IDC predicts that by 2020, Indonesia will become the largest digital economy in Southeast Asia with a market valuation of $130 billion. Key to this transformation will be the central role of technology as enabler of enterprises’ digital strategies.
IDC urges enterprises to scale up and accelerate innovation as digital transformation (DX) attains macroeconomic scale in Indonesia. Despite the continuous initiatives from the local government to support the development of digital economy such as 1000 Technopreneurs and the eCommerce Road Map, the lack of infrastructure and limited DX talent pool remain as the challenge for DX acceleration among the local enterprises.
Mevira Munindra, head of consulting IDC Indonesia noted that only 8% of local enterprises have embarked on DX journey and experienced the full benefit of DX. Enterprises in Indonesia are still at the stage of exploring for potential technologies and business models.
“Business leaders must understand that in order to lead in the DX economy, enterprises must become digitally-native. Enterprises should leverage on emerging technologies and rapidly integrate them into their organization’s strategy as they evolve,” she added.
It is here that the telecoms sector will play a crucial role as enabler of enterprises’ DX transformation initiatives.
Munindra commented that the country’s telecoms providers are striving to be digital transformation partners for consumers and businesses in Indonesia.
“If we are looking at the key products of telecom industry, beside connectivity, most of organizations are competing and focusing in non-telco products like cloud, data center, directly or through its subsidiaries. Emerging technologies like Internet of Things and AI are determined as potential interest to be focusing at in 2018 and beyond. Internally, we see that the key areas for telecom industry are network infrastructure, security and analytic,” she added.
ICT Spending in Indonesia is expected to reach 443 trillion rupiah ($32.5 billion) in 2018. IDC revealed the key technologies for 2018 and beyond required for business leaders to make strategic decisions and stay ahead in an ever-changing digital ecosystem.
“Indonesia has shown an incredible progress in the overall digital ecosystem and we see more local organizations are becoming digitally-capable. The innovation intensity is increasing, so we expect more organizations to place digital transformation (DX) as a core strategy to their business. Business leaders should embrace technologies so that they don’t miss out clear opportunities with the rise of new digital transformation economy,” IDC ASEAN managing director Sudev Bangah said.
IDC revealed the top technology predictions for 2018 and beyond that will make the biggest impact to organizations within the country.
#1 Digital economy tipping point: By 2021, at least 40% of Indonesia GDP will be digitalized, with growth in every industry driven by digitally-enhanced offerings, operations and relationships; by 2021, investors will use platform/ecosystem, data value, and customer engagement metrics as valuation factors for all enterprises.
#2 DX Platforms: By 2021, 20% of all enterprises will have fully articulated an organization-wide digital transformation (DX) platform strategy and will be in the process of implementing that strategy as the new IT core for competing in the digital economy.
#3 Cloud 2.0: Distributed and Specialized ― By 2021, enterprises' spending on cloud services and cloud-enabling hardware, software and services will reach $266 million, leveraging the diversifying cloud environment that is 10% at the edge, over 15% specialized (non-x86) compute, and 30% multi-cloud.
#4 AI everywhere: By 2021, 10% of digital transformation initiatives will use artificial intelligence (AI) services; by 2021, 20% of commercial enterprise apps will use AI, over 30% of consumers will interact with customer support bots, and over 5% of new industrial robots will leverage AI.
#5 Hyperagile apps: By 2021, enterprise apps will shift toward hyper-agile architectures, with 15% of application development on cloud platforms (PaaS) using microservices and cloud functions (e.g., AWS Lambda, Azure Functions), and over 25% of new microservices deployed in containers (e.g., Docker).
#6 HD interfaces: By 2021, human-digital (HD) interfaces will diversify, as 10% of field-service techs and over 10% of info workers use 30% of new mobile apps use voice as a primary interface and 5% of consumer-facing Indonesian enterprises use biometric sensors to augmented reality, nearly personalize experiences.
#7 Blockchain and digital trust: By 2021, at least 10% of the Indonesian enterprises will use blockchain services as a foundation for digital trust at scale; by 2020, 20% of banks and 20% of supply-chain organizations will use blockchain networks in production.
#8 Everyone a data provider: By 2020, 15% of Indonesian enterprises will generate revenue from data-as-a-service ― from the sale of raw data, derived metrics, insights, and recommendations ― up from nearly 2% in 2017.
#9 Everyone a developer: Improvements in simple ("low-/no-code") development tools will dramatically expand the number of non-tech developers over the next 36 months; by 2021, these nontraditional developers will build 10% of business applications and 20% of new application features (50% by 2027).
#10 Open API ecosystems: By 2021, more than half of the Indonesian enterprises will see an average of 20% of their digital services interactions come through their open API ecosystems, up from 5% in 2017 ― amplifying their digital reach far beyond their own customer interactions.
“Global and regional players will influence how telecom operators in Indonesia develop their businesses and penetrate the market due to their experience, expertise and influence on Indonesian customers. Yet, understanding local customers becomes more important too these days and that will effect on how telecom operators design their businesses and products to acquire customers and provide impressive customer experience in the market,” concluded Munindra.