ict investment trends in indonesia - marketresearch.com report covers a detailed breakdown of the...

ICT investment trends in Indonesia

Enterprise ICT spending patterns through to the end of 2015

July 2014

ICT investment trends in Indonesia P a g e | 1 www.kable.co.<US> / © Kable Business Intelligence Limited / + 44 (0) 207 936 6997

1 Trends in ICT budgets

1.1 Summary

This report presents the findings from a survey of 47 Indonesian enterprises regarding their Information &

Communications Technology (ICT) investment trends. The survey investigates how Indonesian enterprises

currently allocate their ICT budgets across the core areas of enterprise ICT expenditure: hardware, software, IT

services, communications, and consulting.

The report illustrates the core technologies enterprises are investing in, including business intelligence, content

management, mobility, communications & collaboration solutions . The survey also highlights the approach adopted

by enterprises in Indonesia when purchasing technology. Through Kable’s survey, the report aims to provide better

insight to ICT vendors and services providers when pitching their solutions to enterprises in Indonesia.

The survey was conducted in Q4 2013 via an online methodology, with respondents all having ICT decision maker

responsibility (typically CIOs and IT Managers). Kable plans to repeat the survey in the second half of 2014, in

order to monitor ICT budget changes on an ongoing basis.

1.2 Reason to buy

This report will help readers to understand how Indonesian enterprise ICT landscape is set to change in

2014.

Gain a view as to how ICT Rupiahs are being allocated in your target audience.

The report covers a detailed breakdown of the opportunities within each of the core areas of ICT spend

(hardware, software, IT services, telecommunications, and consulting.)

The report will help users to gain a view of the current strategic objectives of Indonesian enterprises.

The report will provide a detailed breakdown of the opportunities within selected technology categories

(business intelligence, content management, mobility, communications & collaboration).

Understand the factors that are influencing Indonesian enterprises’ decision to select an ICT provider.

Gain a view as to the business and IT objectives Indonesian enterprises are looking to achieve through

their ICT investment strategies.


1.3 Survey demographics

Figure 1: Indonesian enterprise ICT survey industry breakdown

Source: Kable

Table 1: Indonesian enterprise ICT survey industry breakdown

Industry Count Percentage of respondents

Financial markets X X%

Utilities X X%

Education X X%

Retail X X%

Manufacturing X X%

Insurance X X%

Government X X%

Healthcare X X%

Energy X X%

Media X X%

Retail banking X X%

Pharmaceuticals X X%

Total X X%

Source: Kable

X%

X%

X%

X%

X% X%

X%

X%

X%

X%

X% X%

Indonesian enterprise ICT survey industry breakdown

Financial markets Utilities Education Retail

Manufacturing Insurance Government Healthcare

Energy Media Retail banking Pharmaceuticals X respondents


Figure 2: Indonesian enterprise ICT survey breakdown by size band (number of employees)

Source: Kable

Table 2: Indonesian enterprise ICT survey breakdown by size band (number of employees)

Employee size band Count Percentage of respondents

Over 10,000 X X%

5,000-9,999 X X%

2,000-4,999 X X%

1,000-1,999 X X%

500-999 X X%

100-499 X X%

50-99 X X%

Total X X%

Source: Kable

X%

X%

X%

X% X%

X%

X%

Indonesian enterprise ICT survey breakdown by size band (number of employees)

Over 10000 5000-9999 2000-4999 1000-1999 500-999 100-499 50-99

X respondents


1.4 ICT budget changes

Figure 3: Recent and expected ICT budget changes among Indonesian enterprises

Source: Kable

Table 3: Recent and expected ICT budget changes among Indonesian enterprises

Trend 2012-13 (Count)

2012-13 (%)

2013-14 expectation (Count)

2013-14 expectation (%)

Decrease more than 6% X X% X X%

Decrease slightly (1%-5%) X X% X X%

Flat (0%) X X% X X%

Increase slightly (1-5%) X X% X X%

Increase significantly (6%+) X X% X X%

Total X X% X X%

Source: Kable

Despite the uncertain economic conditions...................................................................................................................

