The Institutional Governance in the Strategic

Bisnis & Birokrasi, Jurnal Ilmu Administrasi dan OrganisasiInternational Journal of Administrative Science & Organization, September 2015 Volume 22, Number 3

INTRODUCTION

Information and Communications Technology (ICT) has become an integral part of everyday life of our society and nation (Ministry of Communications and Information Technology, White Book, 2012). In Indonesia, the priority of ICT development is emphasized on ICT infrastructure development and human resources (HR) development in the field of ICT.

The ICT infrastructure development, among others, is performed through the development of Palapa Ring backbone network, which assists telecommunications operations and the provisions of ICT infrastructure to rural areas. The infrastructure development in the rural areas includes the developments of Sub-district Internet Service Center (Pusat Layanan Internet Kecamatan-PLIK), Sub-district Mobile Internet Service Center (Mobil Pusat Layanan Internet Kecamatan-MPLIK),

The Institutional Governance in the Strategic Restructuring of the Information and Communication Technology Universal

Service Obligation to Strengthen National Competitiveness

WILOPO AND RACHMA FITRIATI The Faculty of Administrative Science, University of Brawijaya, Indonesia;

The Faculty of Administrative Science, Universitas Indonesia, [email protected] ; [email protected]

Abstract. The information and communication technology universal service obligation (ICT USO) was an instrument of the policy of the government in order to overcome the ICT development gap. Unfortunately, this instrument could not provide the most favorable value to the community due to the lack of synchronization between the Central Government and the Local Administrations in the ICT USO activity. With the use of the institutional-based view (IBV) theory, which was enriched with the New Institutional Economic Sociology (NIES), this study used the soft systems methodology based-action research that was enriched with social network analysis. The results of this study showed that (1) the governance structure in the ICT USO activity did not run well; (2) the absence of the synchronization of the ICT USO activity between the central government and the local administrations; (3) the absence of the harmonization of the relations between BP3TI with the local administrations; (4) the lack of the involvement of the local administrations including the social institution of the community as the intermediary organization. Subsequently, there was a necessity for a strategy in the formulation, the implementation, and the control in the ICT USO activity on the mechanism of the dynamics of relations between government levels so that it could provide the best service to the community. Therefore, the development of an efficient ICT USO would encourage the realization of a prosperous information community with high levels of competitiveness. Meanwhile, the contribution of the novelty in this research paper was to answer the strategic restructuring on various levels of policy—micro, meso, and macro in developing a governance structure that could synchronize the strategy in the ICT USO activity with the hybrid of IBV and NIES.

Keywords: economic sociology, institutional based view, new institutionalism, social network analysis, soft systems methodology, strategic restructuring

Abstrak. Information communication technology service obligation universal (ICT USO) merupakan instrumen kebijakan pemerintah dalam mengatasi kesenjangan pembangunan ICT. Sayangnya, instrumen ini belum memberikan nilai optimal kepada masyarakat karena terdapat ketidak-sinkronan antara Pemerintah Pusat dan Pemerintah Daerah dalam kegiatan ICT USO. Dengan menggunakan teori Institutional Based View(IBV) yang diperkaya dengan New Institutional Economic Sosiology(NIES), kajian ini menggunakan metode penelitian Soft Systems Methodology based-Action Research diperkaya dengan Social Network Analysis. Hasil kajian menunjukkan (1) belum berjalannya governance structure dalam kegiatan ICT USO, (2) belum adanya sinkronisasi kegiatan ICT USO antara pemerintah pusat dan daerah; (3 belum ada harmonisasi hubungan antara BP3TI dengan pemerintah daerah; (4) kurangnya keterlibatan pemerintahan daerah termasuk lembaga sosial masyarakat sebagai organisasi antara. Untuk itu, perlu adanya strategi dalam perumusan, pelaksanaan, dan pengendalian dalam kegiatan ICT USO pada mekanisme dinamika hubungan antar level pemerintah sehingga dapat memberikan layanan terbaik pada masyarakat.Dengan demikian, pembangunan ICT USO yang berdaya guna mampu mendorong terwujudnya masyarakat informasi yang sejahtera dan memiliki daya saing tinggi. Sementara kontribusi keilmuan (novelty) dalam kajian ini adalah menjawab retrukturisasi strategic (Strategic Restructuring) pada berbagai hierarki kebijakan—mikro, meso, dan makro dalam membangun struktur tata kelola (governance structure)yang mampu mensinkronkan strategi dalam kegiatan ICT USO dengan hibrida IBV dan NIES.

Kata kunci:economic sociology, institutional based view, new institutionalism, social network analysis, soft systems methodology, strategic restructuring


Desa Berdering (Ringing Villages), Desa Pintar (Smart Villages), Desa Informasi (Information Villages) projects, etc. Meanwhile, the ICT HR development through the e-literasi (e-literation) program is, among others, aimed to improve both the ICT knowledge and the public participation in operating skills, engineering and innovation of work, as well as information and communication dissemination program on ICT development.

Since 2012, there are four important parts of the ICT development in Indonesia, namely: (1) broadband economy, (2) digital broadcasting, (3) e-commerce, and (4) rural ICT. The development of broadband becomes an important aspect in supporting the economic activity of the nation so therefore strategic measures are needed in order to accelerate the development of broadband in Indonesia. The development of technology in the field of broadcasting has introduced the switch from analog technology to digital technology. As a result, it requires an attention from every stakeholder so that broadcasting can still be held and received by the citizens. The e-commerce activity in Indonesia has also experienced an improvement with the development of Internet as well as the convenience in performing electronic transactions. The rural ICT is an important aspect of the equitable distribution of ICT development in Indonesia in order to provide both accesses and opportunities to every member of the society in achieving information society. In the end, the ICT development is expected to support the realization of the economic strengthening of Indonesia based on information society.

The ICT development gap has become the problem for most countries. In Indonesia, the level of the provision of telecommunications access grew

rapidly from 60 million access (2005) to 198 million access (2009) with the total penetration of 86 percent (Priyatna, 2011). Unfortunately, the ICT teledensity in the rural areas has not yet matched the huge increase of the urban teledensity although 60 percent of the society lives in the rural areas.

In 2009, there were still 31,824 villages that did not receive telecommunications service. The telecommunication gap from one area to another in Indonesia is obvious from the fact that, in 2008, 86 percent of telecommunication infrastructure in the country only covers Sumatera, Java, and Bali. Meanwhile, the eastern region of Indonesia only enjoys 14 percent of the telecommunication infrastructure in the country. The apparent telecommunication gap occurs between rural and urban areas in Indonesia, according to a data from the Telecommunications and Information Funding Provision Management Agency (Balai Penyedia dan Pengelola Pembiayaan Telekomunikasi dan Informatika-BP3TI) in 2010. The teledensity in the urban areas, such as Jakarta, Bogor, Tangerang, Depok, Bekasi, and other area, has reached 35 percent. Meanwhile, the teledensity in the rural areas has only reached 0.25 percent.

For that reason, the Ministry of Communications and Information through the BP3TI has started to pay more attention to ICT USO (the universal service obligation) penetration policy between urban and rural areas. Considering that, in 2009, the ICT penetration in the urban areas had reached 125 times bigger than the rural areas (0.2 percent). This shows that there are still many villages that yet to get the benefit from telecommunication access (Figure 1).

