Technology trends that will impact Indonesia in 2017 and beyond

Digital transformation (DX) will reach macroeconomic scale in the next two to three years, which marks the dawn of the ‘DX Economy’.

By Adrian M. Reodique
Jan. 27, 2017

Indonesian companies must now start to think of the relevance of their business in the next 10 years and formulate strategies to address disruption, according to IDC Indonesia.

Digital transformation (DX) will reach macroeconomic scale in the next two to three years, which marks 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," said Mevira Munindra, Research Manager in Consulting of IDC Indonesia, in a press release.

The research firm noted that enterprises will change the way they operate, which at the same time reshape the global economy when digital transformation reaches its macroeconomic levels.

"In Indonesia, DX 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. Timing is critical, and archaic thinking of riding-out trying economic times is no longer relevant, and should be addressed with process-led innovation," says Sudev Bangah, Country Manager 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," added Mevira.

In line, IDC revealed its top predictions that will make an impact in organisations in Indonesia this year and beyond:

  1. Majority of cities (90 percent) will fail to take full advantage of smart city data and digital assets this year, because of the lack of process, project management, and change management skills.   
  2. The lack of vision, credibility, or ability to influence will hinder 80 percent of IT executives to attain leadership roles in company's DX by 2018.
  3. Online brand ambassadors and social media influencers will have more marketing power than the traditional digital advertising by 2018, but it will subside through 2019 and forward.
  4.  Half of IT organisations will create new customer-facing and ecosystem-facing services by 2019 to meet needs of business for DX.
  5. The investments in DX will double by 2019, thus draw funds away from store capital and profoundly change the retail industry.
  6. Only 30 percent of manufacturers that are investing in DX will be able to maximise the outcome by 2019. The rest will be held back by outdated business models and technology.
  7. Local and regional government will use the Internet of Things (IoT) by 2019 to transform public infrastructures such as roads, street lights, and traffic signals into assets instead of liabilities.
  8. By 2019, cloud adoption can help top-tier banks reduce their infrastructure spending by 25 percent.
  9. Companies will use open innovation by 2020 to allocate expertise to 15 percent of new projects in order to increase their new product introduction success rates by over 50 percent.
  10. Nearly 20 percent of operational processes will be self-healing and self-learning by 2020, which minimises the need for human intervention or adjustments.