ALTERNATIVE BUSINESS MODEL TO IMPROVE SUSTAINABILITY OF THE BUSINESS OF MICROSOFT ERP IMPLEMENTATION PARTNERS IN INDONESIA

• Main Author: Johannes Hamonangan, Jimi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53576
• Institution: Institut Teknologi Bandung

ERP Implementation Partners industry, an industry that created from the gap between ERP Principal/Vendors and the ERP Customers. ERP or Enterprise Resource Planning is a business management software that integrates the information from multiple resources of the company, manages them, and presented the information in the form of Business Intelligence (BI) to automate or expedite the business process the resources and provide business insights for the management. The ERP system is too complex to be implemented for both the ERP Principals or ERP Customers on their own because it involves not only the technology but also the process, the people, and the organization as a whole. ERP Implementation Partners bridged this gap and added their expertise on top of the standard value proposition of the ERP system, nowadays an ERP Implementation Project is taking a major part in the Digital Transformation process. In this pandemic situation, these partners are “caught off-guard” by the sudden drop of the demands and left vulnerable. Facing a major challenge in sustainability, the drop in their revenue flow caused by the drop in the demand for ERP implementation service and support. As the whole economy is falling into a recession period, the value of the ERP is also diminished from the perspective of its customer’s surviving-mode. Still, there are a handful of partners that can sustain their business despite being in the same condition, they are the dominant players of the industry, but rather than strong capital what makes them sustainable are the fact that they are not forgotten their true value as consultants and ERP Implementation Partners, they are adding their unique value proposition on top of the standard ERP system value proposition. After all, the standard ERP value proposition without added value that only competes in the price dimension will only undermine the industry’s profitability. This study utilized Porter’s Five Forces, PESTEL, and Business Model Canvas to review the macro-environment, industry profitability, and current business model to find a strategic position and alternative business model to improve the sustainability of the business. Porter’s Five Forces, through analyzing the five forces as a whole, will serve as the inputs consideration when formulating the business strategy so it can shape the industry in the favor of the firm and reach sustainability. While it plays a vital role to provide most of the inputs required to formulate the new strategy, Porter’s Five Forces mostly focuses on the stakeholders, in relative, directly linked to the industry. PESTEL's purpose here is to complete the analysis by capturing the macro-environmental factors that might not be considered in P5F analysis and to take it from a different perspective and see how it can affect the industry. This study through Kepner-Tregoe’s problem analysis decides that the cause of the drop in demand for the partners' services is the standard value proposition of the partners is irrelevant for the business of their customers and prospects. The core of the ERP implementation partner’s business is riding on its value proposition, thus, considering the key driver of change in technological factors from macro-environmental and industry forces, the study suggests changes in the business model, raising the current differentiation strategy, which has been used by the partners that can sustain its business in the current pandemic situation, to a new level which is Digital Transformation. An alternative business model conversed through Business Model Canvas. Through its introduction to the problem, business issue exploration, and business analysis, this study defines that the shifted value proposition of the ERP Implementation Partners towards a mere “commodity product” as the main cause of the problem, and changes in the business model that put Digital Transformation in the center as the solution to improve the sustainability of their business. Not to be misinterpreted as the main cause, but the current pandemic situation certainly accelerates the inevitable process that could be mitigated.