Meanwhile, other countries have different levels of teledensity. Teledensity is a common indicator in the

Figure 1. The Map of Telecommunication Penetration in the Rural and Urban Areas of IndonesiaSources: Sura, 2007

WILOPO AND FITRIATI, THE INSTITUTIONAL GOVERNANCE 201

field of telecommunications to reveal the number of installed Public Switched Telephone Network (PTSN) telephone connection unit per 100 people. From 2005 to 2009, the teledensity of cellular phones in Indonesia is still below the teledensity of ASEAN. The teledensity of Indonesia only surpassed Laos, Cambodia, and Myanmar. During the time period, there was an upward trend of mobile-cellular teledensity in ASEAN. In fact, in Vietnam, the teledensity significantly soared to 200 percent in 2008 (see Figure 2).

In order to reduce the ICT gap, several countries employ an instrument that is known as Universal Service Obligations (USO). According to Cremer and Gasmi, Grimaud, Laffont (2001), USO is a the cornerstone of industrial policy and regulation in the main network industry for most industrial and developing countries, where telecommunications operators are obliged to provide high-quality basic service at an affordable price to all users. In Indonesia, based on the Communication and Information Technology Ministerial Regulation No.32/PER/M.Kominfo/10/2008, the government regulated the Telecommunications Universal Service Obligations (Kewajiban Pelayanan Universal Telekomunikasi-KPUT) on Telecommunications KPU provision locations, namely the Telecommunications Universal Service Regions (Wilayah Pelayanan Universal Telekomunikasi-WPUT) that include: lagging regions, remote areas, pioneering areas, border areas, and economically unfeasible areas, as well as regions that are yet reachable to telecommunications access and service. This in reference to the Communication and Information Technology Ministerial Regulation No. 32/PER/M.KOMINFO/ 10/2008 on Universal Service Obligations, with the KPU/USO activity products that include (1) Desa Dering (Ringing Villages), (2) Desa Pinter (Smart Villages), (3) Pusat Layanan Internet Kecamatan (Sub-

district Internet Service Center, (4) Mobile PLIK, and (5) Sub-district Internet Service Monitoring and Information Management System.

The purpose of this policy includes: (a) to overcome digital gap (the equality of access to information and communication technology; (b) to sustain and to support economic activity, establishing defense and security, as well as educating the people; (c) to fulfill the commitment of Indonesia in WSIS (World Summit Information Society). Referring to the Communication and Information Technology Ministerial Regulation No. 11/Per/M.KOMINFO/4/2007, which was changed into the Communication and Information Technology Ministerial Regulation No. 38/Per/M.KOMINFO/9/ 2007, the central government is required to make investment through ICT USO projects with the purpose of guaranteeing the growth of telecommunications industry, which later will create a chain effect for the growth of other types of industry, especially the economic growth in the rural, remote, and border areas. The government has already conducted a variety of ICT USO activities to expand the ICT network in the rural and remote areas in order to develop the national competitiveness (Fitriati, 2013). Therefore, the government has carried out various efforts through ICT USO activities such as: (1) villages that received telecommunication access or as many as 33,184 villages (out of 72,800 villages in Indonesia) ringing villages are targeted in 2011 to be 33,184 villages and 91.73 percent reached (30,441 or 91.73 percent villages); (2) the provincial capitals that possess National Internet Exchange are targeted to reach 11 provincial capitals as of 2011 and, in reality, the number reached 8 provincial capitals (80.6 percent); and villages that received Internet access are targeted to reach 14,560 villages in 2011. Based on this target, 46 percent is achieved or 6,694 villages.

Figure 2. The Teledensity of Cellular Phones in Indonesia and Other ASEAN CountriesSources: The Data Center of the Ministry of Communications and Information (2010)


According to a study of LIRNE Asia’s Sector Performance Review or Telecom Regulatory Environment-TRE (2011) toward the ICT USO performance evaluation, it is revealed that Indonesia among countries with lowest performance (see Figure 3). The TRE measurement dimensions include market entry, access to scarce resources, tariff regulation, universal service obligations, regulation of anticompetitive practices and quality of service. The Government of Indonesia is considered to be unsuccessful in utilizing Universal Service Fun. This is due to the fact that there is a different point of view: the Government of Indonesia put more emphasize on the penetration level of technology, whereas TRE Research Project put more emphasize on the social dimension as illustrated on the figure 3.

The study of Van Dijk about the so-called ‘digital divide’ is almost similar with the current condition in Indonesia. The digital gap can be understood as the inequality of four types of access that chronologically listed as follows: (1) motivation, (2) physical access, (3) digital skills, and (4) different usage. This demonstrates that the gap has really shifted from the first type to the last type.

The study of Van Dijk shows that digital gap has a part that is not connected and exempted from the society groups that are isolated from the aspects of social network and media network connection. These society groups consist of the lowest social class, unemployed, especially parents, minorities, and large immigrant groups. In comparison with other society groups, these groups participate less. Therefore, the inequality of digital gap and digital skills can be reduced with a policy that is intentionally made for labor market, for employee training, and for education improvement on every level, including adults.

In addition, Symeou and Pollitt (2007) conducted a research to examine the relation between telecommunications technology and the obfuscation of telecommunications market. The study results showed the existence of a policy that caused the nature of

technology to be outdated on technological convergence. Particularly in smaller countries, the policy should be customer-oriented. The postulate of Stigler (1975) suggested that an industry must cover products and services that in the long-term tend to ought to realize substitution relationships, including regulations.

The results of a study conducted by Wilopo (2013) on USO, revealed that the improvement of ICT USO service activity is an institutional issue of which the solution would need institutional approach. Meanwhile, a study conducted by Fitriati et al (2013) on 6 (six) cities in Indonesia indicated that one of the factors that constrained the BP3TI performance in KPU/USO was the KPU/USO service activity that was not significantly improved, as well as the existence of a gap on ICT penetration level. BPPTI as the agency that applied Public Service Agency Financial Management System (Pola Pengelolaan Keuangan Badan Layanan Umum-PPK-BLU), or according to Crandall, semi-autonomous revenue authority (Terkper, 2008, Crandall, 2010), has sufficient resources to conduct the monopoly in opening communication and information technology access all over Indonesia. In the context of market-based view approach, BPPPTI has the sole authority as regulated on the Ministerial Regulation on the Communication and Information No. 18/PER/M/KOMINFO/11/2010.

The purpose of this research paper is to analyze the dynamic of institutional governance in restructuring ICT USO strategic activity to build the competitiveness of Indonesia. In relation to the discussion of the concept of competitiveness, the literature on this particular subject showed that the competitiveness at the firm level is divided into two view, which are (1) market-based view or MBV (Chamberlain, 1932; Bain, 1956, Caves and Porter, 1977, 1978, Porter, 1980 and 1985, Gilbert, 1989, Tallman, 1991 in Fitriati, 2014); and (2) resource-based view or RBV (Barney, 1986a, 1991, 2007; Grant,1991;Penrose, 1959;Peteraf, 1993;Wernerfelt, 1984, Prahalad and Hamel, 1990, Hamel and Prahalad, 1994 in Fitriati, 2014).

