Three Types of Japanese Customers – Part 2: The Self-Confident Outsourcer Implications for Foreign Software Vendors

No Comments Business in Japan,Three Types of Japanese Customers

office buildingsWhen it comes to choosing a software vendor for a project in Japan, there are three types of customers. It all boils down to defining which player bears responsibility for the decision…

Let’s see how they differ, which is more frequent, and what that means for a foreign IT company wishing to do business in Japan.

In this short series, we consider each of these Japanese customer types, starting with The Independent Thinker. This second part is about The Self-Confident Outsourcer. Enjoy your reading!

The Self-Confident Outsourcer

macbook-667280_1280While Independent Thinkers are happy doing everything internally, Self-Confident Outsourcers know their limits: while they know what they want, they also realize handling a complete IT project internally is not possible. Development, customization and integration are best left to specialists.

Still, these companies know what software solution will be implemented: they may have been using the same software for years and may be satisfied, or they may have identified a good match through research online or at industry-specific events or exhibitions.

When it comes to mounting a project, Self-confident Outsourcers will provide detailed specification, including the software solution(s) they wish to deploy, and will work with a system integrator tasked with project implementation. Once the project is running, the Self-confident Outsourcer will want to manage as many things as possible (setting modifications, internal training, support, etc.) without relying on the system integrator.

For a foreign IT vendor, the Self-confident Outsourcer looks like the typical western customer. If the vendor puts enough effort into promoting an adequate product to the Japanese end-user, the customers will indeed likely select the product. The biggest difficulty is to provide system integrators with experience deploying your product so that they can address the customer’s needs. Otherwise, there won’t be any system integrator able to bid on the Self-confident Outsourcer’s project.

Practically speaking, I have only encountered Japanese Self-confident Outsourcers in renewal projects: the existing system has aged, and they want it upgraded with the latest software version running on new hardware and with some additional customizations. As such, working with a Self-confident Outsourcer is quite difficult for a newcomer. Foreign software vendors should plan to invest significantly in promotion and on establishing working relationships with system integrators to address this type of customer.

Nonetheless, the Self-confident Outsourcer is the ideal long-term Japanese customer: provided your solution is updated regularly with innovations and keeps up with the market, this customer is not likely to stop working with you, and the system integrator won’t have a say in it.

Stay tuned for the third and last part of this series!

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