In July 2020, the authors organized the "DX Communication Study Group" to conduct research to grasp how corporate communication should be reformed as DX, which transforms business models by making full use of digital technology, progresses. The authors realized that DX is a transformation of companies, and at the same time, PR is also expected to make bold changes using digital technology.

DX allows companies to establish a competitive advantage in response to drastic changes in the business environment by utilizing data and digital technology and to transform their products, services, and business models based on the needs of customers and society for "value creation from the customer's point of view". DX innovates organization, business process and corporate culture itself and digitizes cross-organizational and overall operations and manufacturing processes. (Ministry of Economy, Trade and Industry, 2019). Furthermore, the essence of DX is not only the transformation of conventional business, but also the continuous transformation to adapt to environmental changes. This is the direction companies should aim for. (Ministry of Economy, Trade and Industry, 2020). Corporate business models have evolved from a "product-out" approach that primarily pursues the functional benefits of products and services to a "co-creation" approach that aims to solve problems and improve customer experience (referred to as CX). The emergence of customer experience value is becoming active through co-creation strategies in which both customers and companies combine their knowledge and experiences.

On the other hand, DX has caused revolutionary changes in communication as well. As customers, companies, and other stakeholders are constantly connected via digital networks, the information asymmetry between customers and companies has disappeared, and the points of contact and media (communication channels) for mutual communication have diversified. Multifaceted communication is being carried out not only by companies but also by individual employees and influencers by making full use of various digital tools.

In this way, DX enables PR to contribute to the co-creation of corporate value through the transformation of communication. In this paper, we considered the direction of DX that should be tackled in the future and the challenges in promoting it based on the current state of PR, referring to the PR fact-finding survey and case studies.

What is DX for PR?

What kind of impact will these changes have on PR?

In this research, we attempt to define “PR DX” as a transformation of PR utilizing digital technology. The first stage (DX1.0) is considered to aim to improve operational efficiency, and the second stage (DX2.0) aims to improve experience value through value co-creation.

In the first stage, companies will work on digitizing the PR process by individual use of digital tools such as information dissemination using digital contents and digital media such as websites and social media, and PR support tools and social listening services. In the second phase, communities and ecosystems will be formed on an integrated digital platform, and efforts will be made to foster empathy and trust by sharing narrative stories through interactions between stakeholders such as customers, employees, and influencers.

Table 1: PR DX Evolution Stages.

(Source) Created by the author

DX Communication Concept

Philip Kotler (1994) introduced the mutual relationship between customers, companies, and employees in a service-dominant environment as the "service marketing triangle". Using this model as a reference, the "DX Communication Concept" models the value creation mechanism in corporate PR process (Figure 1). 

Figure 1: DX Communication Concept.

(Source) Created by the author

Under this concept, customers, companies, and employees are connected by utilizing digital technology. It shows how to improve the experience value of customers, companies and employees while Deepening mutual communication through external channels (communication between companies and customers that make full use of media mix). 

In internal communication, employees understand the company's core competencies through learning its management philosophy, purpose, and business concept, and improve the centripetal force within the company and increase the employee experience value (EX). In addition, employees who have acquired experience value are expected to engage in dialogue as reliable media with customers and other stakeholders through their respective points of contact.

Next, in interactive communication, employees aim to improve CX, the customer experience value through two-way communication with customers in various functional activities such as customer care activities by employees at customer contact points and customer community activities. Customer contact here is not limited to customer fronts such as sales and services in service marketing, but all corporate activities across the value chain such as research, development, manufacturing, sales, and services. Internal communication plays a major role in attracting customers through these value creation activities.

In addition, External Communication accumulates domain know-how and use cases as stories acquired through customer co-creation activities, promotes them through various media and influencers, and shares them widely through social media and customer communities. In service marketing, the main aim is to focus on employee satisfaction, improve service quality, and increase customer satisfaction. Our focus is to accumulate the empathy and trust that they have acquired through this process as corporate brand value and Corporate Brand Experience (CBX). Under the common philosophy and purpose, content is integrated as a narrative story, and PR activities play a role as part of the value co-creation process, contributing to the sustainable improvement of the corporate value.