Figure 3. Sector Performance Review (SPR) - TRE Scores SummarySources: ICT Sector Performance Review for Indonesia, 2011


The MBV and RBV approaches suggested that internal and external factors influence company performance (Simatupang, 2013; Hansen and Wernerfelt, 1989; Hawawini, Subramanian and Verdin, 2003; Roquebert, Philips and Wesfall, 1996; Rumelt, 1991; Tvorik and McGivern, 1997). As for the magnitude of the role of reach factor, it would depend on: (1) the context of competitive environment (Makhija, 2003; McGahan and Porter, 1997; Roquebert et al., 1996); (2) the context of industry (McGahan and Porter, 1997; Silverman, Nickerson and Freeman, 1997). On the other hand, there is a criticism toward MBV and RBV because these models are deemed to be less attentive toward context (Narayanan and Fahey, 2005; Akio, 2005; Peng, 2009).

In relation to the restructuring of strategy through coordinating and synchronizing ICT USO institutions in order to achieve institutional competitiveness, there is a notion to present new theoretical perspective that could overcome the weakness of MBV and RBV strategic approaches. Barney (1991) viewed that the RBV concept that cover all of the assets, capacity, organizational process, company attributes, information, knowledge, etc was controlled by a company that enable the company to understand and apply the strategy in improving the efficiency and the effectiveness (Barney, 1991; Daft, 1983). In the context of the RBV approach, BPPPTI already has the resources that can encourage the increase of main performance, and this can also lead to a sustainable competitive excellence (Hoffer and Schendel, 1978; Wenerfelt, 1984).

The MBV and RBV approaches are considered to yet have the strength to generate the policies that have the implication on the improvement of the public preference toward ICT. In fact, the results of a study conducted by Orlikowski and Barley (2001) indicated that there was an overlap between the study of information technology and the study of organization. The combination between the perspectives in the study of information technology and the study of organization could take place with the existence of the institutional-based view. The institutional-based view or IBV was constructed by Oliver (1997) and Peng (2002, 2006, 2008, 2009) with the addition of institutional perspective that become an important part in the strategy of competitiveness. The background of the introduction of IBV (Oliver, 1997; Peng, 2009) was because the study on business organizations in the West did not discuss the special relations between strategic choices institutional framework (Peng, 2002).

Still under the discussion of ICT, Wilson III (2004) argued that the ICT approach with the study of organization would need a complementary hybrid on various levels of analysis—micro-level, meso-level. The IBV argumentation that was constructed by Peng (2009) could not answer the construction of Wilson III (2004) on the hybrid of ICT and the study of organization. In order to bridge this study incorporates the new institutionalism in economics and sociology (NIES) theoretical approach (Nee, 2005). The NIES model explained the relations and the interactions between formal institutions with

the social network and the norm on macro-level, meso-level, and micro-level. The relations and the interactions between the two contribute to the dynamics in the market. In this research paper, the conception of macro-level, meso-level, and micro-level used the economic paradigm that is included in the New Institutionalism in Economics and Sociology or NIES (Nee, 2003 and 2005). This is the perspective that is used in viewing the opposite problems on the restructuring of the strategy through the synchronization of ICT USO activity on macro-level, meso-level, and micro-level in the areas of ICT USO program implementation in Indonesia, with the approach of soft systems methodology based-action research (SSM-based AR) that is enriched with social network analysis.

This research paper utilizes the approach of action research (Creswell, 2013) with the focus of the ICT USO discussion during the 2010-2013 time period with the five (5) provinces as the regions of the study, which are West Sumatra, South Sulawesi, West Java, East Java, and West Nusa Tenggara as the regions in which the ICT USO program in Indonesia are implemented with the limitations of not conducting institutional description that is instrumental in the evaluation on every institution or achievement of the implementation ICT USO program. In addition, this research paper did not evaluate the existing roles, including the roles of the public, NGOs, academics, or other actors.

The approach research that is selected for the purpose of this study is the research paper with the category of systems thinking (Senge, et al, 1990, Senge 1999) or soft systems methodology-based action research or SSM-based AR (Uchiyama 1999, 2009); through the enrichment of the cultural stream of analysis (Checkland, 1981, Checkland and Scholes, 1990; Checkland and Poulter, 2006; Hardjosoekarto, 2012. 2012a, 2012b, 2013; Fitriati 2013 and 2014). In contrast to other types of research approach, such as laboratory experiment—which struggles to maintain its relevance to the real world—the ‘laboratory’ of the action research is the real world itself.

Checkland and Poulter (2006) described the 7 stages of SSM principles based on four primary processes. The first process is searching problematic situation (stage 1 and 2). The second process is the construction of a relevant model to explore the problematic situation based on different world view (stage 3 and 4). The third process is establishing questions based on the model that is previously constructed to discover desirable and feasible changes (stage 5). The fourth process is the determination and taking actions that would generate better changes for the problematic situation (stage 6 and 7).

The SSM-based AR is selected because the world (social world) is viewed as a complex, problematic, and mysterious matter that is characterized by clashes of world view (Checkland and Poulter, 2006:21-22) as well as ‘soft’, ill-structured (Checkland, 1981:95). This study requires the active and deliberate self-involvement of researcher in the context of his/her investigation or in other words the collaboration between the researcher


and the “owner of the problem” is required (McKay and Marshall, 2001). The SSM-based AR is the methodology for experience-based knowledge (Checkland and Scholes, 1990) that move between the reality or the perception about the real world and the actuality or the feeling about the real world (Uchiyama, 1999). The SSM-based AR study is enriched with social network analysis (SNA) that accommodate between the reality that is often reflected with hard problems and the actuality that is often reflected with soft problems through experimental-based knowledge (Uchiyama, 2009). The SNA has become the new trend in the past few years.

The SNA is the method to examine the structure of social relations within a group to uncover the formal relations between actors (Valdis 2014; Ulrike, 2001). First, the SNA is a sociological paradigm to analyze the structural pattern of social relations (Wellman and Berkowitz, 1988; Scott, 1991; Hanneman and Riddle, 2005; Fitriati, 2014). Second, the SNA is seldom used on business and public policy, so therefore is considered to be the new aspect of this research (Hendratno and Fitriati, 2015). The visualization of SNA is aimed to describe the relations between nodes. Microsoft NodeXL has automatically calculated various kinds of centrality, betweenness centrality, closeness centrality, and eigenvectors, where the calculation from both types of centrality has been explained.

In degree is the measurement of the degree centrality that could indicate that the actor is the most accessed by other actors or the actor that often take the role as an object. Out degree is the measurement to indicate the actor that most often access other actors or most often take the role as a subject in the SNA network. Betweenness is another measurement to illustrate the centrality degree of node activity or the capability in network that is decoded in measuring the capability to control the information flow in the network. Closeness centrality is the degree of the criteria that is applied on nodes in the network, and illustrate how close the nodes to other people in the network, or the ability of the actors within then network to access other people.

