Special Issue

Collaborations for New Business Creation

The Modeling of a New Business Creation Process
Based on the Case of the Development ofa Road Sign Inspection Support System
Kiyoshige Hirose*1, Katsuki Suematsu*2, Junya Hirano*2, Kazutaka Nara*1

There are problems in the fact that the inspections and the maintenances of theroad signs owned and managed by the local governments nationwide,
especially the inspections of the small-scale road signs, are often postponed due to theshortage of the human resources and the lack of the funds at each local government. In
response, Furukawa Electric Group has developed and released a road sign inspection support
system. Using this development as an example, we modeled the process of the new businesscreation activities starting from the market by defining them in six Phases. There are obstacles
between each Phase, and the specific activities are required inside and outside a company inorder to overcome the obstacles. It is difficult to carry out these activities alone, and the newhuman combination inside and outside the company that goes beyond the existing organization
becomes important.

ABSTRACTINTRODUCTION
1.1. INTRODUCTION
In the inspection and the maintenance of the road signs
owned and managed by local governments nationwide,
the important large structures such as bridges and tunnels, etc. and the road signs such as sheds, pedestrian
bridges, gate-shaped signs, etc. have been given the priority due to the aging acceleration and the shortage ofthe human resources for the maintenance and the management. On the other hand, the inspection and themaintenance of the small-scale road signs such as roadsigns and lighting facilities, etc. are often postponedsince the number of them is enormous and due to theshortage of the local government human resources andits funds. In addition, the facility ledgers and the inspection records have not been organized well or are inadequate. Furukawa Electric Group has developed andreleased a road sign inspection support system (hereinafter referred to as an inspection support system) toaddress these social issues.
In this paper, we modeled, defined, and organized theprocess of the new business creation activities startingfrom the market, taking the development of the inspection support system that is a new business creation for
Furukawa Electric Group as an example.

THEOUTLINESOUTLINES OF THE
2.2. THE
THEROADROADSIGN
SIGN
INSPECTIONSUPPORTSUPPORT SYSTEMSYSTEM
INSPECTION
Figure 1 shows the work flow of the inspection support
system. By combining a record file in which the latitude
and the longitude information of the inspection target is
input and a GPS system connected to the tablet terminal,a photograph of the inspection target near the current
position is automatically displayed. This enables a more
efficient inspection. At the same time, by utilizing the camera of the tablet terminal, it is possible to create a record at
the inspection site. This system was created in collaboration with CHUDEN ENGINEERING CONSULTANTS CO.,LTD.. (hereinafter referred to as Chuden Engineering
Consulting).

Marketing Relationship Management Department,
Marketing Initiatives & Business Development Department,
Global Marketing Sales Division*2
Customer Relationship Management Department,
Marketing Initiatives & Business Development Department,
Global Marketing Sales Division*1

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The Modeling of a New Business Creation Process Based on the Case of the Development of a Road Sign Inspection Support System

Investigation

Main inspection

Record completed

Oﬃce

Oﬃce

Oﬃce
Preparation
・Business # setting
・Past record reading
・Special note setting, etc.

Organization
・Record edition,
data input
・Map insert, update

On siteOn site・Identifying the target facilities
with Augmented Reality (AR).
・Calling the relevant record.
・Updating the location
information, new registration.
・Whole view, base photography.

・Identifying the target facilities
with AR.
・Calling the relevant record.
・Photography(digital camera etc.)
・Record of damage level, etc.

・Record edition, data input
・Map insert, update・Photo sorting, selection
・Record completion,
Excel output

Figure 1 The work flow of the road sign inspection support system.