Survey Outline

In this research, we conducted a questionnaire survey of PR managers at companies that are members of the Japan Society for Corporate Communication, etc., to investigate how PR are trying to respond to DX and value co-creation, as well as the current situation and challenges. The survey outline is as follows.

Survey period            July 1 to August 10, 2021

Survey method          Web questionnaire survey (Macromill Questant)

Survey target             Member companies of the Japan Society for Corporate Communication and others (Effective number of responses: 52)

Survey items              DX initiatives and activities in PR, priority themes, challenges in promoting DX, etc.

Efforts for PR DX

In the questionnaire survey, we first asked about initiatives for DX (dramatic transformation such as business model innovation using digital technology) as PR. Only 29.4% are already working on DX as PR out of the four choices: already working on DX as PR, planning to work on it, considering whether to work on it, and not planning to work on it. According to the “Management Issues for Japanese Companies 2021” survey conducted annually by the Japan Management Association, 65.6% (large companies, 51.1% in 2020) are already working on DX as a company. The number of companies working on DX as PR is less than half, and it seems to be still small.

Next, (Figures 2 and 3) are a survey of the digital measures that PR are currently working on and the measures that will be particularly focused on in the future (five years from now). To consider the impact of engagement toward PR DX, we compared the response of companies already working on DX and companies that do not plan to work on DX, excluding the answers that are planning to work on it in the future or are considering whether to work on it.

Of the PR that answered that they have no plans to work on DX, as shown in Figure 2, although the utilization of their own website is currently high at 88.9%, they are to utilize digital media and social media, and their digital PR process in the future.

On the other hand, in PR that are working on DX, as shown in Figure 3, more than 80% are already working on disseminating information using digital media and social media, and digitizing PR processes as well as utilizing their own websites. Most of these are DX1.0 initiatives at the DX level, but they clearly show the intention to shift the focus of efforts toward more drastic changes in the future. They will be moving forward to a full-fledged DX2.0 level, such as interacting with customers and influencers through online communities and improving engagement by improving the experience value of customers and employees.

Figure 2: Efforts on digital measures in PR (no plans to work on DX as PR).

(Source) Created by the author

Figure 3: Efforts on digital measures in PR (working on DX as PR).

(Source) Created by the author

Themes to focus on

What kind of themes are they trying to focus on in PR while working on utilization of digital technology as described in the previous section? According to (Figure 4), which is a graph of the results of the questionnaire survey, the rate of brand value improvement is currently the highest at 70.6%, followed by improvement of product/service awareness (68.6%) and management philosophy/purpose penetration (47.1%). As for the future (five years from now), brand value improvement will be the highest as it is now, and the management philosophy/purpose penetration ratio will increase from 47.1% to 51.0%. Numbers such as employee satisfaction, employee experience value improvement, and globalization also increased significantly. On the other hand, the increase in recognition of products and services dropped significantly from 68.6% to 47.1%. This result seems to reflect the change in the business model of companies evolving from product out to value co-creation that emphasizes experience value.

Figure 4: Themes that PR focuses on.

(Source) Created by the author

Challenges in Promoting DX

Finally, (Figure 5) summarizes the challenges PR face when working on DX.

The most frequently cited challenge was improving the IT literacy of PR personnel. Next, challenges such as inter-organizational collaboration with the marketing department, utilization of third-party services, and budget constraints were raised.

In promoting corporate DX, 90% of companies cite a shortage of human resources (Japan Management Association, 2021), it is one of the top priorities in PR DX to secure and train human resources who will be responsible for utilizing digital technologies.

Figure 5: Challenges in Promoting DX.

(Source) Created by the author

In addition, regarding inter-organizational collaboration and utilization of third-party services, the improvement of customer experience value through owned media collaboration between organizations and system linkage with MA (Marketing Automation) tools of the marketing department are raised as challenge.

