How Indonesian CIOs can maximise digital investments

Irrespective of size, stature or sector, almost every organisation is undergoing a technology-driven business transformation in Indonesia.

Legacy systems are being replaced with modern infrastructure; housing innovative solutions designed to create new advantages in a market crammed with competition.

Such a shift places the CIO at the centre of transformational change, with digital technologies the weapon of choice to maximise investment potential in 2020.

As Indonesia encourages digital transformation projects and increased Internet of Things (IoT) adoption to realise the vision of ‘Making Indonesia 4.0’, Amit Midha, president of Asia Pacific and Japan and Global Digital Cities at Dell Technologies, observed three key trends taking place across the country.

“The first is the continuous growth of data and how businesses are harnessing it for insights to create better customer experiences,” said Midha, when addressing an audience of Indonesian technology executives during Connected CIO in Jakarta.

“In fact, the growth of data has been massive. In 2007, all the cellular companies in US transmitted or carried about 87 petabytes of data. Now, it’s 52,000 times that in 12 years. This data tsunami will make knowledge and talent in this area become more important than ever.”

Secondly, Midha acknowledged that cloud is becoming “more important” as more businesses embark on a multi-cloud journey, with Indonesia no exception. Within the next five years, 40 per cent of local businesses will mitigate lock-in through multi-cloud, according to IDC.

“With the combination of cloud and data, businesses are looking for better ways to manage the complexity that comes with it,” he added. “Questions around cloud economics will come along as more businesses seek to understand how to manage and predict the costs of cloud.

“The third trend is to use technology for good. As technologists, we have a responsibility to ensure that technology reflects our humanity. Moving forward, every business need to ensure that technology and data combined with human spirit will drive positive forces in the world.”

Citing IDC research, IT spending in Indonesia reached IDR 465 trillion in 2019 with the digital economy beginning to take shape at a national level. By 2022, more than 61 per cent of the country GDP will be digitalised, driven by “growth in every industry”.

“Digitalisation is not confined to just one part of the enterprise, nevertheless, it is transforming major aspects of enterprises’ offerings, operations and relationships,” said Mevira Munindra, head of operations at IDC Indonesia. “These new technologies are changing paradigms for individuals, businesses, industries, economies and governments.

“We see local enterprises continue to become more competitive in driving and accelerating digital transformation in their organisation because IT and business leaders have started to acknowledge more of the digitalisation’s benefits in the corporate strategy.”

Digitalisation in Indonesia

Munindra, armed with IDC research, believes that the digitalised economy will lead to “intense competition”, especially when the digital disruptors are “heavily penetrating” into the Indonesian market.

Furthermore, 3rd platform technologies such as cloud, big data and analytics, social and mobility – in addition to innovation accelerators such as artificial intelligence (AI), security and IoT – are becoming the key enablers in driving “multiplied innovation” in digital transformation for enterprises in Indonesia.

“The race to innovate, accelerate and reinvent the future of enterprises has begun,” added Sudev Bangah, managing director, IDC ASEAN. “In order to lead in the competitive digital transformation economy, enterprises must be agile, adaptable and cognisant to market and customers trends, business models and technologies that are emerging in the market.

“New technologies should be adopted as business benefits become more obvious and clearer. This will enable business leaders to achieve their business goals in a competitive digital ecosystem.”

Within the next three years, 50 per cent of all IT spending will be on 3rd platform technologies with over 50 per cent of Indonesian enterprises building “digital-native” IT environments to thrive in the digital economy.

“Digital transformation means to put digital at heart, powered by data and running in a multi-cloud world,” Midha explained. “Digital disruption brought about by emerging technologies as well as technology shifts such as AI and machine learning and the uptake of cloud has changed the way businesses are done.

“We will see an even more dramatic shift, especially with the combination with edge computing, IoT – all of this will create more data and the cumulative effect is tremendous.”

In Indonesia, Dell Technologies’ research found that only six per cent of businesses are classified as ‘Digital Leaders’, the equivalent of having digital ingrained in their DNA.

“As we move into the data decade, we expect that Indonesian organisations will continue to seek creative technology solutions to deliver on business outcomes and customer experiences,” Midha said.

Overcoming roadblocks

Despite the direction of digital travel being clear, Midha – in overseeing the strategic direction of Dell Technologies in Asia Pacific – acknowledged that in Indonesia, challenges remain which continue to prevent CIOs from instigating change.

“For one, the lack of talent and workforce transformation to help harness the potential of data is holding back changes,” Midha highlighted. “Other than developers, data scientists play an equally important role for businesses to transform digitally.

“So, what we’re trying to do is to create technologies in which customers can experience new technologies directly. This is why we created five AI Experience Zones across the Asia Pacific and Japan region where customers can come and train their people on how to use AI for their businesses.”

The second roadblock, according to Midha, centres around ensuring both “quality and quantity” in data.

“The more data we feed into an AI system, the more accurate and better the analysis and predictions,” he outlined. “However, with the huge influx of data, how do we manage data in a cost-effective manner? That is the third challenge.

“Most importantly, all of this data would mean that there’s a higher need to ensure privacy and security of all the data that’s being managed.

“The last is people’s resistance to change. People are naturally more cautious when it comes to new technologies. With the increasing complexities, there’s a lot more risks that businesses have to consider.”

Innovation in action

One example of innovation in action is Dell Technologies’ work in the Indonesian transport sector, through collaboration with Integrasia Utama, which focuses on IoT to enable and accelerate adoption of ‘Industry 4.0’ in organisations.

The Jakarta-based business wanted to build on the success of its logistics system for fleet management with a multimedia entertainment solution for buses and trains that could stand alone or be integrated with the logistics system.

As a result, Integrasia Utama worked with Dell Technologies’ OEM | Embedded & Edge Solutions to support software One Spirit Multimedia Entertainment (OSME) and OSME Plus.

“With the OSME Plus version, data about the buses is collected on the PC and transmitted by a modem up to the Integrasia Utama private cloud,” Midha explained. “From there, information is sent to the bus companies’ control centres for analysis.

“The data includes the position of the bus and its speed and allows bus companies to set preventive maintenance reminders. With this, customers can now gauge how long routes are taking and how well the bus is being driven.”

Since the collaboration started, Integrasia Utama has saved at least three months in development time for the OSME solutions. Through such savings, the business also brought OSME and OSME Plus to market faster and reduced development costs by 20 per cent.

“Regardless of the industry, CIOs need to first consider the modernisation of their IT by making their infrastructure scalable, cost-effective and reliable,” Midha advised. “This is especially important if businesses want to implement application transformation.

“Without the infrastructure first sorted, you cannot get to the application layer – where businesses then need to consider which are the ones they are going to retire, which to migrate and which ones to modernise right now.”

Another important consideration is security, cautioned Midha.

“No matter which application, device, cloud or storage is, you need to ensure that you have a robust security system in place to fully tap on the benefits of digital transformation,” he added.

In assessing the Indonesian market, Midha said businesses today are no longer setting aside “huge investments for expensive hardware upgrades or long-term contracts”, citing a change in buying patterns at enterprise level.

“To maximise their investments, businesses need to look for new consumption models and as-a-service offerings such as Dell Technologies on Demand that deliver on-demand and consistent infrastructure and services to businesses of any size,” he said.

“This way, they can choose how they consume and pay for IT solutions that meet their needs with the freedom and flexibility to evolve as their needs change over time.”