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Arnold Egg, formerly CTO at Lippo Group, will talk at the upcoming Agile Impact conference in Indonesia (19-21 September) on Agile in a Dynamic Environment, exploring his experience as CTO of one of the largest conglomerates in Asia. He talks about how Indonesia is ideally situated to provide products and services for other parts of the world and what Digital Transformation is about. He emphasises that there is no single solution to digital and agile transformation and that copy-paste adoptions fail.
Arnold is originally from the Netherlands and moved to Indonesia around 2000. Initially setting up an outsourcing company, he waited for the right moment to create his own startup. In 2008 he started Tokobagus, which he sold a few years later to OLX. Using his entrepreneurial energy and experience, he now leads the digital transformation as CTO for Lippo Digital.
Arnold, tell us a bit more about yourself? What drives you, why did you move to Indonesia, etc?
I love everything digital. Since I was a boy I was interested in computers and when the internet became available the world opened up to me. I knew for sure I wanted to work in the digital space and I also knew that the Dutch market is too small, you simply do not have the scale. So then I arrived in Indonesia by luck and noticed that internet was not that wide spread yet even though the market is perfect for digital solutions.
You told me once that you created your initial outsourcing company on Bali, while you were waiting for the ‘right moment’ to start your own product/website. This was 2001. Most of the world was moving rapidly towards the internet. How was that in Indonesia and how is it today?
At that time it was still way too early. Internet was too expensive and the speed was painful. As a result of that there was simply no local market. So I had to start selling my solutions outside of Indonesia. Now it is totally the other way around. Indonesia is embracing all the new technologies and apps much sooner than Europeans are doing. This market is now so much alive that there is every day something new being launched and you see people using their smartphones 24/7. The perfect market for digital products.
So you are saying Indonesia adopts new technology faster than the ‘western world’? In my world view, I still see many ‘broken things’. Before I moved to Bali 2 years back, my wife hardly went to shops anymore; she ordered everything online (order 5 x what you need, try it out at home and send back the rest free of charge). In Holland I never carry cash around for over 5 years, in Indonesia I can’t do that. So in a way there are still many things that can be improved. How do you see that? And what are some examples of Indonesia being faster in adopting technology?
Of course it depends where you are because Bali is not the best example case but it is a fact that consumers try new applications faster in Indonesia / Asia than in Western countries. Return policies in Europe are amazing because of regulations here you don’t have these also because return products in such a big country is expensive. But emoney product have a much higher adoption rate here than in the Netherlands for example. Western countries are still a card based system and as cards are not fully penetrated yet in this market there is a big chance that a lot of people will skip that phase all together. Another great example is what Gojek did in this market, I haven’t seen anything similar abroad that came close. Ordering food at home through gojek is becoming mainstream and also enabling 3 hours delivery for online shopping.
How do you see the technology landscape of Indonesia, the quality of the education system, the availability of (skilled) engineers?
I am very positive about the talent in the market. Even though the education system is not on par yet I do see that the creative culture that Indonesia has translates in amazing talent here.
What do you think ‘digital transformation’ is really about? And how do you see digital develop in the upcoming years; what trends are important to ‘watch’?
Digital transformation is one of those buzz words but quite easy to explain. What we need to do is to take all the advantages of this new digital era to integrate digital solutions to the normal business processes we have today. We can use digital products to improve current procedures and make things more efficient. Setting up a digital business is nothing different than a normal business just that it is making its life much easier using all the digital solutions that are available to execute in a faster and more efficient way.
Before you joined Lippo, there was no ‘digital’ as far as I understand. How did you manage to build a technical/IT capability in a company that had none (or little?)?
There usually is digital in these groups but these are different from the agile digital we usually talk about. So the difference is all in different type of execution.
What were some of the challenges you and your team faced in ‘going digital’?
Time is always your biggest enemy, besides that is that you need to explain what you are trying to do to people who are new to the digital landscape. So there is a lot of education involved.
One of the things I have observed in Indonesia is that people (including leaders) all want to know ‘how do I do it’. Do you have a ‘how to’ for digital transformation?
Every company is different but for me the key is that keep things simple and not over complicate things. An easy solution is more sophisticated and more durable than over complex ones. Sometimes I am shocked to see that people are just making their life too difficult.
What do you mean by making life too difficult?
A good start is by doing proper preparation and understand what is really necessary and don’t start building all that is requested. Than my second point of making things difficult is that I sometimes feel like people making the solution to complex, don’t make things more complex just because you can. Complex is difficult to scale.
What would be your top 3 ‘tips’ for enterprises that want to ‘go digital’ in Indonesia?
- Start small
- Launch fast
- Measure everything and go back to step one.
I am an entrepreneur myself and I think we both share that ‘just get stuff done’ attitude needed to get a new venture off the ground. The past 2 years I’ve been working more in corporate environments and I can see it’s a different world. I think it’s a lot more challenging to change the ‘bureaucratic, business as usual culture’ towards a more entrepreneurial culture. This also means it’s a bigger challenge to launch new products. An interesting part of the Lippo story is that they hired an experienced entrepreneur to create their digital ‘division’. Most corporates I see hire other corporate consultancies to do the same thing. In my view, getting entrepreneurs to drive such change makes a lot of sense, since one of the key ingredients is entrepreneurship. How do you see that?
Would be awkward for me to say differently. The founding team of OVO for example is a team of all entrepreneurs but we were also lucky to have some old consultants joining the team to add that so much necessary structure. Entrepreneurs have some skills necessary to build digital products that most consultants do not have. You need to act fast and adjust to new information when it comes available. It is more working on instinct and previous experience.
How do you experience working in a big family owned conglomerate ‘versus’ starting your own startup from scratch?
I think it is quite the same to be honest. How Lippo Digital was setup is perfect to build digital companies as we still had the freedom as a startup but we also had the advantages of having a big group behind you to make some steps forward easier.
What are some of the things you will share at the agile impact conference on 20+21 September in Jakarta?
What I would like to share is how to work agile in different type of situations. Every company is different and you cannot just copy what you did in the previous company. Every situation need their own approach. I would love to share about how agile worked and did not work in multiple projects I worked on.
That’s interesting. One thing I have noticed in Indonesia is the need for people to get very clear instructions. I think this is because of how the ‘system’ on Indonesia is built. People are used to getting instructions (from a dad, teacher or later a boss). Now in Agile, everything is about self-organization. If you look at the developers in your organization, how do you see them deal with that apparent paradox?
I think as a manager you can learn these skills to your team. Especially the millennials I work with already have a totally different mindset and I don’t think the paradox is valid anymore.
On the ‘copy pasting’ of Agile; why do you think agile cannot be ‘copied’ and needs to be adjusted to the situation of the company? What part of agile can or cannot be ‘copied’?
Especially in a bigger organization with a lot of existing older departments you cannot go and just start using the Scrum handbook and implement. Every situation has a different Agile approach.
What are some examples of what worked and what didn’t work?
Scrum to be implemented in the most optimum form needs to have the support and trust from all stakeholders if that is not the case you will never have a proper sprint as they will keep demanding changes. Also for very short timelines scrum simply doesn’t work as movement is limited. But what usually works and helps the organization is that sprint planning gives clear ETA to stakeholders so all departments can get ready before new features are released as product development is not only development of a application but also developing all the business flows.