(Summary of the situation in the enterprise ICT market and discussion around the degree to which IT budgets are

decreasing/increasing/staying flat.)


1.5 ICT budget allocation by core technology area

Figure 4: Indonesian enterprises’ (external) ICT budget allocation, 2013 and 2014

Source: Kable

Kable’s survey suggests that Indonesian enterprises are allocating a major portion of their IT budgets on

........................................................................................................................................................ ...............................

................................................ (A brief description of the way in which enterprises are allocating their IT budgets.).

on how this breaks down by provider type).

Table 4: Indonesian enterprises’ (external) ICT budget allocation, 2013 and 2014

Category Average budget in 2013 (%) Average budget in 2014 (%)

Software X% X%

Hardware X% X%

Services X% X%

Communications X% X%

Consulting X% X%

Other X% X%

Total X% X%

Source: Kable


1.5.1 Hardware budget breakdown

Figure 5: Indonesian enterprises’ average hardware budget allocation

Source: Kable

Kable’s recent survey finds that almost one third of the hardware spend is on............................................................

(A brief description on where the investments are being made and what the implications are for hardware vendors. )

Table 5: Indonesian enterprises’ average hardware budget allocation

IT function Average budget (%)

Clients X

Network and communications equipment X

Mainframes X

Security X

Servers X

Processors X

Storage X

Peripherals X

Total X

Source: Kable


2 ICT investment priorities and vendor mindshare

2.1 Core technology investment priorities

Figure 6: Current and future investment priorities of Indonesian enterprises across core technologies

Source: Kable

Table 6: Current and future investment priorities of Indonesian enterprises across core technologies

Technology category

Have now (Count)

Have now (%)

Considering investment in next 2 years (count)

Considering investment in next 2 years (%)

Content management X X% X X%

Mobility X X% X X%

Communications & collaboration X X% X X%

Business intelligence X X% X X%

Source: Kable


According to the survey, content management has the highest penetration rate, ................... (Brief description of

which technologies enterprises are currently investing in, as well as those that they are set to make the greatest

investments in, in the next couple of years)

2.1.1 Mobility

Figure 7: Mobility – Indonesian enterprises’ current and future investment priorities

Source: Kable

Table 7: Mobility – Indonesian enterprises’ current and future investment priorities

Mobility Have now

(count) Have

now (%) Considering investment

in next 2 years (count) Considering investment

in next 2 years (%)

Device management X X% X X%

Employee/supplier facing application development X X% X X%

Tablet computing X X% X X%

Customer facing mobile applications X X% X X%

Source: Kable

The demand for mobility is growing in Indonesia; such solutions enable enterprises to manage their operations

more effectively by providing ................................... (Briefly describe in which sub categories enterprises are

planning on making investments).


3 ICT procurement trends

3.1 Purchasing channels

Figure 8: Indonesian enterprises' preferred approach to buying technologies

Source: Kable

Table 8: Indonesian enterprises' preferred approach to buying technologies

Technology

Direct from

supplier deployed

on-site

Through a local

reseller deployed

on-site

Through a national reseller

deployed on-site

Direct from

supplier as a

hosted service

Through a local

reseller as a hosted

service

Through a national

reseller as a hosted

service

Total

Enterprise applications X% X% X% X% X% X% 100%

Business intelligence X% X% X% X% X% X% 100%


IT systems management X% X% X% X% X% X% 100%

Security X% X% X% X% X% X% 100%

Communications & collaboration X% X% X% X% X% X% 100%

Mobility X% X% X% X% X% X% 100%

Content management X% X% X% X% X% X% 100%

Green IT & virtualization X% X% X% X% X% X% 100%

Source: Kable

According to Kable’s survey, it is evident that the majority of Indonesian enterprises prefer buying technologies

........... ..... (Brief description of the enterprises approach to buying IT products and preferred deployment modes

across various technology categories)

3.2 Business objectives influencing IT investment strategy

Figure 9: Business objectives which influence Indonesian enterprises' IT investment strategy

Source: Kable


Table 9: Business objectives which influence Indonesian enterprises' IT investment strategy

Business objectives Average rating

Increase customer satisfaction X

Increase revenues X

Raise efficiency X

Achieve or maintain regulatory compliance X

Improve supplier relationships X

Cut costs X

Source: Kable

A majority of Indonesian enterprises rate ........................................... as their most important business objective.

