulting services, including sales and marketing analytics, customer sentiment analysis, and HR analytics. They support companies from diverse industries with their bilingual team and expertise in tools like Power BI and Tableau. 

Key takeaways

Analytics consulting helps businesses succeed in Japan’s unique market environment. The cultural nuances, consumer behavior, and complex local business traditions make it essential for companies to leverage the expertise of Japan-based analytics firms. While in-house teams offer a deeper understanding of company values and data control, external consultants provide advanced tools and faster, in-depth insights, which are all important in navigating Japan’s market. Working with analytics consulting firms requires close collaboration during the assessment, data collection and visualization, and particularly during the monitoring process. When selecting an analytics consulting firm, companies should consider bilingual capabilities, local market expertise, methodological flexibility, and budget alignment to ensure successful outcomes.