Osaka Gas, established in 1897, is a Japanese energy and services company that provides natural resources and high-tech machinery to residential and corporate customers both domestically and abroad. In 2019, they signed an agreement to partner with HACARUS for the joint development of AI and IoT solutions. Making use of HACARUS’ proprietary Sparse Modeling technology, both companies are combining their efforts on a collaborative efforts. Mr. Tomohito Okamura, Director of the Business Analysis Center, who oversees data analysis operations, explained the background and significance of teaming up with HACARUS and the future expectations of this collaboration.
Mr. Okamura’s Biography
Tomohito Okamura, who joined Osaka Gas in 2001, has been heavily involved in data science throughout his career. In 2018, he became the Director of the Business Analysis Center, an organization specializing in data analysis. As director, Mr. Okamura manages the data science teams and stimulates inter-company collaboration, with startups such as HACARUS, based on data analysis and data utilization.
Gas Pipe Examinations and Defective Product Detection: Improving Efficiency and Ensuring Quality with AI
First of all, could you tell us briefly about the joint project?
So far, we have conducted demonstrations for the inspection of gas pipes buried underground and the detection of defective products in manufacturing lines. Typically, both of these jobs require skilled workers who are specially trained. However, by allowing AI systems to study their performance, it is possible to accurately map the location of gas pipes, using underground radar images. In addition, similar technology allows computers to automatically detect defective components in factories, greatly increasing their efficiency.
What values do you think AI can bring to society through your operations?
For many labor-intensive industries, especially manufacturing, concerns regarding the state of the workforce have been on the rise. In manufacturing, an engineer’s knowledge and skills are indispensable for on-site work. However, the number of “baby boomers,” who can pass on their knowledge and skills to a younger generation, are beginning to retire from the field. AI systems can potentially aid these new engineers and improve the efficiency of the entire industry. To address these concerns, we want to showcase the potential for AI, relating to operational efficiency and specialized labor.
Osaka Gas: A Pioneer in Data Analysis
Now, data analytics and digital transformation are common practices, but isn’t it true that your company has been actively promoting it for some time now?
Here, we have been prioritizing digital transformation for several decades. Prior to the Business Analysis Center, a team specializing in data analysis was established back in the early 2000’s. Even though we are now known for our history of data analytics, back in the 2000’s, it was still difficult to convince people that what we were doing was useful. Even within our own company, we were often met with blank stares and turned away from other departments. Despite this, we gradually built up our track record, and now the other departments recognize us for our contributions to the company using data analysis. To outsiders, we are also highly regarded as an organization that is dedicated to data analysis.
Could you explain more about the company’s long-term management vision, “Going Forward Beyond Borders 2030”? In what ways are you planning to provide “products and services that exceed customer expectations” through the introduction of advanced technologies?
Our business is mostly divided into two categories: “home use” and “industrial use”. Let me use the “home market” as an example. Here, we offer not only gas and electric services, but also a variety of plans that match the customers’ lifestyles, hobbies, and interests. At the same time, we are actively promoting the “Jumimikata Service,” which provides solutions for general housing issues, as well as the “Tsunagaru de series,” an IoT compatible gas appliance. We plan on releasing new services that utilize IT, such as an IoT service for industrial construction factories, which we are calling “D-Fire.”
Partnering with HACARUS
For data analytics, you are very active in collaborating with venture companies like HACARUS. What advantages do you see in this?
Right now, the DX industry, including IT and data analysis, is rapidly evolving and it is progressing at a dizzying pace. It is not easy keeping up with these constant changes on our own, so we have decided to partner with ventures that are well-versed in specific fields or niche technologies to gain expertise and quickly develop solutions and services that make use of this knowledge. By working together with HACARUS, we are hoping to not only improve the efficiency of our internal operations, but also develop new solutions using AI and IoT.
In 2019, Osaka Gas signed an agreement to work with HACARUS on joint development of AI and IoT solutions. From your experience since then, what are your thoughts about the project?
It all began back in 2018, when I first met Mr. Kenshin Fujiwara, the president of HACARUS. He had previously read the book “The Data Analysis Organization: Why Osaka Gas Succeeded” written by Kaoru Kawamoto (currently a professor at Shiga University in the Department of Data Science), the former director of the Business Analysis Center. After reading this book, he expressed his interest in Osaka Gas and requested a meeting with us. During the meetings that followed, I was able to see the passion that everyone at HACARUS had for data science. I felt like they were a company that I could trust and that we would develop a successful working relationship.
Moving on to our work relationship, there were many reasons for choosing HACARUS. Of course we were enthusiastic about their AI technology, which enables identification and prediction with small amounts of data, but also their attitude towards conducting business. During our meetings, everyone was open and honest with each other, which created a productive and professional atmosphere. We came to understand the benefits of AI implementation, but we also learned of alternative options outside of AI. It was also refreshing to see that during our discussions, instead of just pitching their services to us, they provided us with objective opinions and positive suggestions based on other companies’ services too. From this point, we were able to build a strong relationship and we began to move towards our joint development project.
In March of 2021, we announced our three-year management plan, “Creating Value for a Sustainable Future,” which extends through the fiscal year of 2023. In this plan, we mentioned the need to collaborate with venture companies, and I believe that our involvement with top-level tech startups, including HACARUS, will continue to grow in the future.
Gathering Supportive Allies: Bringing Positive Change Through Digital Transformation
Before, you mentioned that there were many people within your company who didn’t understand the need for data analysis. How did you convince them to adopt this technology and increase their understanding of it?
I think that it is normal for people to be weary of new technology or work practices. The best way to convince them is by producing results. So first, we slowly began to publish our success stories, until the other teams and departments around us became unable to ignore us. For example, if my team managed to successfully incorporate AI technology into our work, we would share these results. Once other teams heard about our success, they gradually opened up to the idea of using AI and began to think that they could do the same. Using this method, the image surrounding AI within the company began to change and gradually, our colleagues’ mindset shifted throughout the entire organization.
So, by starting with a small success story, you feel that it can create a ripple effect throughout your company?
I think that it is certainly effective. However, at the same time, I think that it is important to know how to target people who will fully support your project from the beginning. Within any department, there are always people who are interested in trying something new. It may be a good idea to work with these individuals to create a successful project that can help sway the opinions of the skeptics indirectly.
Strengthening Cooperation Through Investment: Creating Business Through New Solutions
Looking towards the future, what do you expect from HACARUS, and what other types of projects would you like to collaborate on?
In addition to the projects that we are currently working on, we are open to exploring potential projects in any number of fields. Working with this in mind, we made an investment in HACARUS in April of 2020, which was very big news for us. We hope to create an even deeper relationship from this point and work towards some truly innovative solutions. We hope that they will continue to develop cutting edge technologies and hopefully share them with us as well. Together, I think that we can develop brand new solutions that will benefit society and lead to new business.
Last of all, as an energy company, supplying our customers with a stable supply of services is our number one priority and absolutely non-negotiable. Along with the development of advanced technologies, we would also like to strengthen our partnership so that we can continue to provide new and innovative solutions to our customers long-term.
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