3.3 IT objectives influencing IT investment strategy

Indonesian enterprises make IT investments to better demonstrate the value of IT to the business

Figure 10: IT objectives which influence Indonesian enterprises' IT investment strategy

Source: Kable


Table 10: IT objectives which influence Indonesian enterprises' IT investment strategy

IT objectives % of

responses(1) % of

responses(2) % of

responses(3) % of

responses(4) Average

rating

Better demonstrate the value of IT to the business X% X% X% X% X

Use IT to support revenue growth X% X% X% X% X

Deliver new functionality to business users X% X% X% X% X

Meet internal service level agreements X% X% X% X% X

Align IT with overall business goals X% X% X% X% X

Source: Kable

A majority of Indonesian enterprises rate ........................................... as their most important IT objective.


4 Report Methodology

Kable’s Customer Insight Survey reports are primarily based on the information (related to ICT budgets, priorities

and procurement plans) collected through an annual survey performed in the fourth quarter of every year. The

primary research involves a major program of interviewing CIOs and IT executives regarding their IT investment

and priorities. The secondary research process involves covering publicly available sources, company annual

reports, and press releases. The content in the report is written by analyzing the survey findings and substantiating

those findings through secondary research.


5 Further reading

ICT investment trends in South Korea, June 2014

ICT investment trends in Japan, May 2014

ICT investment in Singapore & Malaysia, June 2014

ICT investment in China, April 2014


TABLE OF CONTENTS

1 Trends in ICT budgets ......................................................................................... 5

1.1 Introduction .............................................................................................................. 5

1.2 Survey demographics ............................................................................................... 5

1.3 ICT budget changes .................................................................................................. 8

1.4 ICT budget allocation by core technology area ......................................................... 10

1.4.1 Hardware budget breakdown...................................................................... 12

1.4.2 Software budget breakdowns ..................................................................... 14

1.4.3 Third party IT services expenditure ............................................................. 16

1.4.4 Telecommunications budget ....................................................................... 20

1.5 ICT budget allocation by function ............................................................................. 22

1.6 Outsourced IT functions .......................................................................................... 24

2 ICT investment priorities and vendor mindshare ........................................... 26

2.1 Introduction ............................................................................................................ 26

2.2 Core technology investment priorities ...................................................................... 26

2.2.1 Business intelligence ................................................................................. 28

2.2.2 Content management ................................................................................ 32

2.2.3 Mobility...................................................................................................... 36

2.2.4 Communications & collaboration solutions .................................................. 40

3 ICT procurement trends .................................................................................... 44

3.1 Introduction ............................................................................................................ 44

3.2 Purchasing channels ............................................................................................... 44

3.3 Business objectives influencing IT investment strategy ............................................. 46

3.4 IT objectives influencing IT investment strategy ........................................................ 48

3.5 ICT provider selection ............................................................................................. 50

4 Summary ............................................................................................................ 52

4.1 Indonesian enterprises are increasing their expenditure in disruptive technologies to

gain differentiation in the global marketplace ............................................................ 52

5 Appendix............................................................................................................. 53

5.1 Definitions .............................................................................................................. 53

5.2 Further reading ....................................................................................................... 57

5.3 Contact the authors................................................................................................. 57


List of Figures

Figure 1: Indonesian enterprise ICT survey industry breakdown ............................................................ 5

Figure 2: Indonesian enterprise ICT survey breakdown by size band (number of employees) ................. 6

Figure 3: Recent and expected ICT budget changes among Indonesian enterprises .............................. 8

Figure 4: Indonesian enterprises’ (external) ICT budget allocation, 2013 and 2014 .............................. 10

Figure 5: Indonesian enterprises’ average hardware budget allocation ................................................ 12

