sourcingfocus.com catches up with outsourcing guru David Smith, Global Chief Innovation & Technology Officer at Fujitsu and learns a little Japanese along with the way..

WHAT IS FUJITSU’S STANCE ON INNOVATION IN OUTSOURCING? HOW DO YOU DEFINE IT, AND HOW DO YOU MAKE IT HAPPEN?

Innovation is about creating incremental business value by doing something differently.  Innovation in the context of outsourcing can be a number of things: a new offering adding value, a compelling solution delivered for a customer, or it could be a particularly innovative commercial approach.  The fundamental premise of our approach to innovation is that it is collaborative, with our customers, with our partners and by delivering the collective power of Fujitsu’s people.  We launched an Open Innovation service last year in the UK and have run a number of crowdsourcing events both internally amongst our people and externally with customers and third parties.  Working closely with our customers enables us always to focus on delivering business value, often enabled by technology though we do not restrict our thinking to that.

REGARDING YOUR FIVE YEAR DEAL WITH MCDONALDS, CAN YOU EXPLAIN FURTHER THE CONCEPT OF “USER EXCHANGABLE PARTS”?

The users are the McDonalds restaurant employees who are being trained so they can swap faulty parts in the company’s EPoS retail IT system for new ones instead of relying on engineers to fix relatively straightforward problems. The benefit is that problems are solved with greater speed and at a reduced cost, which is great for our customer.

HOW DO YOU SEE DAVID CAMERON’S VISION FOR THE BIG SOCIETY AND OPEN SERVICES AFFECTING LARGE OUTSOURCING PROVIDERS SUCH AS FUJITSU?

The Government’s aspirations for the Big Society involve the creation of “mutual” organisations which are constructed along a partnership model. We think there are likely to be hybrid organisations forming, including mutuals, which retain a government stake (to protect assets and benefit from future buy-outs or uplifts) and involve the private sector as a joint venture partner. This could provide the blend of commercial know-how and the public sector service ethos to deliver a winning combination for both citizens and taxpayers. Fujitsu’s existing partnerships with government departments and schemes such as HMRC, LGSS (Cambs and Northants Local Government Shared Service) and Northern Ireland Civil Service illustrate how some public-private partnerships can deliver a positive outcome. The flexibility of relationships is vital, and we have learned to ensure a pragmatic balance between our commercial and business-critical priorities, which we know our customers value.

Large outsourcing providers like Fujitsu, through their role as a systems integrator, can also extend the option of involvement in a part-mutualised public body to SMEs. In this context SMEs have traditionally been smaller technology companies, but this approach could easily be extended to local community-based organisations who would struggle to tender for local services in their own right.

HOW JAPANESE IS THE BUSINESS CULTURE AT FUJITSU?

We aim to bring the best of our Japanese heritage and its focus on quality, continuous improvement, and Lean thinking and marry it with the local cultural alignment of our operations around the world.  We have a clear and relentless focus on the needs of our customers.  We always focus on how we can enable them to achieve their business objectives and maximise the value they deliver to their own customers. Many management techniques taking their inspiration from Japan, such as Genchi Genbutsu (go and see for yourself), and Heijunka (workload levelling), pervade the way we approach business, both in working with customers and in our back office activities. In addition, Fujitsu globally takes a long term view: in building assets and capabilities, in entering new markets and most importantly in investing in customer relationships. Our customers tell us that this culture makes for fruitful and lasting partnerships.

CAN YOU TELL US MORE ABOUT FUJITSU K AND ITS UPCOMING ROLE IN THE JAPANESE GOVERNMENT?

The K supercomputer which Fujitsu developed in partnership with RIKEN * is famous for being the fastest computer in the world with a computing capacity of 8.162 quadrillion times per second. However, in achieving that performance, it also demonstrates facets of the company’s focus on quality and engineering excellence. For example it has 70,000 CPUs working together at an efficiency rate of 93% which in that context is an outstanding achievement. 

The Japanese government invested more than 100 billion yen (US$1.25 billion) in the K supercomputer project and its intent was to maintain Japan’s position as a leading force in this field. The supercomputers will be used to enable research to tackle a range of complex problems related to climate change and weather patterns. It will also enable Japanese industry to be more competitive globally by providing a powerful computational tool to develop breakthroughs in drugs, materials and new technologies.  The link with RIKEN is also likely to provide impetus to the research into renewable energy, and research to protect people from natural disasters by predicting the impact from earthquakes and tsunami.


* RIKEN is an independent administrative institution under the Japanese Ministry of Education, Culture, Sports, Science and Technology whose mission is to conduct comprehensive research in science and technology and to disseminate the results of its scientific research and technological developments. RIKEN carries out high level experimental and research work in a wide range of fields, including physics, chemistry, medical science, biology, and engineering

WHAT IS NEXT FOR OUTSOURCING? WHERE DO YOU SEE NEW OPPORTUNITIES / MARKETS ARISING? WHAT WILL BE OUTSOURCED THAT ISN’T CURRENTLY?

There are a number of key trends driving what the technology sector can deliver to the world.  The “on demand” model that is inherent in the cloud computing wave with the “as a service” mantra is driving the evolution of the outsourcing market.  There’s a concept often called the “Internet of Things” which references the new opportunities we have to harness the cost economics of cloud computing and to combine it with pervasive networking and ubiquitous devices/sensors. The result is to build technology even more into the fabric of our lives. 

The way we describe this emerging opportunity at Fujitsu is that we have the potential to build a human centric intelligent society where technology is part of the fabric of life. Examples of these new types of service include: smart city initiatives; smart metering to drive the sustainability agenda; and telematics to transform how our transport systems operate.  Finally more immediately the evolution of cloud computing and the dynamic I would label the “consumerisation of corporate IT” is showing signs of completely transforming how corporations purchase and operate technology based services. All these areas move us into a new form of outsourcing model.

About Fujitsu

Fujitsu is a leading provider of information and communication technology (ICT)-based business solutions for the global marketplace. With approximately 170,000 employees supporting customers in over 100 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.5 trillion yen (US$55 billion) for the fiscal year ended March 31, 2011. For more information, please see: www.fujitsu.com