Digitization, Digitalization and Digital Transformation: In Which Phase Are Our Media Companies?

In this era of disruption, Information Technology experts offer three main concepts about the development of the business world in the digital era: digitization, digitization, and digital transformation.

According to Gartner’s IT Glossary, digitization is the process of changing from analog to digital form. Digitizing the world of recording, converting cassette tapes into mp3, or converting VHS videos into mp4 files. In the world of mass media, for example: converting newspapers into e-paper, converting physical archives into JPG, and converting newspaper news into the news on the web. Paper-based mass media digitize content.

While digitalization refers to the change of conventional business processes to digital processes. A company is said to have digitalized if its business processes are paperless, and reduce face-to-face contact. The company’s internal interactions and communications, for example, are already paperless. Also, transactions with customers and vendors have also been through online transactions

The third term is digital transformation. A company is said to be undergoing a digital transformation if it uses the advancement of IT technology, not only digitizing and digitalizing but has transformed to create a new business model. This new business model creates new sources of revenue and new values ​​that develop or differ from the initial business model. More details can be seen below:

If we consider digitization-digitalization-digital-transformation as a business imperative process in a sea of ​​disruptive uncertainty, then where is our media industry already? Which media are still in the digitization stage, which ones have entered digitalization, and which one has entered the digital transformation stage?

There has been no research to map the journey of the media in Indonesia which is spread throughout the country.

However, during my time as Deputy Secretary General of the Press Company Union (SPS) for the 2014-2019 period, discussions about digital transformation have not been that intense. SPS is the organization of more than 1,000 press companies in the country. In regular management meetings, the understanding of digitization, digitalization, and digital transformation is still mixed. Meetings until the last congress in Surabaya in February 2019, media companies were still whining about eliminating the paper tax, citing no tax for knowledge, something the finance minister has always refused.

In general, the media has digitized. Tempo, Kompas, Bisnis Indonesia, and others have digitized archives and sold them to the public. In addition, they already have an e-paper, which is an electronic newspaper whose content is the same as a physical newspaper. Pikiran Rakyat, the leading newspaper in West Java Province, has digitized the old archives, but unfortunately, they all burned down in October 2013.

At the digitalization stage, many have digitalized their business processes. When we subscribe to Kompas.id or Tempo, payments can be made online through e-banking, mobile banking, or through other payment gateways. Pikiran Rakyat is like that. You can subscribe to e-paper via a payment gateway. However, for classified ads that go directly to the office, Pikiran Rakyat still uses cash transactions, even though the application for installing and paying for ads already exists, via Tokopr.

How many have already done digital transformation by creating new business models? How intense is it? And will this new business model become the media business ecosystem?

Tempo tries to enter as an online store under the name Tempo Store (store.tempo.co). However, its products are still limited to digital archives, souvenirs (merchandise), and books. It’s a responsibility, why not just become a marketplace like Bukalapak or Tokopedia? (See my previous post here). There is no new business model that can support Tempo and increase public confidence. Tempo’s shares as of Monday (18/11) afternoon were at Rp. 155. Since trading on the stock exchange 19 years ago, shares with the code TMPO have never exceeded Rp 300, the price when they were launched.

Kompas has many business divisions. There are knowledge businesses such as Gramedia and publishing companies. In recent years, many subsidiary publications have been closed due to losses. However, Kompas also has other business activities, such as Travel Fairs, Job Fairs, and others. The MICE (meeting, incentive, convention, and exhibition) business is held by PT Diandra. Kompas group also owns the Santika and Amaris hotel chains. Kompas, Tempo, and Suara Merdeka are trying to build an office tower. But it’s not easy to market anyway.

But will the new business become the parent media business ecosystem? Can the new business ecosystem support the parent business that gives birth to new businesses? Can this new business save the parent in these difficult times? If not, it means that the new business model has not yet become an ecosystem. If the business model network is in the form of an ecosystem, the print media need not be eliminated. Digital transformation doesn’t mean turning off the print, but perhaps setting the print outlet again to limited space.

In this digital age, we are familiar with the term Big Data. Volume, Variety, and Velocity (3V) data are now so overwhelming. So many people say that the data is the new oil. Have our media companies mined this data and turned it into a new business model out of an old business that relied on advertising and newspaper sales?

Well, frankly, it seems that no media has entered the era of digital transformation.

The problems are many. Starting from the owner’s vision, and human resources, to capital. Unfortunately, when this media was at its peak, they did not use the excess money to research new business models. Most of them are still in the digitization stage, some are even in the digitization stage. Meanwhile, non-media brands have now become media themselves and have unique business models, which have eroded the fortunes of mainstream media.***

For Bahasa Indonesia version: see this page.

Budhiana Kartawijaya

Sekretaris Perusahaan Pikiran Rakyat. Meniti karir sebagai wartawan di Pikiran Rakyat.

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