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Digital transformation and what it means for Indonesia

23 Jan 2017

Digital transformation will attain macroeconomic scale in Indonesia over the next 2-3 years, according to new predictions from IDC.

The analyst firm says this will change the way enterprises operate and reshape the global economy. IDC calls this as the dawn of the DX Economy.

"As digital transformation reaches macroeconomic levels, a DX economy will emerge and will become the core of what industry leaders do and operate," says Mevira Munindra, research manager, Consulting of IDC Indonesia.

"Essentially, to succeed, Indonesian enterprises must begin to think of the relevancy of their business in 10 years, and how they should react in the face of disruptive forces,” Munindra explains.

Munindra also revealed the strategic top predictions that will unfold in 2017 and beyond and make the biggest impact to organisations in Indonesia:

1. By 2019, 50% of IT organisations will create new customer-facing and ecosystem-facing services to meet the business DX needs.

2. By 2018, lack of vision, credibility, or ability to influence will keep 80% of IT executives from attaining leadership roles in enterprise DX.

3. By 2020, Indonesian firms will use open innovation to allocate expertise to 15% of new projects, aiming to increase their new product introduction success rates by over 50%.

4. By 2020, nearly 20% of operational processes will be self-healing and self-learning — minimising the need for human intervention or adjustments.

5. By 2018, online brand ambassadors and social media influencers will have more marketing power than traditional digital advertising, although this will subside through 2019 and beyond.

6. By 2019, digital transformation investments will double, drawing funds away from store capital and profoundly changing the retail industry.

7. By 2019, only 30% of manufacturers investing in digital transformation will be able to maximize the outcome; the rest are held back by outdated business models and technology.

8. By 2019, cloud adoption will reduce infrastructure spend by 25% among top-tier banks.

9. By 2019, 20% of local and regional governments will use IoT to turn infrastructure like roads, street lights, and traffic signals into assets instead of liabilities.

10. By 2017, 90% of Indonesian cities will fail to take full advantage of Smart City data and digital assets due to a lack of process, project management, and change management skills.

"In Indonesia, Digital Transformation is still not adequately represented within the enterprise, and this disparity in leadership will lead towards a delayed response towards market changes that will adversely impact business,” says Sydev Bangah, country manager at IDC Indonesia.

“Timing is critical, and archaic thinking of riding-out trying economic times is no longer relevant, and should be addressed with process-led innovation," Bangah  adds. 

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