Case Studies

As shown in the previous chapter, there are not many companies that are working on full-fledged DX as PR, but some companies have created value through DX communication.

The table below is a list of case studies that we have been investigated in our research. Nomura Research Institute, which promotes its branding that conveys insights through the voices of employees; OMRON, which aims to improve CX by reproducing factories in a virtual space; Toyota Motor, which uses cross-media communication to convey Toyota's current thought and business situation; and Toshiba, which enhances digital customer contact points; and Nestlé Japan, which promotes a brand strategy based on a universal purpose.

In this chapter, I will introduce en Japan's "en soku!" and Hitachi's "I am Hitachi" below. In both cases, employees are the starting point. "en soku!" is an example of changing the environment of information distribution to change the role of employees. "I am Hitachi" is an example of permeating corporate culture through its employees.

Table 2: List of Case Studies.

 en Japan’s internal communication by "en soku!"

en Japan, Inc., a Japanese recruitment service company, had been publishing an in-house newsletter called "en Japan Times" on the intranet for some time. But its frequency of article updates was low, there were few local topics in various bases and departments, and the content covered was limited. Few communications exchanges were born through the media because of one-sided information offering style. The scale of the company has expanded rapidly, and the number of employees has increased fivefold in the last ten years. In response to these situations, in FY2017, the company renovated the newsletter and developed the company's online internal newsletter "en soku!".

The concept of "en soku!" is "an in-house newsletter created by all employees, open to the public", and its feature is that it is not limited to the employees but also published outside the company. This is the challenge to have employees learn more about the company itself, especially the diverse working styles of various types of employees and want them to like the company more. Based on the idea that it is important for employees to feel that they are receiving attention from outside the company, “en soku!” has started as a medium that conveys internal events and the daily lives of employees as they are to all related parties. They have established a system in which employees themselves serve as reporters and dispatch articles. Articles are updated and published daily with update notification; it delivers "en Japan now" in a timely manner. As a further use of digital technology, en Japan has started to convey internal affairs on YouTube since FY2019. The YouTube company newsletter is also open to the public.

The original purpose of the newsletter was to directly improve employee loyalty and strengthen engagement, but the evaluation from external parties such as customers and business stakeholders improved by disclosing internal information. As a result, the employees became proud to work for a company that was respected, which led to increased loyalty and stronger engagement after all. According to an in-house questionnaire, employees' families commented, "It's a wonderful company," and customers commented, "en Japan has gained more trust."

The public disclosure of the in-house magazine had a positive impact on recruitment and sales promotion activities too. For example, more than 80% of mid-career hires responded to a questionnaire that viewing content increased their motivation to join the company. The company’s recruiters use it as an opportunity to communicate with prospective candidates, and in some cases, it has led to the re-entry of employees who had left the company.

It is one example of value co-creation in which the experience value of internal communication, which was produced by the employees themselves, was conveyed to external stakeholders such as customers, amplifying empathy.

Hitachi’s "I am Hitachi"

Hitachi, Ltd. has been working to present the Inspiration of the Year Global Award to cases that embody its corporate identity and greatly contribute to improving the value of corporate brand. Originally since 2003, it had been held mainly in Japan, but in 2014, its scope was expanded globally. There are hundreds of entries for this activity, and the world is divided into six regions, and the Grand Prix is ??selected from each region. Grand Prize winners will be honored at a global awards ceremony attended by the President and given the opportunity to showcase their project's success stories to employees around the world watching online.

The awardees will assure the connection between their award-winning project and the Hitachi Group Identity and undergo a special training program to speak as a brand ambassador in various places. Once certified as brand ambassadors, they devote themselves to enlightenment activities so that all employees working globally can understand and practice the Hitachi Group Identity.