Figure 6: Indonesian enterprises’ average software budget allocation by technology............................ 14

Figure 7: Indonesian enterprises’ average IT services budget allocation .............................................. 16

Figure 8: Indonesian enterprises’ average IT consulting services budget allocation .............................. 18

Figure 9: Indonesian enterprises’ average telecommunications budget allocation ................................ 20

Figure 10: Indonesian enterprises’ ICT budget allocation by function, 2013 and 2014 .......................... 22

Figure 11: Outsourced IT functions - Indonesian enterprises’ current and future outsourcing priorities .. 24

Figure 12: Current and future investment priorities of Indonesian enterprises across core technologies 26

Figure 13: Business intelligence – Indonesian enterprises’ current and future investment priorities ....... 28

Figure 14: Business intelligence – vendor mindshare among Indonesian enterprises ........................... 30

Figure 15: Content management – Indonesian enterprises’ current and future investment priorities ...... 32

Figure 16: Content management – vendor mindshare among Indonesian enterprises .......................... 34

Figure 17: Mobility – Indonesian enterprises’ current and future investment priorities ........................... 36

Figure 18: Mobility – vendor mindshare among Indonesian enterprises ............................................... 38

Figure 19: Communications & collaboration solutions – Indonesian enterprises’ current and future

investment priorities ................................................................................................ 40

Figure 20: Communications & collaboration solutions – vendor mindshare among Indonesian enterprises

42

Figure 21: Indonesian enterprises' preferred approach to buying technologies ..................................... 44

Figure 22: Business objectives which influence Indonesian enterprises' IT investment strategy ............ 46

Figure 23: IT objectives which influence Indonesian enterprises' IT investment strategy ....................... 48

Figure 24: Factors influencing Indonesian enterprises' decision to choose an ICT provider .................. 50

List of Tables

Table 1: Indonesian enterprise ICT survey industry breakdown ............................................................. 6

Table 2: Indonesian enterprise ICT survey breakdown by size band (number of employees) .................. 7

Table 3: Recent and expected ICT budget changes among Indonesian enterprises ............................... 8

Table 4: Indonesian enterprises’ (external) ICT budget allocation, 2013 and 2014 ............................... 10

Table 5: Indonesian enterprises’ average hardware budget allocation ................................................. 12

Table 6: Indonesian enterprises’ average software budget allocation by technology ............................. 14

Table 7: Indonesian enterprises’ average IT services budget allocation ............................................... 16

Table 8: Indonesian enterprises’ average IT consulting services budget allocation ............................... 18

Table 9: Indonesian enterprises’ average telecommunications budget allocation ................................. 20

Table 10: Indonesian enterprises’ ICT budget allocation by function, 2013 and 2014 ........................... 22

Table 11: Outsourced IT functions - Indonesian enterprises’ current and future outsourcing priorities ... 24

Table 12: Current and future investment priorities of Indonesian enterprises across core technologies . 27


Table 13: Business intelligence – Indonesian enterprises’ current and future investment priorities ........ 28

Table 14: Business intelligence – vendor mindshare among Indonesian enterprises ............................ 30

Table 15: Content management – Indonesian enterprises’ current and future investment priorities ....... 32

Table 16: Content management – vendor mindshare among Indonesian enterprises ........................... 34

Table 17: Mobility – Indonesian enterprises’ current and future investment priorities ............................ 36

Table 18: Mobility – vendor mindshare among Indonesian enterprises ................................................ 38

Table 19: Communications & collaboration solutions – Indonesian enterprises’ current and future

investment priorities ................................................................................................ 40

Table 20: Communications & collaboration solutions – vendor mindshare among Indonesian enterprises

42

Table 21: Indonesian enterprises' preferred approach to buying technologies ...................................... 45

Table 22: Business objectives which influence Indonesian enterprises' IT investment strategy ............. 46

Table 23: IT objectives which influence Indonesian enterprises' IT investment strategy ........................ 48

Table 24: Factors influencing Indonesian enterprises' decision to choose an ICT provider ................... 50

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