In this study, the purpose of the SNA is to analyze the social network as well as to examine the structure of the official relations between the actors in the ICT policy. In the measurement, the stages of calculations by the Node XL software are as follows: (1) Collecting all regulations that are related to the ICT USO as the SNA data source. The regulations that are related to the ICT USO are: (1) PP 38/2007 on the Government Affairs Division between the Central Government, Provincial Government, and City/Regency Government; (2) the Communications and Information Technology Ministerial Regulation No 23/2009 on the Implementation Guidelines of the Government Affairs on Posts and Communications; (3) the Communications and Information Technology Ministerial Regulation No 32/2008 on the Telecommunications Universal Service Obligations; (4) the Communications and Information Technology Ministerial Regulation No 18/2010 on the Organization and Work Procedures of the Telecommunications and Information Technology

Financial Management Agency. All of the regulations that have been mentioned here would later be used as the reference to look for the actors that are related to the implementation of the ICT USO policy in Indonesia; (2) Node property as the subject or the object in the worksheet ‘vertices’ legal relation; (3) In relation to the node as the subject and the object through the predicate on the worksheet ‘edges’; (4) the process of analyzing SNA software to display the metric analysis and the visualization; as well as (5) obtaining the results of the SNA metric analysis and visualization.

RESEARCH METHOD

This research paper utilizes the approach of action research (Creswell, 2013) with the focus of the ICT USO discussion during the 2010-2013 time period with the five (5) provinces as the regions of the study, which are West Sumatra, South Sulawesi, West Java, East Java, and West Nusa Tenggara as the regions in which the ICT USO program in Indonesia are implemented with the limitations of not conducting institutional description that is instrumental in the evaluation on every institution or achievement of the implementation ICT USO program. In addition, this research paper did not evaluate the existing roles, including the roles of the public, NGOs, academics, or other actors.

The approach research that is selected for the purpose of this study is the research paper with the category of systems thinking (Senge, et al, 1990, Senge 1999) or soft systems methodology-based action research or SSM-based AR (Uchiyama 1999, 2009); through the enrichment of the cultural stream of analysis (Checkland, 1981, Checkland and Scholes, 1990; Checkland and Poulter, 2006; Hardjosoekarto, 2012. 2012a, 2012b, 2013; Fitriati 2013 and 2014). In contrast to other types of research approach, such as laboratory experiment—which struggles to maintain its relevance to the real world—the ‘laboratory’ of the action research is the real world itself.

Checkland and Poulter (2006) described the 7 stages of SSM principles based on four primary processes. The first process is searching problematic situation (stage 1 and 2). The second process is the construction of a relevant model to explore the problematic situation based on different world view (stage 3 and 4). The third process is establishing questions based on the model that is previously constructed to discover desirable and feasible changes (stage 5). The fourth process is the determination and taking actions that would generate better changes for the problematic situation (stage 6 and 7).

The SSM-based AR is selected because the world (social world) is viewed as a complex, problematic, and mysterious matter that is characterized by clashes of world view (Checkland and Poulter, 2006:21-22) as well as ‘soft’, ill-structured (Checkland, 1981:95). This study requires the active and deliberate self-involvement of researcher in the context of his/her investigation or in other words the collaboration between the researcher and the “owner of the problem” is required (McKay and Marshall, 2001). The SSM-based AR is the methodology for experience-based knowledge (Checkland and Scholes,


1990) that move between the reality or the perception about the real world and the actuality or the feeling about the real world (Uchiyama, 1999). The SSM-based AR study is enriched with social network analysis (SNA) that accommodate between the reality that is often reflected with hard problems and the actuality that is often reflected with soft problems through experimental-based knowledge (Uchiyama, 2009). The SNA has become the new trend in the past few years.

The SNA is the method to examine the structure of social relations within a group to uncover the formal relations between actors (Valdis 2014; Ulrike, 2001). First, the SNA is a sociological paradigm to analyze the structural pattern of social relations (Wellman and Berkowitz, 1988; Scott, 1991; Hanneman and Riddle, 2005; Fitriati, 2014). Second, the SNA is seldom used on business and public policy, so therefore is considered to be the new aspect of this research (Hendratno and Fitriati, 2015). The visualization of SNA is aimed to describe the relations between nodes. Microsoft NodeXL has automatically calculated various kinds of centrality, betweenness centrality, closeness centrality, and eigenvectors, where the calculation from both types of centrality has been explained.

In degree is the measurement of the degree centrality that could indicate that the actor is the most accessed by other actors or the actor that often take the role as an object. Out degree is the measurement to indicate the actor that most often access other actors or most often take the role as a subject in the SNA network. Betweenness is another measurement to illustrate the centrality degree of node activity or the capability in network that is decoded in measuring the capability to control the information flow in the network. Closeness centrality is the degree of the criteria that is applied on nodes in the network, and illustrate how close the nodes to other people in the network, or the ability of the actors within then network to access other people.

In this study, the purpose of the SNA is to analyze the social network as well as to examine the structure of the official relations between the actors in the ICT policy. In the measurement, the stages of calculations by the Node XL software are as follows: (1) Collecting all regulations that are related to the ICT USO as the SNA data source. The regulations that are related to the ICT USO are: (1) PP 38/2007 on the Government Affairs Division between the Central Government, Provincial Government, and City/Regency Government; (2) the Communications and Information Technology Ministerial Regulation No 23/2009 on the Implementation Guidelines of the Government Affairs on Posts and Communications; (3) the Communications and Information Technology Ministerial Regulation No 32/2008 on the Telecommunications Universal Service Obligations; (4) the Communications and Information Technology Ministerial Regulation No 18/2010 on the Organization and Work Procedures of the Telecommunications and Information Technology Financial Management Agency (BP3TI). All of the regulations that have been mentioned here would later be used as the reference to look for the actors that are related to the implementation of the ICT USO policy in Indonesia; (2) Node property as the subject or the object

in the worksheet ‘vertices’ legal relation; (3) In relation to the node as the subject and the object through the predicate on the worksheet ‘edges’; (4) the process of analyzing SNA software to display the metric analysis and the visualization; as well as (5) obtaining the results of the SNA metric analysis and visualization.

RESULT AND DISCUSSION

The development strategy of ICT USO did not only encounter the problem of ICT technology, but also involved the management of strategy, institution, social, and economy. The study on ICT policy will come across the problems that complexly interplay between the contexts of ICT and social (Kling, 2000; Orlikowski, 2000; Fountain, 2001; Orlikowski and Iacono, 2001). Orlikowski and Iacono (2001) discovered recursive and complex relations between ICT and social structure. As a consequence, the results of ICT projects would be extremely uncertain and could not be predicted easily. The results of the study conducted by Orlikowski and Iacono (2001) provided an illustration that the study of ICT and the study of organization could not be done with the approach that only perceived reality as an issue that could be constructed just as with hard approach or positivistic. The ICT artifacts did not only consist of technological artifacts, but also social and organizational aspects surrounding its artifacts. This concept of ICT was designed to catch the complex behavior that related to the spread (Wilson, 2004). Hasan and Kazlauskas (2009) mentioned that the condition of the ICT problem “...ill-defined, with shifting definitions and multiple elements whose conflicting objectives necessitate resolution through a complex, holistic perspective …” or known as “wicked problems” (Mingers, 1997). Wicked problems in this context would be the opposable views between the government, the evaluator, the policy-maker, the local administrations, and the community who were involved or affected, which was a complex and pluralist systemic problem.

