Articles

Organizational Readiness for Change and Design using Galbraith’s STAR Model: A Case Study of Digitalization at a Small and Medium Enterprise (SME)

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This study investigates the organizational readiness for digitalization within a Small and Medium Enterprise (SME) in the Indonesian apparel sector, specifically CV XYZ, which faces sales stagnation due to its reliance on traditional offline channels. Utilizing a qualitative methodology, the research employs in-depth interviews and Focus Group Discussions (FGDs) with key stakeholders to assess readiness and identify necessary organizational design interventions. The theoretical analysis is grounded in Weiner’s theory of organizational readiness and Galbraith’s Star Model. The findings reveal a critical dichotomy in the firm’s readiness: while the organization exhibits high change valence—driven by a strategic recognition of e-commerce as essential for market expansion—it suffers from low change efficacy due to significant gaps in technical competencies and digital literacy. The application of Galbraith’s Star Model highlights specific misalignments, particularly in structure and leadership, which currently hinder digital agility. The study concludes that to successfully implement digitalization, the organization must move beyond mere asset acquisition to focus on capability building. Strategic recommendations include the implementation of “structural differentiation” to create a distinct online marketing division, the appointment of a specialized digital manager to bridge the leadership gap, and a prioritized investment in tiered human capital training over immediate financial incentives. These insights provide a practical framework for SMEs transitioning from traditional operations to digitally enabled business models.

IDCloudHost Digital Business Strategy for Digitalizing MSMEs in Indonesia

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MSMEs are a segment of entrepreneurs with the largest number in Indonesia. MSMEs are the backbone of the Indonesian economy today. During the Covid-19 pandemic, MSMEs were affected by the pandemic so that the Indonesian economy weakened until a recession occurred. The government sees a solution based on this condition to restore and recover the economy, by restoring MSME players so they can boost the Indonesian economy again. The government considers that MSMEs need to digitize to restore trade conditions, as well as so that MSMEs can upgrade and survive in uncertain conditions. The Ministry of Cooperatives and SMEs encourages MSME businesses to digitize by asking IDCloudHost as a cloud and hosting service provider in Indonesia to help the government digitize MSMEs. The purpose of this study is to explain IDCloudHost’s internal and external factors and explain IDCloudHost’s business strategy in digitizing MSMEs in Indonesia. The method used is descriptive qualitative research method. The results show that IDCloudHost’s external and internal factors are summarized into strengths, weaknesses, threats and opportunities. IDCloudHost is currently carrying out a cost leadership strategy in reaching the MSME segment. Recommendations and action plans for IDCloudHost include developing knowledge and understanding in strengthening the management structure, innovating and developing special products for MSMEs that are affordable, and conducting digital literacy education for MSMEs for digitalization.

Recent Evidence on the Digitalization Process in Indonesia’s Micro and Small Enterprises

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The digital transformation process in micro and small enterprises (MSEs) in Indonesia is still a black box, and existing findings regarding digitalization in this business group are still very limited and fragmented. Considering the above background and the important contribution that MSEs can make to the economy and employment opportunities, as well as poverty alleviation in Indonesia, this paper aims to examine the current progress in the transition process from analog/conventional technology to digital technology (DT) in Indonesian MSEs based on the latest secondary data from the Central Statistics Agency (BPS), and primary data collected from online surveys. The finding suggests that although there has been progress in recent years, as demonstrated by the increasing number of MSEs using the internet, Indonesian MSEs still lag in the adoption of digital technology.

Improving the Performance Management System for Power Plant Operators in Caprycoal Mining Company

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Caprycoal Mining Company, located in East Kalimantan, Indonesia, strives to be a leading coal supplier. The performance management system of Caprycoal Mining Company for power plant operators is the subject of this research, which critically evaluates and suggests a redesign. It incorporates the Resource-Based View (RBV), Performance Management Theory, Goal-Setting Theory, and Management by Objectives (MBO), focusing on strategic resources, clear objectives, and structured management. Using Soft System Methodology (SSM) and semi-structured interviews, significant gaps were identified, such as the lack of Key Performance Indicators (KPIs) and mechanisms for managing competency data. Existing training programs were unstructured and misaligned with operational demands. The study proposes a comprehensive overhaul, including a structured KPI framework based on SMART goals aligned with organizational objectives and a digital competency management system for efficient data handling. Regular, structured feedback and advanced data analytics are emphasized for continuous performance monitoring. Additionally, a formal rewards program is recommended to motivate and retain high-performing employees by linking performance outcomes with individual and team rewards.

Research, Development and Design for Product Development SAC: Interaction Design Mobile Web Application Using User Centered Design Methodology

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In the era of Covid-19, people are more sensitive to their health and hygiene. SAC is present in the community as a service to clean each customer’s favourite shoes. Even though SAC has been around since 2013, until now they have not touched the digital realm. For this reason, innovation for SAC needs to be implemented so they are not left behind by competitors who are starting to become aware of digitalization. So that the implementation of digitalization can save costs and time, the approach to making digital products is through product development. To innovate through the use of product development in digital, a User-Centered Design (UCD) method approach with a Design Thinking (DT) mindset is used. The UCD process includes understanding context, specify user requirements, design solution, and evaluate. With the DT mindset, the process of emphatizing, defining, and ideation is applied to the understand context and specify user requirements so that this research will understand the usability side for users. With the addition of 5 UCD elements from Jesse James Garret, the digitalization process will be more in-depth and detailed in terms of creating interface design solutions. Primary data will be collected through In-depth Interview resulting abundant data that create persona and Minimum Viable Product(MVP). This research aims to analyze and identify the user experience flow for the prototype mobile web app product design SAC with the identifying the MVP and design prototype mobile website application and later do some usability testing to getting result that can meet the needs and uses for SAC customers. The result of this design approach method is a high-fidelity mobile web app prototype which was evaluated using Usability Testing (UT). The persona of each customer and the desire are the first key in development. Strong framework is formed with information architecture, low-fidelity, and high-fidelity prototypes. The final stage of the UCD iteration is to evaluate Usability Testing with a binary task success rate of 90%. Another UT results of quantitative data analysis with the Single Ease Question (SEQ) showed the number 6.42 and the System Usability Scale (SUS) showed the number 87.5 with quality A.

