The Future of Disruptive Innovationto Strengthen Competitive Advantages in Economics, Management and Accounting

Harry M Zen

CFO Telkom Group

Pontianak, Oktober’18

Education Background

Professional Career

2016 – Present : CFO PT Telkom Indonesia

2008 – 2015 : President Director

PT Credit Suisse Securities Indonesia

2007 – 2008 : Director Barclays Capital

2001 – 2008 : Co-Head Investment Banking,

PT Bahana Securities

1996 – 2001 : AVP Corporate Banking - Citibank

Summary03

Telkom at a Glance01Disruptive Innovation to Strengthen

Competitive Advantages in Economics &

Management Accounting02

Outline

Pepper

Humanoid robot

Telkom Indonesia at a Glance

Government Public

52,09 % 47,91 %

listed in

48 Subsidiaries

T I M E S

Portfolio

[4]

Be the King of Digital in the Region Lead Indonesian Digital Innovation & GlobalizationMissionVision

Source: Company information, data as of 30 June 2018, OpenSignal. Note: (1) Refers

to national 2G cellular coverage.(2) Excludes sub-sea network.

(3) Part of Telkom’s sub-sea network that adds to a total fiber optic backbone network of 157,300km.

MANADO

SANGATA

SAMBASENTIKONG

SINTANG

SANGGAU

PONTIANAK

SINGAPORE

BATAM

KETAPANG

KERAYA

BONTANG

BALIKPAPAN

PALANGKARAYA

GORONTALO

PALU PARIGI

TERNATE

LABUMA

SANANA

LUWUK

TONGKU

TOBADAK

TIRAWUTA

KENDARIMAROS

TAKISUNG BATU LICIN

BANJARMASIN KOTABARU

KOLAKA

MAKASAR

BAU-BAU

BATAUGA

WANGI-WANGI

WEDA

NAMLEA

MASOMI

AMBON

SORONG

MANOKWARI BIAKSARMI

JAYAPUR

DINTUNI

FAKFAK

KAIMANA

TIMIKA

TUAL

MERAUKE

DUMAI

SMCS

Slt Panjang

PEKANBARU

ACEH

LHOKSCUMAWE

NUNUKAN

BAKONGAN

MEDAN

TARAKAN

SIBOLGA

NIAS

PADANG

JAMBI

TUA PEJAT

BENGKULU

RUPIT

LUBUK LINGGAU

TALANG UBI

BATURAJA

PALEMBANG

KRUI P. PRAMUKA

LAMPUNG

CIWANDAN

BANDUNG

PANGANDARAN PARIGIYOGYAKARTA

SEMARANGJAKARTA

CIREBON

MALANG

GRAJANGAN

SURABAYA

SINGARAJA

SUMBAWAMATARAM

DENPASAR

WAINGAPU

MAUMERE

KUPANG

LARANTUKAKULARAHI

ATAMBUA

MALAKA TENGAH

Legend:

: <2015

: 2015

: 2016

: 2017

: Indonesia Global Gateway (2018)(3)

: Mobile network coverage

Homes passedTowersMobile network BTSOptical

distribution portsPoint of Presence

Fiber optic

backbone

99%(1) 176k 30k 20.4m >160K KM 8.0m 42

Telkom’s nationwide presence

[5]

Telkom-3S(118 ET)

Merah Putih(108 ET) Telkom-2

(157ET)

Disruptive Innovation to Strengthen Competitive Advantages in

Economics & Management Accounting

Global phenomenon..

[7]

In 60 second, remarkable things happening on our connectivity

and...new disruptive

phenomenons are happening

Ride-hailing

72 Bn

Retailer

352 Bn

Fintech

18,5 Bn

Sources: businessinsiders; statista

Disruption?

Disruption introduces a conventional business model to a new journey…

Disruptive innovation is an innovation that

creates a new market and value network

and eventually disrupts an existing market

and value network, displacing established

market leaders and alliances

True disruption has to create new value

and radically different customer

experience to be the real game changer.

[8]

Digital Transformation

[9]

Why we need to transform…

Digital innovations impacting to economy & challenges

[10]

1. Creating an additional 3.7 million jobs by 2025; 1

2. Generating up to 80% higher growth in revenue for small and medium

enterprises (SMEs); 2 and

3. Adding an additional 2% per annum in GDP growth by increasing

broadband penetration rates and usage of digital technologies by SMEs.2

4. Indonesia become the Largest Digital Economy in ASEAN by 2020

1: Mckinsey&Company, Unlocking Indonesia’s Digital Opportunity (2016), p. 15

2: Deloitte Access Economics, SMEs powering Indonesia’s success (2015)

Challenges

CAPEX turnover/ ROIC Market readiness-ARPU & Margin Change management, Transformation

What Management accounting or finance looks like a head..

[11]Sources: PwC; Hacketgroup

Prepare and wide open to technology driven finance

[12]Sources: McKinsey

How Technology Disruptions will Change Accounting Profession?

[13]

Challenge

1.Graduate recruitment at economist, accountantscould fall significantly due to the impact ofincreasing automation and artificial intelligence.

2.The accountants most likely to be replaced by robots in the next 20 years.

3.What potentially might change:

1.Automate admin type accounting & finance tasks.

2.Reduce the need for volume manual audit processes (e.g. use of data analytics).

3.Blockchain promises a world where all transaction can be locked, viewed and monitored in a real time.

Opportunities

1.Very fast growth of FinTech, Start-up companiescreates more advisory opportunities.

2.The use of technology can reduce significantlyaccounting/finance processes.

3.The role of economist, accountant will move tomore analytical and strategic type of job.

Sources: Formever

Robotic invoicing & accounting process

[14]

[15]

Thank you