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Tuesday, November 29, 2011

Skimming : Exporting Software from Indonesia

The Electronic Journal of Information Systems in Developing Countries, Vol 13 (2003)


  • The Indonesian market mainly demands packaged software at a current volume of US$ 80.07 million in 2001. The fact that almost all standard software applications are available as pirated copies, makes a precise estimation of “demand”, expressed in US$ value impossible.
  • The only markets free from pirated software are those for customized products and for turn key solutions for larger enterprises such as Banks, Government Institutions and Industrial corporations.
  • The important factor here is that due to a lack of expertise within the customer’s organizations, the request for software comes through the help of International Business consultants. Many companies do not really identify the need for IT upgrades. Usually, the problems start at the business level. That is where consultants are called for help.
  • Today, without the active involvement of Habibie, BPPT remains a half empty 30 storey building in the middle of Jakarta’s business district, without any clearly defined role. The policy for software development is now being made within the Ministry of Trade and Industry.
  • Most local Software Companies are basically official or unofficial Microsoft implementers and they use Microsoft products up to the very limit of their competency. For instance, entire banking systems run on NT, knowing that NT is not exactly the most secure platform available.
  • The most prominent software developer in this field is Nomad Software Solutions which is made up by some 11 Irish nationals; all graduated IT specialists. The company specializes in software outsourcing with a focus on Java based applications. The company employs a self trained staff of 74 Indonesian University Graduates. The main reason for working in Indonesia is the favorable structure of cost for software programmers. At a third of the price of her Indian counterpart, the Indonesian software engineer produces excellent code, once trained intensively.
  • Another contender for successful software outsourcing in Indonesia is PT Sigma, which is the owner of Bali Camp. The company does most of its business crunching code for back-end systems for the financial sector (it also once developed an Indonesian spell checker for Microsoft).
  • Since Bandung (200 km away from Jakarta) is host to the largest number of IT Universities, the city has been chosen by the Government to start with the pilot project of a software center.
  • Another reason for choosing Bandung is the fact because of its proximity to a number of technical institutes, like the renowned Bandung Institute of Technology (ITB). The hope is that Bandung would become a world class IT center by 2025.

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