In Indonesia, for the ICT USO activity, the construction of the problem was located on the institutional arrangement. In order to boost and open the ICT access on the parts of Indonesia that could not be accessed by ICT service providers, the Ministry of Communications and Information Technology formed the Telecommunications and Information Technology Financial Management and Provider Agency. In Indonesia, the ICT USO did not encounter the complexity of the technological, organizational, and social problems, just as illustrated on the interview results below:

“ ... the focus of the ICT USO is indeed on the isolated villages. After we placed it there, then we provided the information to the local community. The information would include the government program, the benefits, and how to operate it. However, the issue here is that how far is the contract between the central government and the operator? Because from what we hear, the operators are merely those who won the bid, the assets are belonged to them, and their service was paid by


Node/actorIn-

DegreeOut-

DegreeBetweenness

CentralityCloseness Centrality

Eigenvector Centrality

Page-RankClustering Coefficient

The Communications and Information Technology Minister

10 5 59.619 0.063 0.137 2.179 0.144

Implementer/Provider 6 3 30.548 0.056 0.124 1.732 0.250

The Ministerial Regulation No. 32/2008

1 5 7.071 0.045 0.088 1.125 0.450

The Director General of Posts & Information Technology

4 4 7.976 0.050 0.107 1.308 0.367

Provincial Administrations

2 4 30.143 0.050 0.092 1.420 0.267

City/Regency Administrations

2 2 3.571 0.043 0.069 0.936 0.417

The Ministerial Regulation No 23/2009

1 3 1.000 0.040 0.055 0.735 0.333

BPPPTI 3 2 4.000 0.040 0.068 0.928 0.250

Community 2 1 0.000 0.042 0.068 0.705 0.833

PP 38/2007 0 3 1.000 0.040 0.055 0.735 0.333

Society/SMEs 2 0 0.000 0.034 0.039 0.525 0.500

The Director of Special Telecommunications & USO

1 1 0.000 0.038 0.034 0.553 1.000

The Ministerial Regulation No. 18/2010

1 3 3.071 0.040 0.044 0.767 0.167

Table 1. The SNA Mathematics Calculation

Sources: Wilopo (2013)

Figure 4 The Visualization of the SNA Mapping – The Minister of Communications and Information TechnologySources: Wilopo, 2013


the central government. However, the problem is should what they provide is apparently not compatible with the service that is introduced by the central government, has the central government already controlled how far the utilization by the community goes?” (The West Sumatra Agency of Communications and Information Technology).

Based on the Table 1, the role of the Minister of Communications and Information Technology is shown to have the highest level of centrality degree especially on the centrality in degree. In this matter, the Minister of Communications and Information Technology is the most central and active node in the network, with the highest ability to be accessed by other nodes and the biggest control over the information flow in the network. The Minister and the Ministerial Regulation No 32/2008 have the highest ability to access other nodes in the network.

The next role in the centrality in degree, the second one, is the implementer/provider. The level of the access by other nodes on the implementer/provider showed the second position. However, the ability to access other nodes was at a low level of out degree. The implementer/provider was at a central position because a quite high value of both the betweenness centrality and the closeness centrality.

Based on the results of the analysis toward the SNA regulations, there were three nodes or important actors that were instrumental in the regulations. The calculations of the centrality did only observe the aspect of the centrality degree either in-degree or out-degree, but as well as the calculations on the betweenness, closeness, and the graft formation that indicated that these actors were very central in the network. These nodes were the Communications and Information Technology Minister, Implementer/Provider, and the Ministerial Regulation No. 32/2008. These three nodes played important roles in the implementation of the regulations on the field. The level of success in the network of the relations as explained on Table 1 or the other way around would depend on these three nodes. These three actors had a high level of vulnerability should there was an occurrence of weaknesses that would affect the existence of the actors on other network. The centrality score of the Minister looked like the star network with the use of NodeXL (Figure 4).

Figure 4 showed that, in overall, the problem of ICT USO was at the institutional setting. This was reflected on the connection between the ICT USO planning that did not much consider the thoughts of the Local Administrations, and the absence of the role and the function of the Local Administrations in the allocation of the activity and the control toward the utilization of the ICT USO activity. The absence of control by the Local Administrations had led to many operators did not operate the ICT USO in line with mission of this activity, which was to overcome the ICT gap in the public.

In essence, the Local Administrations were the work partner of the BP3TI in implementing its main task and function. The obstacle that was encountered was the fact that the Local Administrations and the

BP3TI did not have clear and firm interconnectedness and, as a result, the implementation of the policy was ineffective. In accordance with the Government Regulation No. 38/2007 on the Division of the Affairs between the Central Government and the Local Administrations, the synchronization of the coordination of the activity between the Central Government and the Regency/City Administrations should be implemented immediately. The involvement of the Local Administrations should not only be limited to the recommendations about the regions that should be prioritized for the development of the Universal Service Obligations in the communications sector. In fact, the Local Administrations should have other authorities, such as proposing and supervising the program/activity that was implemented. The structure of the coordination should be agreed upon, such as in order for the Provincial Governments to be able to have the role as the coordinator of the activity on their respective provincial areas and be responsible to the Central Government.

The results of this study also showed the construction of the regulation that had power relation that was focused on two (2) actors, namely the Minister and the service providers, not on BLU. The problems on the meso-level were (1) The Local Administrations and the Central Government was not involved in the implementation of the activity, (2) the aspiration and the specific needs of the regions to the development plan were not fully accommodated, (3) the local ability was limited in taking the benefit of the USO development activity. For the operators or the service providers, the problems that appeared were related to the (1) the professionalism of the contracted implementer of the activity, and (2) the lack of accommodating the aspirations and the specific needs of the regions to the development plan. These problems were in line with the findings of power relation that was low between BPPPTI and the Local Administrations, either in the provinces or the regencies/cities, as follows:

“The coordination of the USO activity between the Central Government [BPPPTI] and the provincial administrations as well as the regency/city administrations is still lacking.” (The South Sulawesi Agency of Communications and Information Technology).“ … From what I know, the USO program toward the local administrations was more on the notification. Even for the details we asked ourselves. The locations and the regions to the BP3TI and the operators, while the communications to the operators and provinces were non-existent. We just see the list of locations that was distributed to the provinces … “ (The West Java Agency of Communications and Information Technology).

The results of the study also indicated that the important actor that had important roles in the regions were the Implementer and Provider of ICT USO. The implementer and provider had the task to provide the ICT USO to the community and to cooperate with the public and SMEs to operate the ICT USO. The regional actor that was selected by the BPPPTI without the involvement of the local administrations had led to the lack of synergy and benefit enhancement of the ICT


USO activity in the regional and community level. The results of the relations between the actors in the context of synchronization—between BPPPTI, Directorate General of Posts and Information Technology, Provinces, City/Regency Administrations, Organizers, Community, and other Ministries—was more focused and inclined to the interests of the organizers instead of the community. Should all of the actors want to access the community, they had to go through the Implementer and Provider. This had led to the ICT USO performance to be dependent on the Implementer and Provider alone. This reality had proved that the lack of optimization of the ICT USO activity was located on the institutional issue. The third stage of the SSM was the root definitions of relevant purposeful activity systems as means to catch or understand the essence of the purpose that should be achieved (Checkland and Scholes, 1990; Checkland and Poulter, 2006). The root definition did not exist in the real world. If it should be associated with the same terminology in the real world, then the root definition would be close to business goals, mission statement, specification, etc (Wilson, 2001).