Evaluation of Digital Banking Efficiency in Indonesian Banking Sector using Data Envelopment Analysis (DEA) Approach

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The digital banking industry in Indonesia has experienced significant growth, driven by changing customer demands, technological advancements, and regulatory support. The digitalization of Indonesian banks aims to enhance cost efficiency. This research utilizes the Data Envelopment Analysis (DEA) method to measure the cost efficiency of Indonesian commercial banks. The research includes digital banks as business units and neo-banks, comparing their cost efficiency from 2012 to 2020, with digital banks and neo-banks generally operating more efficiently than non-digital banks. The findings highlight the significant impact of digital transformation on cost efficiency in the banking industry. Stakeholders, including banks and financial authorities, can utilize these insights to plan strategies, reduce operating costs, and enhance cost efficiency. Further research can explore additional factors, such as macroeconomic influences, and categorize commercial banks based on their core capital categories.

Proposed Customer Acquisition Strategy for Mobile Banking Application

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Digital technology has produced numerous benefits and simplified workers. Nonetheless, this exponential growth in digital technology has increased competition, significantly impacting the finance industry. This significant development in banking presented a vast opportunity that had to be carefully analysed and managed, resulting in intense competition among digital banking products such as mobile banking services, which have helped macro, micro, and small enterprises in Indonesia gain access to more convenient financial services. A regional bank owned one of Indonesia’s provinces, launched a successful mobile banking app with revolutionary features that made transaction easier. The bank updated their mobile app in 2022 as part of their ongoing implementation change from a focus on products to one on customers. In response to user feedback, the new version enhances consumer experience in terms of UI UX and other factors. However, once a market-leading application ranked among the top 10 digital banking products in Indonesia, the mobile banking is presently experiencing a decline in the number of app activations and is being replaced by competitors. Additionally, the bank has difficulty measuring the mobile banking’s digital marketing campaigns. Beginning with an internal and external analysis, a customer acquisition strategy was proposed for mobile banking services product utilizing the RACE planning framework and a digital marketing implementation strategy.

Digitalization and Productivity: Evidence on Indonesian Large and Medium Industries

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This article estimates the relationship between digitalization and labor productivity in the manufacturing sector of a developing country represented by Indonesia. Literature investigating the effect of digitalization on labor productivity in the manufacturing sector is still rare in developing countries. Thus, the present study contributes to filling the gap regarding digitalization and labor productivity in developing countries. It used data of 33,577 large and medium industrial companies in Indonesia in 2017 obtained from the Large and Medium Industry Survey 2017 database, Statistics Indonesia. This study used econometric regression in cross-sectional data with labor productivity as the dependent variable and ICT asset proportion as the primary independent variable, representing the digitalization variable. The findings revealed that digitalization is positively and significantly associated with labor productivity in Indonesia’s large and medium industries.

Business Process Improvement and Capital Budgeting Analysis to Develop the Digitalization Process of Loan / Financing in Bank Sumsel Babel

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PT Bank Pembangunan Daerah Sumatera Selatan dan Bangka Belitung (brand name: Bank Sumsel Babel) is one of the regional state-owned enterprises (SOEs) engaged in the banking sector. As a local company with a great purpose, Bank Sumsel Babel has a big responsibility to support all industries in the region province of South Sumatera and the Bangka Belitung Islands. This study examines the downward trends in credit and financing activity over the previous five years, particularly in working capital and investment credit at Babel Sumsel Babel branches. These two credits assess how successful regional banks are at boosting the local economy. On the other hand, the Bank has seen a decrease in market share in its multi-purpose credit products to civil servants in the South Sumatra and Bangka Belitung islands, where this credit is the primary source of income for Bank Sumsel Babel. This research utilizes qualitative information to determine the root cause and improve business processes by using the digital revolution of credit and financing to speed up the process and increase microfinance in Bank Sumsel Babel. Furthermore, the capital budgeting analysis to build the digitalization process will be calculated in this study to determine whether the investment is feasible. Based on the findings of this study, it is possible to conclude that Bank Sumsel Babel can use digitalization as a process improvement to secure its niche market and increase lending activities. Finally, this study makes recommendations for internal management on implementing the credit and lending digitalization process.

The Digitalization of Distributor Management System at Pertamina Lubricants: Issues and Solutions on the Implementation Stage

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Pertamina Lubricants has stated digital transformation as one of its breakthrough projects to accelerate digitalization as one of its strategic initiatives. This strategic initiative has objectives to enhance channel management and the capability of distributors as strategic business partners to achieve their sales volume target set by the management of Pertamina Lubricants. This journal aims to evaluate and improve the digital distributor management system to help distributors of Pertamina Lubricants achieve their sales volume target.