E-commerce will soon rebound

In cooperation with the Asian GLOBE-The Jakarta CEO Club and MarkPlus & Co. management consulting firm, this new column is designed to look at the visions and strategic views of CEOs of Indonesian and multinational companies operating in Indonesia. It will appear every Thursday with the support of marketing guru Hermawan Kertajaya. The following is the first piece on the CEO of PT SAP Asia in Indonesia, a subsidiary of the Germany-based e- commerce software solutions provider. It's compiled by The Jakarta Post reporter K. Basrie.

Over the past few years, the world witnessed the ugly ruin of online businesses. Many firmly insist that the online world has been something of a bust. So what went wrong?

Many blame the failure on the costs, which were higher than expected and the benefits more elusive than anticipated. Liquidity, rather than the build-out capabilities, quickly became the number one priority for many dot-coms as they struggled to survive.

Most of the dot-coms were geared on how to gain capital from the market, rather than how to give value to customers.

Does the future still hold a grim outlook after the well- publicized sad story of the Internet world? Early efforts have stumbled, to be sure. But many now doubt it will be as grim as thought. They say there'll be a change very soon.

Take a brief look at world-class companies around the globe. From procurement to product design to supply chain management, the Internet and the e-commerce have changed the way organizations operate and enterprises serve customers and win the fierce competition.

The community, still small but growing, believes that e- commerce is a permanent feature on the business landscape.

Krisnendu Datta, managing director of PT SAP Indonesia, believes that the real players of e-commerce are beginning to evolve and return in different forms.

"As that evolves, we'll see people's confidence coming back and taking more e-commerce-based solutions into their business," he said in a recent interview.

SAP, Datta went on, survived when the bubble burst because "we did not jump on the dot-com bandwagon and try to play the initial public offering (IPO) game and try to run and acquire a few companies with high market capitalization. Instead we focused on how we could enrich our solutions using e-commerce technology, using e-commerce tools and then going back to the same and other customers with added value."

According to Datta, it is high time companies in Indonesia get in the e-commerce market.

A rich bachelor will never be ready to marry, Datta said.

"So, I don't think there's any particular time to go for e- commerce. The time is now. The time is always there."

One, he added, can choose areas to go by looking at one's own business model by looking at what he can achieve in the end. E -commerce should not be driven by technology or be something to do just because everyone else is doing it.

And globalization also offers opportunities and challenges, instead of risks alone.

"As a global player, our main challenge at SAP is how ready the market is, in terms of people's ability and what the IT does for them."

Datta, who has been in the IT industry for 14 years, reminded that growth is not the sole goal in the business world since growth is sometimes uncontrolled and unprofitable.

"That's why growth alone is not the only thing we should challenge in business."

Based on his experience, there are two fundamentals ways to grow.

"First, grow in your solution set by offering more products and solution within the same customer base or within the same geography, or you can enhance your geography with the same solution set.

"Do either one or you can do a combination. In SAP's case, we're doing both," Datta said.

Indonesia, Datta said, is home to roughly 4,000 firms with yearly earnings of between US$30 million and $40 million, which has become the main target of SAP Indonesia.

"About 60 percent of the market is still untapped," he said.

He, thus, urges IT players to grab the opportunities.

"The question is the timeframe. This market still needs a certain amount of awareness, infrastructure, knowledge base for IT to grow and that takes time," he said, adding that the perfect time to get in would be over the next five years.

But he suggests that knowledge is a crucial element for any company to grow and develop in such a competitive era.

Unfortunately, knowledge does not appear on the balance sheet.

Today, he said, knowledge management is not about acquiring knowledge alone but about sharing knowledge with others, including employees.

Having dozens of knowledgeable workers is far better and more powerful than having only one knowledgeable manager, he said.

Well, while there's uncertainty about the speed of change, there's no question about the direction of change. And let the rich bachelor make his own judgment.