The root definition of this research paper was “the restructuring of strategy through the synchronization of the ICT USO activity,” which was located on the system that was both owned and operated by the BPPPTI and the Local Administrations in order to harmonize the ICT USO activity through the synchronization of the policy on the governance structure between BPPTI, the Local Administrations, and the Service Providers

to guarantee the achievement of the institutional restructuring of the BPPTI to improve the ICT USO service. The selection of “Restructuring of the Strategy through the Synchronization of the ICT USO activity” as the system that was selected in the transformation process was due to the following points: (a) the Local Administrations considered the ICT USO activity was very important and it necessary for the people. However, during the implementation, there were many obstacles because of the lack of coordination between BPPPTI and the Local Administrations; (b) The big expectation from the Local Administrations for them to be involved in the ICT USO activity—that was not limited to the recommendations on the areas as well as supervision; (c) The complaints from the Local Administrations because the placement of the ICT USO activity was not through the coordination with the Local Administrations; (d) the mechanism of the discussion of the regional development from the village level to the government level was biased, and as a consequence it received many complaints from the Local Administrations.

The factual problem was the response to the position of the implementation of the existing regulations that were related to the ICT USO activity. The state

Customers Macro-level (BPPPTI, telecommunications agency); Meso-level (the Local Administrations and service providers); Micro-level (intermediary organization, user community)

Actors BPPPTI, Local Administrations, and Service Providers

Transformation The realization of the strategy restructuring through the synchronization of the governance of the ICT USO activity between BPPPTI, Local Administrations, and Service Providers

Weltanschauung The realization of the strategy restructuring through the synchronization of the ICT USO activity between BPPPTI, the local administrations, and the service providers that is very important to guarantee the achievement of the BPPTI Institutional and Governance Reformation

Environment 1. The obstacle with the BLU regulations2. The obstacle with the division of authority between the central and the regional governments on the ICT USO development3. The obstacle with the variety of the regional policy 4. The obstacle with the preference of the user community in the ICT USO activity

Table 2. CATWOE and 3E in Root Definition

Activity 1 Drafting the policy formulation framework by considering the following:• The aspiration of telecommunications providers • The results of the ICT USO and WPUT evaluation • The aspiration of the ministries/institutions • The improvement of ICT USO activity• The aspiration of the Local Administrations

Activity 2 Formulating the policy of the Directorate General of Posts and Information Technology

Activity 3 Forming the strategy restructuring team through policy synchronization

Activity 4 Formulating the National Strategic Plan (Stranas) & National Action Plan (RAN) for the ICT USO by the considering the regional needs and the ministries/institutions

Activity 5 Organizing the Central and Regional Coordination & Consultation Meeting for the ICT USO Stranas and RAN Planning

Activity 6 Refining the ICT USO Stranas and RAN Planning

Activity 7 Implementing the ICT USO National Action Plan

Activity 8 Monitoring/controlling the ICT USO activity in the regions

Activity 9 Establishing the strategy restructuring through the synchronization via the coordination in the governance structure of the ICT USO activity between BPPPTI, the Local Administrations, and Service Providers

Table 3. System Activity: the Restructuring of Strategy through the Synchronization of the ICT USO Activity


regulations that did not accommodate the interests of the actors at the meso-level would lead to a collective attitude to influence the state regulations. Nee (2005) explained that the collective action was the description of the efforts of the player from the meso-level to influence the institutional environment so that the state regulations could be adapted to the needs of the players on the meso-level to gain the economic benefits. Nee (2003) said that the economic benefits included the survival of the nonprofit organizations/companies.

In order to control the root definition of “restructuring strategy through the synchronization of the ICT USO

activity”, the CATWOE analysis could be used as the basic of the arrangement of the conceptual model (Table 2).

The RD as the most relevant illustration for the system on the meso-level of which the goal was to establish an institutional framework in order to guarantee the achievement of the BPPPTI institutional restructuring to improve the service of the ICT USO through the synchronization of policy on the governance structure between the BPPTI, the Local Administrations, and the Service Providers so that it could lead to the restructuring of strategy through the synchronization of the policy with minimum utilization of resources. On Table 3, we could see the system activity of the strategy of restructuring through the synchronization of the ICT USO activity of which the conceptual model could be observed on Figure 5.

The creation of the conceptual model can be achieved through the coordination in the governance structure of the ICT USO activity between BPPPTI, the Local Administrations, and the Service Providers, which is very important to ensure the achievement of the BPPPTI Institutional and Governance Reformation. Table 4 illustrated the criteria to measure the achievement of the conceptual model.

The creation of the conceptual model can be achieved through the coordination in the governance structure of the ICT USO activity between BPPPTI, the Local Administrations, and the Service Providers, which is very important to ensure the achievement

Figure 5. The Conceptual Model of System: Synchronization

E-Efficacy The strategy restructuring through synchronization through the coordination in the governance structure of the ICT USO activity by BPPPTI, the Local Administrations, and the Service Providers.

E-Efficiency Utilizing minimum financial source and time

E-Effectiveness Establishing the strategy restructuring through synchronization through the coordination in the governance structure of the ICT USO activity by BPPPTI, the Local Administrations, and the Service Providers.

Table 4. The Success Criteria for the Conceptual Model


of the BPPPTI Institutional and Governance Reformation. Table 4 illustrated the criteria to measure the achievement of the conceptual model.

The first activity that was conducted in this study was drafting the policy formulation framework by considering the aspiration of the telecommunications providers, the results of the ICT USO and WPUT evaluation, the aspiration of the ministries/institutions, the improvement of the ICT USO activity, as well as the aspiration of the Local Administrations. Therefore, this activity would be able to draft the construction of the framework in formulating the policy that is related to the strategy restructuring through the synchronization of the ICT USO activity. The output of this activity includes: (1) the presence of both data and information about the restructuring of the strategy through the synchronization of the ICT USO activity; (2) the mapping of the big issues on the restructuring of the strategy through the synchronization of the ICT USO activity; (3) the paper on the results of the framework on the ICT USO policy formulation in relation to the synchronization.

After the formulation of the framework was completed, the next activity would the policy formulation of the Directorate General of Posts and Information Technology of the Ministry of Information and Telecommunications of the Republic of Indonesia. As for the illustration of this activity, it would be as the following: (1) The drafting of the formulation of the policy was the main task of the Directorate General of Posts and Information Technology as regulated on the Communication and Information Ministerial Regulation No. 23/PER/M.KOMINFO/4/2009; (2) the preparation of the drafting of the ICT USO policy formulation; (3) reviewing the results paper of the ICT USO activity policy formulation framework in relation to synchronization. The output of this activity was the policy of the Directorate General of Posts and Information Technology in relation to the ICT USO activity. Once the policy formulation was completed, the next step would be to form the strategy restructuring team through policy synchronization, which would further formulate the planning for both the National Strategic and the National Action Plan for the ICT USO by considering regional needs and the needs of the ministries/institutions. For the restructuring of the strategy through the synchronization of the action plan of the activity, the next step would be to hold the central and regional coordination and consultation meeting about the planning for the ICT USO Stranas and RAN. After holding the coordination and consultation meeting, the next step would be to conduct an improvement toward the planning for the ICT USO National Strategic and the National Action Plan.

Once the improvement was completed, the next activity would be the implementation of the ICT USO RAN. In addition, the ICT USO activity monitoring/controlling should also be conducted in the regions. The last activity in the conceptual model was the restructuring of strategy through synchronization via coordination in the governance structure of the ICT USO activity between BPPPTI, the local administrations, and the service providers. This is in accordance with

the criteria for measuring the success on the aspect of effectiveness, which was the achievement of the restructuring of the strategy through synchronization via the coordination in the governance structure of the ICT USO activity between BPPPTI, the local administrations, and the service providers.