THEDEFINITION
DEFINITION OF
NEW
BUSINESS3.3. THE
OFTHE
THE
NEW
BUSICREATIONPROCESSNESS
CREATIONPROCESS
Based on the example of the inspection support system,
the new business creation process, especially the activity
in the fuzzy front-end area from the creation of the idea tothe development of the prototype, is defined as shown in
Figure 2. Phases are set to a series of 6 from 0 to 5.
Commercialization corresponds to Phase 5 onwards andthis definition is the process up to just before the commercialization. The definition of Phases are shown below.
• Phase 0 “Knowledge learning”
If the target market already exists in the world, it is necessary to learn the knowledge of the market and theindustry. In the market that does not exist in the world, it
is necessary to learn the peripheral markets and industries. The peripheral markets and industries are the markets and the industries where the potential customers in
the new market are present.
The knowledge to be learned includes “the issue of theindustry”, “the industry key player who knows the issue”,“the existing solution to the issue”, “the industry features(value chain, 5F, the industry growth period, the life cycleof product service, etc.)”, “the degree of consistency withthe social change and the direction of the industry
change” and so on.
We participate in the industry community through theacademic societies and the other organizations in orderto obtain not only the secondary information, but also theprimary information such as web and books, etc.
• Phase 1 “Job search”
Once the key people who know the issue in the community are identified (They can be an assumption.), it isnecessary to sharpen the issue in the industry and continue searching for the planning of the specific job and its
solution. The term “job” used here follows the definitionof job theory1) by Clayton M. Christensen.
In many cases, one visit and one dialogue do not reachthe job, so the visit and the dialogue should be maderepeatedly. We reach the true job while pivoting the key

people and the proposal hypotheses keeping in mind theinformation that will lead to the next Phase.
• Phase 2 “Concept prototyping(including the draft business model)”At this stage, the job obtained and its solution are simplified as much as possible and the appeal level isincreased. The basic provision functions are defined, theprovision values of our company are reviewed and thepositioning is clarified. The quantitative targets associated with the jobs are set in order to quantify the functions.
• Phase 3 “Creation of the verification set up”
This is the stage of the demonstration in the verification
set up in order to evolve from the concept to the productand the service. A testbed that allows the quick verification of the concept prototype is designed. It is better toselect the candidates for the verification set up at thesame time as planning the concept of Phase 2.
The verification set up is either prepared by ourselves
or utilizes the opportunity prepared by other parties.
• Phase 4 “Product prototyping”
This is the stage where the prototypes incorporating
the functions required for the verification are put into theverification set up, and the feedback and the correction
are quickly performed. The technologies and the resources that are necessary for prototyping but not owned
by our company will be procured from external.
• Phase 5 “Sharpening business scenarios”
Through the verification, we will add not only the basic
provision functions but also the secondary functions
required for the social implementation. At that time, we
design the scaling towards the commercialization, taking
into account of the value chain around the basic provisionfunction and the nodes of the ecosystem.
There are obstacles between the Phases, and it is necessary to continue to invest the appropriate activity resourcesin order to overcome the obstacles. They are the resourcesof finance, human (activity and channel), technology andtime. The commitments by the top management of the
new business creation department are required.
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The Modeling of a New Business Creation Process Based on the Case of the Development of a Road Sign Inspection Support System

Phase0Phase1

Phase2Phase3Phase4Phase5Knowledge
acquisition

Job search

Concept
prototyping

Creation of theveriﬁcation set up

Product
Prototyping

Sharpening thebusiness scenario

Who is on thesame layer?
Who is in theindustry?

What you needto implement?

?

First,
set the Issue.

Create reason ofnext visit.
Give vectorsthat do not loop.

Social issues
×
Our identity

Ask anything you
don't understand.
Simplify to whatmatters most.

Find a partner
to verify.
(job)
Simplify what
Who is in trouble?
you want to
How is that situation?
pursue.
What do you wantto progress?

Proﬁtable mechanism.
Who is willing
Sharpened the jobs.
to ﬁnance?
What is the mostWho hates it
important function?
and how to
What is an
avoid it?
essential function?
What function you
can discard?

Figure 2 The definition of the new business creation process (at the fuzzy front end).

EXAMPLE:THE
THEPROCESSPROCESS FOR
FOR THE
4.4. EXAMPLE:
THEROADROAD
SIGNINSPECTION
INSPECTIONSUPPORTSUPPORT SYSTEMSIGNSYSTEM
Figure 3 shows the activities of each Phase for theinspection support system developed.
• Phase 0 “Knowledge learning”
Based on our company's identity and the social issues,“Maintaining the social infrastructure” was set as the tar-

get area. At this time, the possibility of applying our company’s optical fiber sensing technology to the visualization of the maintenance and the management of thesocial infrastructure has been invented based on our
technical experience. Through the information such as
the market research, the lectures, etc., we participated in
the community suitable for this job search.

