Business Environment

Indonesia's system integration industry【2020s have a tailwind for Making Indonesia 4.0】



Benefits of introducing a business system that is difficult to evaluate with numerical data

The corporate philosophy drafted at the time of establishment of the company may have already become a skeleton, but it is still the basic spirit that brings the company back to its roots in the event of a major crisis or a major change in the corporate environment.

【Definition of Corporate Philosophy】

  • The company's founding philosophy, the company's unchanging values, and the reason for its existence and purpose.

For example, our company's corporate philosophy is to "transform the efforts of the field into the company's competitiveness through the power of systems", and we aim to improve business efficiency and effectively use information by systematizing various work flows for each customer and operating them in the field, thereby creating the company's competitiveness.

The other day, I had the opportunity to exchange opinions with JETRO (Japan External Trade Organization) about IT investment by Indonesian SMEs, and they raised an important issue related to the existence value of system integrators, such as "How can we explain the cost benefits of system investment?".

We interviewed Batera Hisistem, which manufactures and sells ERP (integrated mission-critical systems for inventory management, production management, etc.) and other products to Japanese manufacturers in Indonesia, about its business and efforts to expand its sales channels (January 14).

The cost benefits of capital investment can be quantitatively explained on the basis of volume and yield, but in the case of system investment, it is difficult to explain it on the basis of numerical data.

However, if operational efficiency is improved, work hours are reduced, and the wage rate, which is the cost per unit of time, is lowered, the cost savings can be explained quantitatively.

【Benefits of introducing a business system】

  1. Cost reduction by improving operational efficiency in the field
  2. Effective use of on-site information by making it visible, shared, and systematized.

As a system integrator in Indonesia, we have an awareness of the value of our company's existence, and although we are troubled every day, we are always moving, listening, starting something, and repeating this process of trial and error, but we believe that our corporate philosophy should be able to answer the core questions related to the value of our company's existence.

There are few system integrators in Indonesia.

A system integrator (also called SIer S.I.R.) is "a person who integrates systems" and refers to a contractor who undertakes work around a company's systems in one package.

In the mid-1990s, when I was narrowing down my job search to IT companies as the first fresh graduate, the IT industry was in the heyday of the temporary staffing business, and the reckless way of sending newly hired amateurs to customers to learn practical work while charging them for the number of man-hours and months was rampant, and the criterion for determining whether a company was a white company or not was whether it was a "Ministry of Economy, Trade and Industry certified system integrator" or not.

In the past 20 years, some Japanese SIers have repeatedly moved into Indonesia and withdrawn from the market, but the reason for this is that the scale of the SI market itself was small due to the reluctance to invest in IT under Indonesia's current laws, the difficulty of securing local human resources, and the rise in fixed costs such as labor costs made it impossible to retain expatriates with technology.

The first wave of Japanese SIers entering and exiting Indonesia was in the early 2000s, and the second wave is around 2010, which is a 10-year cycle. Therefore, I think there will be new Japanese SIers entering or re-entering Indonesia from 2020.

I heard that in 2019, Japanese SI and AI-related companies will be more active in Vietnam, where the market size is smaller than in Indonesia, and the number of Japanese packaged software agencies is overwhelmingly large, but this year, unlike the past two times, Indonesia will be boosted by the demand for Making Indonesia 4.0, the Indonesian version of Industry 4.0, so I think there is a good chance that the Indonesian SI industry will come back to life with the third time's honesty.