THE EFFECT OF BUSINESS PARTNERSHIP AND INNOVATION MANAGEMENT TO BUSINESS PERFORMANCE OF BUSINESS UNITS OF MULTIPLAY PROVIDER IN INDONESIA.

Author:Purnomo, Dwi Sasongko
Position::Report - Abstract
 
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INTRODUCTION

Research Background

The tendency of the telecommunications industry increasingly shifts towards broadband services (data and internet) for both mobile broadband and fixed broadband, with the largest growth in mobile broadband access, namely 3G and Wi-Fi. On the market side, the observed development is the emergence of convergence services (multi-play and multi- screen) to the consumer segment and enterprise mobility services in a business or enterprise customer segment (www.indonesia-investment.com).

The growth of the use of multiplay services along with the growth of Internet usage in Indonesia. Based on data from the Association of Indonesian Internet Service Provider (APJII), the number of Internet users in Indonesia in 2016 reached 132.7 million peoples (51.8% from 256.2 million inhabitants); an increase compared to the year 2014, which amounted to approximately 88.1 million users.

The use of internet in Indonesia is supported by mobile broadband and fixed broadband network. Meanwhile, in the market, emerging convergence services (multi-play and multiscreen) to the consumer segment and enterprise mobility services in a business or enterprise customer segment. In other words, the use of data services increasingly shifting its basic telephony services such as voice (voice) and SMS, which is supported by the high smartphone population. This marked increase in data traffic of the three mobile operators which jumped from 79,050 terabytes in 2012 to 163,614 terabytes in 2013. The increase in data traffic is consistent with the data service users from 106.9 million in 2012 to 120.8 million in the year 2013. (www.mediadata.co.id).

Some of the services that can be provided with multiplay services include: 1) video streaming services, such as services which the server will broadcast the video in the form of bits of data to all clients over the network; 2) Audio Streaming Service, for example in the form of voice services such as audio streaming, where the server will broadcast bit of data to all clients over the network. Implementation is the same as broadcast radio, where the office broadcast as the server will send voice data to the client with wireless transmission, 3) Service of LAN games, in which the client can play the game with are connected to one another through a LAN network, the game data will be sent to the client in the form of bits of data passing through the network LAN; 4) Data Service, in which used by offices for sending and uploading data. The file will be sent in the form of bits of data and through the available network (Aldila, Hafidudin & Asep, 2016).

The use of technology (multiply/multiservice/multiscreen) is also one of the strategic initiatives of PT Telkom that is transformation costs, in order to execute the company's strategy. Given PT Telkom is the largest holder of a dominant market share in the telecommunications industry, the performance of multiplay services industry represented by the performance of PT Telkom that shows that the business performance of business units of multiplay providers cannot be said to be optimal. This is referred to the sales growth as an indicator of business performance, as stated by Wheelen & Hunger (2015); David (2013); Hubbard & Beamish (2011). David (2013) mentions some financial ratios used to evaluate the strategy consists of Return on Investment (ROI), Return on Equity (ROE), Profit Margin, Market Share, Debt to Equity, Earnings per share, sales growth, Assets growth.

The above conditions, allegedly because of not optimal implementation of innovation management undertaken by multiplay provider's business units. Qingrui et al. (2007) state that the core issues in the field of innovation management includes innovation itself and synergy between elements of technology and non-technology (strategy, culture, organization and institution innovation). While based on the observation of some phenomena known of the development of innovation management is not the optimal delivery of multiplay where the company still has weaknesses in identifying customer benefits in accordance with the customer's perspective. In addition, the company also seems to still have difficulties in identifying the consumer segments that have not served as an opportunity to gain market share.

Another issue that allegedly implicated in the non-optimal business performance of multiplay providers in Indonesia in regard to the implementation of a business partnership. According to Cravens (2013), a good business partnership is the establishment of vertical and horizontal partnerships involving the various related stakeholders. Meanwhile, the results of preliminary observations obtained several indications that the existence of problems in conducting marketing activities of products and interdepartmental collaboration. The management is also not optimal in using the customer database for use in developing customer relationship management program effectively and other marketing programs. In addition, the management is still relatively difficult to work together with educational institutions, as well as developers, business associations, intermediary institutions and government authorities (relevant agencies).

Based on the research background, it is interested to study the effect of business partnerships and innovation management on business performance in the business units of multiplay network provider in Indonesia.

Literature Studies

Business Partnership

The definition of a partnership based on the opinions of Cravens (2013), is an effort to cooperate with stakeholders that include a vertical relationship that consists of relationships with suppliers and customers, as well as horizontal consisting of lateral and internal partnerships.

Wheelen et al. (2015) proposed the concept of cooperative strategies that are used to create a competitive advantage in an industry by working with other companies. Hsiu-Fen Lin supposes:

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