Phase0Phase1

Phase2Phase3Phase4Phase5Knowledge
acquisition

Job search

Concept
prototyping

Creation of theveriﬁcation set up

Product
Prototyping

Sharpening thebusiness scenario

Setting social issues
×
Our identity=Setting area

At least once a month
Meeting with customers

Once a month
Meeting with customers

2013/12
Industry sponsored.
Participating in the co-marketing.
Origination of the bridge inspection
idea with optical ﬁber sensor.
Hearing from operators.

- Be sure to get homeworkat the beginning.
Have a means to visit next.
- Ask anything you don't understand.
- Top management support.
- Single speciﬁcation for veriﬁcation.
(Complex system of bridge
Position of road sign)- Creating a self-veriﬁcation set up,
Telemarketing, exhibition use.

(Job & Solution Hypothesis)
On-site inspection
challenge.
Twice a month
Load reduction
Meeting with customers
with AR etc.
Discussion on the conceptof the bridge inspection.
2014/5
Participating in the ﬁeld
2017
study group.
Product Prototyping & Telemarketing
Monthly group
300 Companies
participation2017
37 companies report
Sharpening the13
demonstrations.
Interaction with Chuden
business model.
Engineeing Consulting.
Feedback by exhibiting
Horizontal deployment
at infrastructure maintenance ﬁeld search.
(Job)
exhibition.
Don’t know where to start
Customer meeting
the inspection.
as appropriate

Figure 3 The example of the development of the road sign inspection support system.

Furukawa Electric Review, No. 51 202013

The Modeling of a New Business Creation Process Based on the Case of the Development of a Road Sign Inspection Support System• Phase 2 “Concept Prototyping” 2nd time
After the meeting with Chuden Engineering Consulting
once a month, a prototype of the road sign inspection
support tool using an AR was created. The verification
with Chuden Engineering Consulting provided the prospect of solving the technical issues, but the concern wasthat only Chuden Engineering Consulting was the Voiceof Customer (VOC). Therefore, we decided to create theverification set up and ask for the opinions on the prototype.
• Phase 3 “Creation of a verification set up”
Phase 4 “Product prototype”
This Phase is performed simultaneously in this example. The telemarketing was conducted to create the verification set up. We conducted the telemarketing for 300
companies and obtained the opinions from 13 companies
on the demonstration of the product prototype. In addition, as another method of creating the verification set up,
we identified the interested potential customers andacquired the VOCs by participating in the related exhibitions.
• Phase 5 “Sharpening the business model”
By collecting the VOCs, we identified the high-value
processes in the value chain for the road sign inspection.
We examined the business models that could appeal tothem.
In addition, we were able to find out the horizontal
spread of the inspection targets through the interviews
with the stakeholders who inspected the road signs.
From Phase 5 onwards, it will enter into the Phase of
the commercialization. The challenge now is to develop
the customers so that the potential customers make purchasing decisions.
Figure 4 shows a typical six-layer sales funnel. In thisexample, “Lead” has been cultivated through the telemarketing and the exhibitions, the potential customers who
are likely to be willing to purchase have been extracted

Audience who watched ads, etc.

Prototype

VisitorPotential customers whom you can contact.

Lead

Telemarketing visit.

Potential customers identiﬁed
from marketing activities.

MQL

Potential customers identiﬁed
from Sales activities.

SQL

Did you thinkenough about
this part ofthe process?

Promising potential customers
with high probability of order.

Opportunity

We can’t bring it
here suddenly.

- Identify the potential customers who
are willing to buy and advise sales.
- However, the potential customers who
are likely to be willing to purchase may not
be the customers from a sales perspective.