The next phase in the SSM would be comparing the models with perceived reality in order to establish synchronization. This stage was the phase of comparing the conceptual model that was designed in the previous stage with the real world or the problematical situation as the research object. The comparison in this stage, in reality, was more than just comparing, but also debating the situation of the real world in order to encourage various point of views that was previously hidden (Hardjosoekarto, 2012), to generate the debate about the perceptions, and the changes that were considered to be beneficial (Fitriati, 2012). The comparison of the conceptual model with the real world or problematical situation, in this research paper, was categorized into two groups, namely (1) the comparison of the conceptual model and the real world for research interest, and (2) the comparison of the conceptual model and the real world for problem-solving interest. The comparison for the problem-solving interest in the restructuring of the strategy through the synchronization of the ICT USO activity could be seen on the Table 5 below.

In the conceptual model, the role of the government was to guarantee the occurrence of healthy competition between the businesses through the introduction of the regulations that could guarantee the competition to take place. The even distribution of the development of the communication and information access, especially in the regions, as regulated on the Communication and Information Ministerial Regulation No 32/PER/M.KOMINFO/10/2008, which ensure the same rights for all of the society groups to enjoy the convenience of accessing and using information, as well as speeding up the improvement of the welfare of the people through the development of the telecommunications and information technology infrastructure in the villages (the ICT as the enabler of economic development). In this KPU/USO development, the role of the local administrations was very important to the success of the KPU/USO activity. The Government Regulation No. 38/2007 clearly regulated the division of the roles and the functions of the Central Government, Provincial and Local Administrations in the development of telecommunications. The role of the local administrations in the development of the KPU/USO policy was still limited to providing recommendations about the locations (villages) that should receive the policy. In the Communication and Information Ministerial Regulation No. 23/PER/M.KOMINFO/04/2009 about the Role of the Local Administrations in the KPU/USO Development, it was mentioned that (i) the Regency/City Administrations provide recommendations on the regions that should be prioritized for the development of KPU/USO; (ii) recommendations of priority areas.

A series of activities in the conceptual model of the restructuring of strategy through synchronization tried to answer the problem. The activity of drafting the


No The Activity of the Conceptual Model

The Existence? How? Who? Good/Bad Alternative?

time The drafting of the framework of the policy formulation by considering the following:• the aspiration of the telecommunications providers• the aspiration of the ministries/institutions• the results of the ICT USO and WPUT evaluation• the improvement of the ICT USO activity• the aspiration of the Local Administrations

- - Directorate General of Posts & Information of the Ministry of Communications and Information

- Establishing the framework of the policy formulation that consider the benefits of the ICT USO for the community, the local administrations, ministries/institutions

time The policy formulation of the Directorate General of the Posts and Information

Available Publishing the regulations on the ICT issues

Directorate General of Posts & Information of the Ministry of Communications and Information

Not yet optimal

The formulation of the policy of the Directorate General of Posts & Information about the synchronization of the ICT USO activity between the local administrations, the ministries/institutions, and telecommunications providers

time Forming the policy and activity synchronization team

- - Ministries - The establishment of the policy and activity synchronization team by the ministries

time The drafting of the National Strategic Plan (Stranas) & the National Action Plan (RAN) for the ICT USO by considering the needs of the regions and ministries/institutions

- - Ministries - The establishment the National Strategic Plan (Stranas) & the National Action Plan (RAN) for the ICT USO with the consideration to the needs of the regions and ministries/institutions

time The Coordination and Consultation Meeting for both Central and Regional Level on the ICT USO Stranas and RAN Planning

- - BPPPTI - • Holding the Coordination and Consultation Meeting for both Central and Regional Level on the ICT USO Stranas and RAN Planning • The National Coordinating Meeting and the Regional Coordinating Meeting for the ICT USO RAN

time The refinement of the ICT USO Stranas and RAN planning

- - BPPPTI - •The establishment of the ICT USO Stranas and RAN planning• The inclusion of the ICT USO RAN to the activity of the ministries that is related to the ICT USO

time The implementation of the ICT USO National Action Plan

- - Ministries - The implementation of the ICT USO National Action Plan

Table 5. The Comparison of the Restructuring of the Strategy through the Synchronization of the ICT USO Activity


time The monitoring/controlling the ICT USO activity in the regions

- - Directorate General of Posts & Information of the Ministry of Communications and Information

- • The implementation of the monitoring/controlling the ICT USO activity in the regions• The running of the controlling function of the Local Administrations in the ICT USO

time The establishment of the synchronization through the coordination in the governance structure of the ICT USO activity between BPPPTI, the Local Administrations, and the Service Providers

- - Ministries - The establishment of the synchronization of the ICT USO activity

Continue Tabel 5

framework of the policy formulation by considering the following: (1) the aspiration of the telecommunications providers, (2) the aspiration of the ministries/institutions, (3) the results of the ICT USO and WPUT evaluation, (4) the improvement of the ICT USO activity, and (5) the aspiration of the Local Administrations. Various considerations would be required to set up the construction of the framework in the formulation of the policy that was related to the restructuring of the strategy through the synchronization of the ICT USO activity. This activity was required because the construction of the policy on the meso-level showed that there were many Local Administrations that did not have work plans on the ICT USO.

“For the ICT, we have created the master plan on e-Government. As for the USO, we do not have any plan. This year, we are doing the standardization of the telematics [e-gov]. We are currently trying to synergize with the regencies/cities. Because of the regional autonomy, we do not have the authority to be involved directly. The furthest we can do is to create a document that later can be synergized with the regencies/cities. If they have their own programs, we do not have the authority to forbid them to do so. However, we try to coordinate with the regencies/cities through meetings.” (The West Java Agency of Communication and Information)“ … their locations are not in line with our expectations, with the expectations of the local administrations. So the weaknesses lie on the level of coordination between the winning bidder and the government. In the end, we received the information from the ministry. All of the assets are, indeed, belonged to the winning bidder….” (The West Sumatra Agency of Communication and Information)

The issue with the coordination and the restructuring of the strategy through synchronization became the problem that reduced the effectiveness of the ICT USO activity in the region. The activity could produce both the data and the information that are related to the restructuring of the strategy through the synchronization of the ICT USO activity, the mapping of the big issues in the restructuring of the strategy through the synchronization of the ICT USO activity, and the paper on the results of the ICT

USO activity policy formulation framework. This activity reflected that the companies would adapt their organizational practice and strategy to benefit from the institutional opportunities and suggested that the institutional environment could provide comparative institutional advantages for the companies in line with the opportunities and the resources in the environment (Carney, Gedajlovic and Yang, 2009).

The next activity would be the formulation of the policy of the Directorate General of Posts and Information (see the Ministrial Regulation of the Communications and Information No. 23/PER/M.KOMINFO/4/2009), which was to examine the paper of results of the ICT USO activity policy formulation framework related to synchronization. This activity was the reflection of the theory that adopted the relational view from the companies that stated that “the quality of the relations of the companies could establish both internally between employees and externally between various other actors” and therefore it could influence the ability of the companies to create and exploit the core competence (Hall and Soskice, 2001). The environment of the regulations limited the heterogeneity through the recommendations of the standard of resources, competence, and uniformed form of distribution method on all of the industries that were provided and through establishing what resources that were socially accepted (DiMaggio and Powell, 1983; Meyer and Rowan, 1977).

