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IT plays a pivotal role in Indonesia's trillion dollar economy

Publication Date : 31-07-2014

 

 As Indonesia turns a new page with the recent conclusion of the hotly contested presidential election, anticipation is rife on how the newly elected president will approach the economy.

From an IT perspective, much has been touted about the “openness” of the president-elect in terms of investing in IT as a potential game changer in evolving and easing the lives of people across the country.

While it remains to be seen how the incoming administration will handle IT as an agenda for the country, there is no denying how much it is needed.

International Data Corporation (IDC) Indonesia recently conducted a survey among major enterprises on their future IT utilisation, and while 57 per cent of those surveyed said they were increasing their IT spending, buzzwords such as “transformative” and “new technologies” were loosely thrown about to describe the future of their spending.

If you were to examine economies across Asean, you would find the very same terminologies and/or words used within these markets as well — but has Indonesian enterprises truly grasped the concept?

Our survey shows a slightly opposite trend from what is being talked about in the industry — and while it is keenly acknowledged that IT is going to play a pivotal role in everyday business, survey results show that more than 40 per cent of enterprises are not sure how “new technologies” are going to help their enterprise “transform” — but they are pretty sure they want them.

So is this ultimately a good trend? It seems that at present, plenty of organisations see it as purely that — a trend. It also seems that Indonesia as a whole is always rocked by trends, whether in electronic consumer devices, IT gadgets or enterprise adoption of IT — a trend is always what should be followed.

While this is not necessarily a bad thing, it does indeed beg the question of how much money has to be wasted before the true essence of “transformation” is met to the expectations of these enterprises.

“Customer centricity” is another buzzword thrown about in the enterprise sphere, and as Indonesia’s economy pushes past the US$1 trillion mark, they are starting to recognise the need for keeping existing customers and growing their current base across geographies.

This begs the question of whether Indonesian enterprises are indeed too domestic-centric, as we have certainly not noticed much Asean Economic Community (AEC) jitters in the country.

Are enterprises truly ready for the advent of this reality beginning in 2015?

Our surveys continue to show the opposite, with many businesses not being overly concerned about the AEC or the potential impact it may have on competition.

Perhaps it is an understated concern, but in reality, it should be a large concern for many of these firms when competition starts creeping into their markets.

Enter IT, and the whole idea that IT is going to “save the day” for these enterprises when the competition starts to pile on.

So perhaps, this is what is causing the trend at present — where organisations feel the need to transition toward IT-based solutions, to grow efficiencies, achieve better productivity levels and save on costs.

IDC Indonesia’s survey made an encouraging revelation, where “cost savings” are no longer the number one concern for these organisations in the adoption of IT. However, the need to achieve efficiency within their business is — and in IDC’s lexicon, we dub them the “optimisers”.

With all this in mind, IDC Indonesia is optimistic that the eventual goals of businesses will be achieved once they manage to get their heads around what they actually require from IT.

Statistics have come back showing that CEOs at Indonesian enterprises these days are becoming bigger advocates of IT, and essentially are the major proponents in pushing IT departments into looking at how IT can help achieve business-related outcomes and goals.

However, expectations between the two departments still currently meet at a somewhat mismatched level.

We anticipate that these two major parts of the organisation will eventually come together over the next couple of years, as more “transformative” IT projects start being implemented, localised case studies start emerging and actual value/ROI (return on investment) is felt.

This will help enterprises fall into an innovation cycle, and the continuous innovation cycle is what is required to continue to drive Indonesia’s gross domestic product (GDP) to greater heights.

 

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