Products

Mainly sales activities Mainly marketing activities• Phase 1 “Job search”
By participating in the co-marketing sponsored by theindustry, we found the players and the key players in theindustry. We had a dialogue with the people in the industry, having the hypothesis that the optical fiber sensors,which is a technology owned by our group, can contribute to the maintenance management by visualizing thevibration of the structures and monitoring. Through theinterviews with the company that was conducting thebridge inspection, it was found that there was an issue
that the load at the time of inspection at the bridge site
was high. Also, the core idea of the inspection support
system to reduce that issue with an AR came up. During
this time, we had a meeting with the company at least
once a month.
• Phase 2 “Concept prototyping”
The detailed version of the concept of the bridge
inspection was discussed more in detail with the company and the simplified version of the bridge inspection
using AR was created and verified. At that time, theimportant issues such as location information (GPS), etc.
could be captured, but the initial prototype did not lead to
a complete solution. In addition, it was understood
through the prototype that it was difficult because thebridge structure is complex and the GPS informationmust be accurately provided for each inspection point.
We decided to pivot to the inspection target that could be
simplified more.
• Phase 1 “Job Search” 2nd time
By participating in a study group in this field once amonth, we searched for the key players in the inspectionindustry. Then, we met with Chuden Engineering
Consulting and recognized that the road signs would be
the target. In addition, at the time of the inspection of theroad signs, the laying position may change from the initial
position, and there may be no initial ledger. As a result,
we arrived at the job of the operator who did not know
where to start.

Customers

Customer

Figure 4 Sales funnel.

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The Modeling of a New Business Creation Process Based on the Case of the Development of a Road Sign Inspection Support Systemand the sales has been promoted. However, there are stillseveral steps before the actual decision is made, and thegap has not been filled. From Phase 5 onward, designingof the marketing and the selling process that takes into
account of the customer journey from the beginning ofmarketing will be an issue.
Note that the issues of the mass production after Phase
5 (quality assurance, securing the resources necessary
for the stable mass production, etc.) will not be describedin this paper.

exchange, the knowledge fusion and the collaboration are
made, some values are created and they are expanded in
the society”. Figure 5 shows the expression of the IPM
model based on the knowledge creation and the application cycle. Yasiro says that the starting point of the innovation, “the starting point of the change”, can occur fromany process in Figure 5 and leads to the innovation
through a cycle of processes. In this example , it can beconsidered as an example that we start from “review andreconsideration” with the industry experts in Figure 5,
perform the current “definition of the issues and needs”,
perform “concept and solution creation”, and lead to“development of products, mechanisms, and services”
incorporating “technology development”. In comparison
to the linear Phase defined in this report, Yashiro’s IPM
model is considered as a higher-level concept. In theexample of this paper, since “the starting point of thechange” defined by Yashiro et al. is either “review andreconsider” or “definition of issues and needs” based on
the VOC at the operation site, it can be said that the definition of the linear process model is also applicable.
Yashiro also states that “being involved in the sameaction and the activity node is a necessary but not sufficient condition for the collaboration and interconnection
relationship to occur” and he values the conscious
involvement of the subject. It is important to create anode point with other people while considering thePhase, which is the point of this report.

ORGANIZINGTHE
THE POINTS
POINTS5.5. ORGANIZINGThere are obstacles between the Phases. In order toovercome these obstacles, "the specific activities" arerequired inside and outside the company. Also, in order tosecure the activities, we cannot sustain the activities
without the commitment and the support of the top organization.
It is difficult to carry out the activities in creating the
new value alone and the new human combination insideand outside the company that goes beyond the existingorganization becomes important.
Those who create a new business need to be aware ofwhich Phase they are in and it is necessary to overcome
the obstacles one by one while creating the nodes withother people. The top of the organization needs to flexibly
invest the resources (people, goods, money, technology,etc.) necessary to overcome the obstacles.

THEFUTURE
FUTUREDEVELOPMENTS
DEVELOPMENTS
7.7. THE

THECOMPARISONCOMPARISON WITH
6.6. THE
WITH THE INNOVATHE INNOVATION-RELATEDTION-RELATEDRESEARCHRESEARCH

The road sign maintenance support system (hereinafterreferred to as a maintenance support system), which is anextension of the inspection support system, has beendeveloped and the verification tests are now undergoing.
Figure 6 shows the work flow of the maintenance support
system. It is a solution that easily creates and maintains
the facility ledger of the road signs from scratch, combining the technology for the recognizing of the road signs
from drive recorder images using Artificial Intelligence (AI)that belongs to ZENRIN DataCom Co., Ltd. with the

