Not only about turning a traditional process into a digital one, the emergence of digital transformation has completely transformed the way businesses utilize the combination of technology and people to become more efficient. This form of disruption requires businesses to work up their digital capabilities and adapt new ways of working in order to fend off disruption and remain competitive.

What Digitization Has to Offer

Digitization can potentially unleash USD 150 billion of Indonesia’s annual economic growth by 2025. Increased productivity and lowered cost across sectors, opening opportunities and participation to all segments of the population are among the benefits on going digital. Accelerating Indonesia’s digital progress will require businesses to take the challenges and transform themselves.

Thus, digital transformation is the must-have investment across technologies, mind-sets, and business and operational models to improve work and competitiveness and deliver new and relevant value for customers and employees in this ever-evolving digital economy.

B2B Digitization Penetration in Indonesia

Indonesia is currently considered to be at a nascent stage of digitization with great digital potentials. Despite of its vibrant startup environment and active digital denizens, Indonesia still experiences a relatively low awareness and lags in embracing the benefits of modern technologies.

The global industrial internet is expected to grow more than double compared to consumer internet as a result of growing in big data and analytical tools requirement across industries. By 2025, industrial internet is estimated to reach USD 8.6 trillion and contributes 43% to total global economy. This growth will mainly be driven by changing business behavior across industries, in which the integration of big data and analytics tools will become a critical requirement to enhance business efficiency.

Below are some of the reasons behind why Indonesia is falling behind in  digitization penetration:

1. Authority, which makes businesses without board level IT department faces difficulties in pushing through ideas, thus higher barrier in digitization.

2. Budget, which indicates IT spending restriction on digital transformation caused by low budget allocation. 

3. Resistance, that shows businesses’ concerns on risks associated in transforming value chain and operations, despite increased productivity and lower cost as a result from digitization. 

4. Cheap labor, that creates higher resistance in shifting due to false belief in achieving greater productivity with more workers.

5. Connectivity, in which Indonesia is currently “ranked” 8th in the slowest connection worldwide, despite the need of high speed connectivity for digitization and IoT.

How to Rise Above the Challenges

To transform in digitization, the initial stage is to engage digital when dealing with B2B or B2C stakeholders, as this will create value and establish a more efficient multi-way communication flow. Envision and start planning on how to integrate digital technologies into your channel efforts in order to bring interactions along the value-chain and supply-chain to a unified platform.

Next, learn through the development of data pool and algorithms, while accurately capture significant data and information to enable machine learning. Based on these learning points, develop new business models, products or services that drive growth, and continuously test and validate new ideas with specific client profiles.

Depending on the business needs, use the technology to control patterns across various tasks, such as supply chain monitoring, or vendors and agents performance tracking. Utilize the findings to make decisions when adverse situations occur. Lastly, capitalize the digital strategy in other areas or functions to maintain consistency throughout the value chain.

The verdict: technology is easy. What is more important here is how to initiate and implement the change through people. Technology may enable change, but successful digital transformation relies on the resources, not the technology.