The Surge in “Subsidy-Compatible SaaS”
Announcements of SaaS tools compatible with regional DX initiatives in Nagano Prefecture’s Takamori Town and Iida City, as well as subsidies for digitalization and AI adoption in fiscal 2026, are coming in rapid succession. Tools like “i-Reporter” and “Moromi Diary Cloud” have been registered as eligible for subsidies, seemingly lowering the barrier for small and medium-sized enterprises (SMEs).
However, this is where business leaders need to pause. Is a decision to adopt a tool simply because a subsidy is available truly the right one?
The “Means Becoming the End” Created by Subsidies
The subsidy system reflects the direction set by national and local governments: “We want you to adopt this kind of IT.” In other words, tools eligible for subsidies are merely those that the government has deemed “good.”
The problem arises when companies choose IT based on the subsidy framework, regardless of their own management challenges. This leads to “dead storage of IT”—tools that are adopted but never used on the front lines or don’t fit the actual workflow.
“i-Reporter” is a tool that streamlines on-site reporting. It’s certainly effective in many situations. But what your company’s front line truly needs might be the digitalization of a completely different task.
Three Risks of “Borrowed Management”
We call IT adoption driven primarily by subsidies “borrowed management.” This refers to an attitude of relying on external systems rather than making independent management decisions.
Risk 1: Fragmentation of Objective Functions
Systems adopted to meet subsidy conditions often lean toward “management IT.” Subsidy requirements frequently demand “implementation records” or “operational track records,” which tend to overlook the perspective of “business IT”—such as sales growth or new business creation.
As a result, a significant gap emerges between the growth strategy sought by management and the systems used on the ground. This accelerates the “fragmentation of objective functions,” where the purpose of IT investment becomes disjointed across departments.
Risk 2: Postponing True Problem-Solving
When adoption is decided because “a subsidy is available,” the essential tasks of reviewing business processes and formulating an overall digitalization strategy for the organization are often postponed.
For example, even when digitizing billing operations, simply introducing a system only achieves half the effect. A complete redesign of the entire workflow is necessary—including invoice approval flows, data integration with business partners, and the division of roles within the accounting department. There’s a risk of skipping this essential step due to pressure from subsidy deadlines.
Risk 3: Ongoing Costs After Subsidies End
Subsidies are fundamentally “adoption support.” In most cases, they only cover the initial costs or a portion of the running costs for the first year. From the second year onward, the company bears the full cost.
It’s not uncommon for the maintenance costs of a system adopted casually “because of a subsidy” to strain management a few years down the line. Furthermore, many SaaS products eligible for subsidies are relatively new services, and their track record for long-term operation may be unclear.
How Business Leaders Should Approach Subsidies
We are not denying the value of subsidies. Used wisely, they can be an effective way to lower the barrier to IT investment. However, leaders must clearly recognize that subsidies are a “means,” not an “end.”
Step 1: Articulate Your Company’s Management Challenges
Before looking at subsidy information, first write down your company’s management challenges. Set specific goals like “increase sales by 20%,” “reduce overtime by 10 hours per month,” or “improve customer satisfaction.”
Without clear goals, you cannot determine what IT to adopt. The selection criteria should be whether a tool is optimal for solving your company’s challenges, not whether it’s eligible for a subsidy.
Step 2: Organize Using the Three IT Categories
As mentioned earlier, there are three types of IT: “Business IT,” “Management IT,” and “Administrative IT.” Subsidies are often particularly effective for adopting “Administrative IT” and “Management IT.”
For instance, “Moromi Diary Cloud” is a type of “Administrative IT” that digitizes daily report management on the manufacturing floor. Tools like this, focused on operational efficiency, are an area where subsidies can be easily leveraged.
On the other hand, “Business IT”—such as launching new ventures or automating marketing using customer data—tends to be harder to evaluate within the subsidy framework. Understanding this difference is key to making decisions about which areas to fund with subsidies and which to invest in independently.
Step 3: Plan for Post-Adoption Operations
Before applying for a subsidy, create a concrete operational plan for after the tool is introduced. Without deciding “who will operate it,” “how much time it will take,” and “what KPIs will measure its effectiveness,” you risk the project ending with the adoption itself.
SMEs, in particular, often lack IT personnel. You need to estimate who will handle post-adoption operations, whether external support is needed, and the overall cost-effectiveness.
True IT Strategy Begins with Management Decisions
The fact that “i-Reporter” and “Moromi Diary Cloud” are now eligible for subsidies is good news for SMEs. However, when leaders think about IT strategy, the first place to look is not the list of subsidies.
First, articulate your company’s business strategy. Next, define the IT needed to realize that strategy. Then, consider how to fund that IT adoption, including subsidies. This order must not be reversed.
Companies that break free from “borrowed management” that relies on subsidies, and instead choose and master IT based on their own will, will be the ones that survive and thrive in the digital age.
IT is a management resource that leaders must define for themselves. The challenge now is to stop resting on the “prepared table” of subsidies and to reframe IT investment as a core management decision.
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