Yashiro organizes the process of the innovation as an“Innovation Process Meta (IPM) model” in his book,Innovation and Management 2). In addition, by using theconcept of “value creation network”, the state of the subject group involvement and interconnection to the process is organized as “In each stage of the innovation process, various subjects (people and organization) are
involved, the information provision, the information

Current statusrenewalSocial change
Promotion of wealth,beneﬁt, amenity
and welfare

Eﬀect
evaluation

Review andreconsideration

Concept
Solution creation

Creation of richness
and fullness, beneﬁt,
amenity and welfare

Scientiﬁc discovery
Technology development

Implementationand operation
Knowledge, information
Flow of knowledge,
information and its products

Task
Deﬁne needs

Product, mechanism
Service development
Realization of
production

Flow of economic society events

Figure 5 Schematic diagram of innovation process Meta model.

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The Modeling of a New Business Creation Process Based on the Case of the Development of a Road Sign Inspection Support Systeminspection support system. Demonstration tests of thissystem were conducted with the cooperation of Nikko
City, Tochigi Prefecture, and it was confirmed that thesystem could be completed in about one-tenth the timecompared to the conventional manual inspection.
In the IPM model shown in Figure 5, after the inspection support system was “implemented and applied”,(a)Conventional“review and reconsider” were carried out and reached“definition of issues and needs”. As a result, the maintenance support system was developed. In the future, weplan to conduct an analysis based on the model presented in this paper for the example of maintenance support
system development.

This system

Implementer

Implementer

1. Investigate

Inspectors manually inspect andrecord the road signs in the area one
by one visually.

Localgovernment

Automatic recording of the video of roaddriving in the area with a commerciallyavailable drive recorder.

2. Create facility
ledgerManually create the facility ledger
based on the location information of
the road signs, whole view photos,
and the map of the location.

Local
government

ZenrinAutomatically create the facility ledger byidentifying the road signs using AI from the DataCom &drive recorder images.
FEC

3. Inspect the site

On-site inspection of the road signs
Local
while comparing the records using thegovernment
facility ledgers (often paper).

Read the facility ledger into the inspection
support system (tablet terminal) andinspect the road signs on site using AR.

Local
government

4. Create and output
the inspection
recordOrganize the photos of the road signs
Local
and manually copy the inspection
results, and create and output the
government
inspection records.

Photos of the road signs and theinspection work are automaticallyorganized, and the inspection reports are
created and output.

Local
government

Local
government(b)
1. Investigate

2-1. Create the facility ledger

3. On-site inspection

4. Create and output the inspection records

Record using drive recorder

Inspect the road sigs using AR

Extract the road signs using AI

2-2. Create the facility ledger

Load photos and location data

Organize the photo inspection results automatically

Example of the inspection record outputs.

Figure 6 Work flow of road sign maintenance support system.
(a) Comparison table (b) Work flow image

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The Modeling of a New Business Creation Process Based on the Case of the Development of a Road Sign Inspection Support System

CONCLUSION
8.8. CONCLUSION
Based on the development example of the road sign
inspection support system, six phases 0 to 5 were
defined as a new business creation process and modeled, and the following suggestions were obtained.
1. There are obstacles between the Phases, and “thespecific activities” are necessary to overcome the
obstacles inside and outside the company.
2. In order to secure the specific activities, the commitment and the support from the top of the organization
are essential.
3. It is difficult to create activities that create new value
alone, and the new human combination inside andoutside the company that goes beyond the existingorganization becomes important.
These Phases were compared with Yashiro’s IPM
model, and it was determined that the specified linear
process was valid in this example.
Those who create a new business need to be aware ofwhich Phase they are in and it is necessary to overcome
the obstacles one by one while creating the nodes withother people.

REFERENCES
1) Clayton M. Christensen, Taddy Hall, Karen Dillon, David S.
Duncan: “Competing Against Luck, The Story of Innovation andCustomer Choice”, Harper Collins Publishers, (2016).
2) Tomonari Yashiro: “Innovation and Management-Thinking fromthe Structuring of Processes and Organizations”, The Universityof Tokyo Press, (2016), 20 (in Japanese).

Furukawa Electric Review, No. 51 202017