Digital transformation key to business success in Indonesia
Advances in technology have ushered in the “Fourth Industrial Revolution”, where cutting-edge technologies such as the Internet of Things, artificial intelligence, advanced data analytics, and mixed reality are powered by cloud computing to create limitless possibilities in transforming the way people work, live and play.
This revolution, together with rapid urbanization, emergence of the millennial workforce and a fragile global economic climate, is ushering in societal and economic changes at an unprecedented pace.
Business leaders in Indonesia are urgently embracing the Fourth Industrial Revolution, as 90% of them believe that they need to transform to digital business to enable future growth, and 88% agree that new data insights can lead to new revenue streams for their organizations. These are some of the key findings of the Microsoft Asia Digital Transformation Study to understand how business leaders are embracing the digital era.
The study surveyed 1,494 business leaders in Asia, including 113 in Indonesia. All respondents were pre-qualified as being involved in shaping their organizations’ digital strategy, and were working in firms with more than 250 employees.
The study was conducted in October and November last year involving business leaders in 13 Asia-Pacific markets, namely Australia, mainland China, Hong Kong, Indonesia, India, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand.
Even as a majority of Indonesian business leaders are aware of the urgent need to transform digitally to address the changing business climate, the study found that the transformation journey for most organizations was still at its infancy. In fact, only 27% of Indonesian business leaders have a full digital transformation strategy and 51% have one in progress, with specific digital transformation initiatives for selected parts of their business. Some 22% still have very limited or no strategies in place.
Four key pillars in Digital Transformation
Microsoft has defined what it means to transform in four key pillars.
- Engage customers: Consumers are savvier than ever before, with access to data ensuring they are often educated on a product or service before engaging. To stand out, organizations will need to deliver a new wave of deeply contextual and personalized experiences, while balancing security and user trust.
- Empower employees: The nature of how we work – and the workplace itself – has undergone a dramatic evolution. Organizations can empower their people and help them do their jobs better with the power of mobility, which allows employees to collaborate from anywhere, on any device, and access apps and data they need, while mitigating security risks.
- Optimize operations: Technology disrupters such as IoT are accelerating the potential for businesses to optimize their operations. This can be done by gathering data across a wide, dispersed set of endpoints, drawing insights through advanced analytics, and then applying those learning to introduce improvements on a continuous basis. Organizations in manufacturing, retail, and even healthcare can shift from merely reacting to events to respond in real time, or even pre-emptively anticipating and solving customer issues.
- Transform products and business models: The opportunity to embed software and technology directly into products and services is evolving how organizations deliver value, enabling new business models, and disrupting established markets.
Emerging technologies in demand
Cloud computing and the decreasing cost of devices have made it more affordable for companies of all sizes to transform digitally, according to 89% of business leaders in Indonesia surveyed. The majority of business leaders (85%) regarded cloud computing as essential in their digital transformation strategy.
Business leaders in Indonesia are interested in exploring a range of emerging technologies to accelerate and achieve digital transformation over the next 12 to 18 months, according to the survey. The top five technologies identified by as being relevant to them in Asia are:
- Internet of Things: Network of sensors embedded into devices that can collect data or be remotely controlled. Examples include smart buildings, cars and home devices.
- Wearable technologies: Advanced computing and electronic technologies that are embedded into clothing, devices or bodies. Examples include smart watches and fitness trackers.
- Artificial intelligence: Intelligent machines or software that are able to learn and perform tasks independently. Examples include robots, chatbots and self-driving cars.
- Quantum computing: Next-generation computers using different computation systems to solve data equations much faster than traditional computers.
- Virtual/augmented/mixed reality: Technologies enabling the merging of real and virtual worlds into new and immersive experiences.
While there is no doubt that digital transformation will bring significant benefits for both businesses and employees, the path to digital transformation has been slow, given that only 27% have a full digital strategy in place. According to business leaders in the study, the top five barriers to digital transformation are, in order of priority:
- Cyberthreats and security concerns
- Lack of digitally skilled workforce
- Not having the right technology partners
- Uncertain economic environment
- Lack of supporting government policies and ICT (information and communications technology infrastructure
The increase in security threats in today’s digital economies is real and cannot be ignored. There is a continued perception among business leaders that the cloud is less secure. However, they may be less privy to the advances being made in the cloud on security and privacy and need more exposure on how, with the current threat environment, it will be safer being in the cloud than relying on tradition forms of information technology.
In fact, a recent Microsoft Asia Pacific survey of 1,200 IT leaders showed that 95% of Indonesia leaders believe that in the longer term, the cloud will be safer.