27 May 2019, JAKARTA: Indonesian business leaders view their digital transformation progress and abilities as among the best in the world, yet require greater focus on people as they struggle to deliver financial benefits driven from their programs.
These were among key findings of Telstra’s Disruptive Decision-Making research, which surveyed 3,810 senior decision-makers from 12 industries in 14 markets around the world, including 350 in Indonesia, to uncover insights into strengths and weaknesses around digital transformation programs and decision-making.
Indonesian optimism has strengths and weaknesses
Indonesian businesses believe they are more advanced in their digital transformations than international counterparts, with survey respondents ranking their nation third globally. More than a quarter (26%) of Indonesian businesses described their company as digitally ‘highly mature’, compared to an average of 21% globally.
Local organizations also have more confidence in their abilities than global peers, with 27% of Indonesian business leaders reporting their organization makes digital transformation decisions ‘extremely well’, above the global average (23%).
Telkomtelstra’s President Director Erik Meijer said there are both opportunities and challenges in this optimism.
“As digital disruption accelerates at an unprecedented rate, the way in which Indonesian companies respond has become critical to their future. Digital transformation is no longer a maybe, it’s a necessity. The conversation has shifted from ‘why’ digitization is important, to ‘how’ it can be successfully implemented,” Mr. Meijer said.
“Indonesian businesses are confident in both their approach to digital transformation and the progress of their programs, and this optimism will help drive investment and company buy-in for these vital programs.
“However, this confidence must be balanced with the realities of the Indonesian digital ecosystem. For example, Telstra and the Economist Intelligence Unit’s (EIU) Asian Digital Transformation Index last year ranked Indonesia 11th out of 11 markets for nation-wide digital capabilities and environment.”
“To ensure regional and domestic competitiveness, companies must be wary of over-stating progress and underestimating the complexity of the transformation project.”
Booming Investment Demands Focus on Financial Outcomes
The good feeling around digital transformation is driving significant investment. A third of local companies (33%) invested more than US$500,000 in digital transformation products and services over the past year, while almost one in 10 (8%) spent more than US$5 million.
That investment is set to increase with four in ten (40%) of Indonesian organizations expecting their company’s total spend on digital transformation to increase by more than 10% in the next three years – above global levels (32%).
Yet the Disruptive Decision-Making research found that, while organizations in Indonesia are increasing their investment in digital transformation at a greater pace than global peers, many businesses had yet to realize the financial impact of their investments.
When it came to measuring the impact of digital transformation, showing financial returns of this investment was difficult. When ranking the effectiveness of digital transformation outcomes, increased profit margins and streamlined business costs ranked as two of the bottom three results.
Focus needs to shift from technology to people
To understand how to achieve these goals, the research asked respondents to rate their digital decision-making ability across four factors for success – people, processes, technology understanding and partnerships.
Indonesian businesses ranked ‘technology understanding’ as the area where they have the most ability in digital transformation, and people last.
Yet the research showed the most successful global organizations take a different approach. The most digitally advanced companies around the world show a greater focus on people and processes than technology as an enabler.
“Digital transformation is technology-enabled, but must be people-led,” Mr. Meijer said. “However our report shows employees are not being given the attention they warrant in Indonesia.
“Our Connecting Commerce research we released last year with The EIU revealed that a shortage of ‘people and skills’ is Jakarta’s toughest digital challenge, and this year’s Disruptive Decision-Making report shows that successful organizations know that it’s their employees who are driving success.
“Digital transformation relies on more than the right technology – it requires the right culture, the right people and the right processes to support them. Successful digital transformation must be a company-wide journey that involves upskilling employees, adapting structures and ways of working, and creating teams that can maximize the new technologies being introduced.”
About Disruptive Decision-Making
The research study was commissioned by Telstra and comprises quantitative research conducted by market research firm Kantar TNS in 14 markets around the world, surveying 3,810 senior decision-makers. This was supplemented with qualitative interviews with 14 senior executives across a range of industries. Respondents were asked about their organisation’s digital transformation decision-making ability and their effectiveness in achieving business outcomes. Those taking part in the research were people leading digital transformation projects within organisations primarily the heads of business, CIOs, business unit/division management, as well as chairpersons and CEOs. For more insights, visit www.telstraglobal.com/disruptive-decision to download the Disruptive Decision-Making white paper.
About Telkomtelstra
Telkomtelstra is a joint venture company between PT. Telekomunikasi Indonesia (Telkom Indonesia) which is the largest telecommunications company in Indonesia, with Telstra Corporation Limited (Telstra), which is a leading company in technology and service in Australia.
Telkomtelstra provides a portfolio of leading technology products and solutions such as Managed Network Services, Managed Security Services, and Managed Cloud Services to help improve digital transformation in Indonesia. Through an understanding of the local market and the experience of providing world-class managed solutions services, Telkomtelstra has succeeded in supporting Indonesian companies to utilize managed solution services to improve business efficiency and productivity.
Media Contact
Sakkan Abram
Marketing Communication Manager
E-Mail: sakkan.abram@telkomtelstra.co.id