"I am Hitachi" is a series of four-minute stories about how each brand ambassador demonstrated its founding spirit and contributed to the realization of its vision in the award-winning initiatives. Difficulties and conflicts leading up to the completion of the project, and the process of overcoming them, in the words of the people involved, it creates empathy for the viewer. The videos are also published outside the company through YouTube and social media. By using an approach in which employees candidly convey their thoughts and feelings, Hitachi aims to create an organizational culture in which people take pride in the Hitachi brand while working synergistically to enhance the experience value of employees, customers, and other external stakeholders. This approach leads to value co-creation. The videos are also used in recruitment activities, and there are many cases in which people decided to join the company because they sympathized with Hitachi's corporate philosophy.

We considered DX initiatives in PR through survey research and case studies. According to the questionnaire survey, about 30% of companies responded that they are working on DX, but the focus is currently on improving operational efficiency (DX 1.0 level in our definition) by digitizing the PR process. As it turns out that full-fledged DX is still on the way. In addition, the themes to be emphasized in the future are brand value improvement, penetration of management philosophy and purpose, improvement of employee experience value, etc. Although the approach differs depending on the company, new initiatives using digital technology have just started. Employees in Japan and overseas share the philosophy of the corporate brand and increase the centripetal force, and the employees themselves become ambassadors to generate empathy for stakeholders inside and outside the company. An example of this is the efforts of en Japan, which contributes to recruitment and sales promotion activities by widely introducing the value of its own experience to people inside and outside the company. We hope that the effectiveness of digital tools will be demonstrated through such trial-and-error efforts, and PR DX will be activated by sharing knowledge and experiences as use cases. Additionally, in the future, it will be necessary to create excitement and empathy by spreading the management philosophy and purpose inside and outside the company, and to activate value co-creation efforts that enhance the experience value of employees and customers.

On the other hand, as introduced in the beginning of this paper, DX is a challenge to co-create value using data and digital technology, and how to utilize digitally connected relationships and digitally acquired data is the key to successful PR DX. Currently, we are limited to improving the performance of individual measures by utilizing PR tools such as measurement services and social listening services, but comprehensive efforts are necessary to increase the value contribution of PR. To that end, rather than introducing digital tools individually, it is essential to design the value creation process that the company's PR aims for, and to develop a digital platform as the optimal mechanism for that process. It is also important to connect stakeholders through digital platforms and maintain and strengthen good relationships through various points of contact.

In this research, we considered the communication framework "DX Communication Concept", the current efforts and the future direction of PR DX. However, it is on the way, and there is still room for further research on the specific configuration of the digital platform for PR, the mechanism of data utilization, measures to improve IT literacy to accelerate digital utilization, organizational culture reform, and the shape of value co-creation on the digital platform. Functional collaboration with other organizations such as marketing will also be an important theme. Further consideration is necessary for these, and we would like to make it a future research topic.

In compiling this research note, we received the cooperation of the members of the DX Communication Study Group, the companies and PR people who provided materials as case studies, and the guest researchers who gave informative talks. We would like to take this opportunity to thank them all for their contributions.

This article is from the research note in the Corporate Communication Studies Issue #26, March 2022, Japan Society for Corporate Communication Studies.

1. Hiroto Ebata. DX from a marketing perspective (December 14, 2020, presentation material at the DX Communication Study Group). 2020.
2. Ministry of Economy, Trade and Industry “DX promotion index” and its guidance. 2019.
3. Ministry of Economy, Trade and Industry 2020. DX Report 2 (interim report) 2021.
4. Philip Kotler. Principles of Marketing Prentice-Hall. 1994.
5. Philip Kotler/Waldemar Falch/Uwe Sponholz 2021.
6. Kotler's H2H Marketing -Theory and Practice of Human-Centered Marketing- KADOKAWA
7. Kowalkowski C, Uraga W, Keiko Toya, Masaaki Mochimaru B2B Service Strategy Toyo Keizai Inc. 2020
8. Junichi Muramatsu Value Co-Creation Marketing and PR (September 2021 Lecture at DX Communication Study Group). 2021
9. Japan Management Association Management Issues for Japanese Companies 2021-Bulletin of survey results. 2021.