With the completion of the activity of policy formulation, the follow-up activity would include: (1) forming the team for the restructuring of strategy through the synchronization of policy and activity, (2) the activity of the formulation of the National Strategic Plan and the National Action Plan for the ICT USO, which was part of the Stranas and the RAN of the overall ICT, by considering the needs of the regions and ministries/institutions, (3) the Coordination and Consultation Meeting on the Central and Regional Level about the ICT USO Stranas and RAN plans, (4) the refinement of the ICT USO Stranas and RAN plans, and (5) the implementation of the ICT USO National Action Plan.

Several activities on the restructuring of strategy through synchronization would need the creativity


Figure 6. The Construction of the Restructuring of Strategy through the Synchronization of the ICT USO planning

in setting up the institutional arrangement between the central government, provincial and regency/city administrations. This is in line with the institutional theory that put more emphasis on both the creativity and agents (Carney, Gedajlovic, and Yang, 2009). The results of the study was in line with the institutional theory, which emphasized that companies would tend to adapt with the existing norms, traditional domination, and social influence in the internal and external environment. The institutional arrangement or government institutions that were defined as “an arrangement between the units of economy that regulated the ways where these units could cooperate and/or compete with each other” (Davis and North, 1971; North, 1990 and 1994).

The issue with the lack of synchronization between the central government and the local administrations in the implementation of the ICT USO was revealed on the results of a Focus Group Discussion below:

“For future planning, basically the poor relations should be improved by re-designing the regional cooperative relations, especially the coordinating system, and then linked to the regional development planning forums [Musrenbang] and the National Coordinating Meeting [Rakornas] on Communications and Information and the regional ideas can be guarded with the system …”“The importance of the documents and the coordination among the regions are required as part of the commitment as well as guaranteeing a synergistic performance between the central government and the regions (The East Java Agency

of Communications and Information)“The obscurity of the PLIK/MPLIK placements was because the absence of the coordination between the central governments and the local administrations…”“There is a need for coordination and synchronization, as well as socialization with all of the sectors, the community, and the public…”“The mapping of regional needs…” (The East Java Agency of Communication and Information)

The restructuring of the strategy through synchronization was constructed with the administrative level approach, various kinds of strategy, as well as additional alternatives of strategies and action plans that did not violate the regulations. When referring to the construction of the policy formulation of the ICT USO RAN, which was a part of the overall ICT RAN, then RAN was the translation or the derivative of the overall ICT Stranas. The ICT USO RAN itself would be the derivative of the ICT USO RAD. Should the construction is illustrated in graphics, the visualization can be seen on the Figure 6 below.

The Figure 6 showed that the activity of the ICT Stranas formulation should be coordinated with the formulation of ICT RAN in order to generate high-quality synchronization. Therefore, the ICT RAN was part of the ICT development plan. The formulation of Stranas was initiated from the Mid-Term Development Plan (RPJM) that was implemented and formulated by the Central Government. The National RPJM was used as reference to formulate the ICT Stranas nationwide as well as the National Strategic Plan (Renstra) that was


used by the Ministry of Communications and Information Technology as the reference for the implementation of the ICT development. The ICT Stranas that was used by the Ministry of Communications and Information Technology was used as the reference by the BPPPTI to be used in the ICT National Action Plan and the ICT USO National Action Plan that referred to the Sector-based Action Plan. The Sector-based Action Plan was formulated based on the RENSTRA of the ministries/institutions that was formulated by the Ministry of Communications and Information Technology. The Sector-based Action Plan that had been formulated was used as the guidelines on the Work Plan (RENJA) of the ministries/institutions in the ICT development and served as the work plan that was interpreted from the ICT USO RAN.

The Provincial RPJM was the Provincial Mid-Term Development Plan that was formulated based on the National RPJM by considering and adapting to the condition and the regional development target on each province. The ICT Regional Strategy (Strada) of the Province was formulated from the Provincial RPJM by each Communication and Information Agency, in addition to referring from ICT Stranas and ICT USO Stranas that had been formulated on the central government level. The implementation plan that was implemented and formulated was included in the Renstra SKPD for the following phase to be used as the Sector-based Plan as the decision-making process. According to the flow, the ICT Strada of the Province became synergistic with the implementation of the Regional Action Plan and, annually, could be included in the Provincial SKPD.

The Regency RPJM was a form of the restructuring of strategy through the synchronization of regional development plans based on Provincial RPJM and referred to the National RPJM. The formulation of the ICT Regional Strategy of the Regency referred to the Regency RPJM against the ICT Regional Strategy of the Province in order to harmonize the development of the ICT USO on the levels of regencies as well as provinces. The ICT USO Regional Strategy was explained on the Regional Action Plan of the Regency ICT USO by considering the factors and the expected output in the Provincial SKPD Sector-based Action Plan and the Provincial ICT Regional Action Plan. The SKPD Strategic Plan (Renstra) referred to the Regency RPJM that had been formulated and generated the product that was included on the SKPD Sector-based Action Plan in the Regency. The final output, which was the guidelines on the annual regional development took the form of the Regency/City SKPD Work Plan.

The findings of the context of the problems with the ICT USO in Indonesia were in line with the conceptual debates toward the IBV Strategy activity. The conceptual debate was aimed to test the suitability of the IBV concept with the existing problems on the Law No. 17/2007 and the factual problems with the ICT USO. Checkland and Poulter (2006) used three social elements that became the focus of analysis, namely: (1) the element of roles, (2) norms, and (3) values. In this study, the three social elements was closely related

to each other, dynamic in nature, and always changing with time, along with the changes in the real world as seen on three institutional levels (Nee, 2003).

Firstly, the roles of the macro level from: (1) the Ministry of Communications and Information Technology through the Presidential Regulation of the Republic of Indonesia No. 24/2010 on the Position, Task, and Function of State Ministries as well as the Organizational Structure, Task, and Function of the Echelon 1 of State Ministries, was tasked to administer for the running of the affairs on the field of communications and information technology in the government to assist the President in administering the country; (2) the Directorate General of Posts and Information Technology of the Ministry of Information and Telecommunication of the Republic of Indonesia, which was commissioned to formulate as well as to implement the policy and the technical standardization on the field of posts and information technology; (3) BP3TI – through the Ministerial Regulation of the Communication and Information Technology No. 18/Per/M.KOMINFO/11/2010 on the Organization and the Governance of the Agency of the Provider and the Manager of the Finances of the Telecommunications, of which the task was to implement the provision, the management, ICT finances, the accessibility, as well as the telecommunication and information technology service. The roles on the meso-level (Nee, 2003) included (1) the Provincial Administrations, in this case the Communication and Information Agency in the Provinces, which had the role in the implementation of the affairs of the Local Administrations on the field of communications and information technology based on the autonomy, deconcentration, and the task of assistance, which was adjusted to the Governor’s Decree (see the Ministerial Regulation on the Communication and Information on the Guidelines of the Implementation of the Government Affairs on the Subdivision of Posts and Telecommunication; (2) the Regency/City Administrations, which had the role in the affairs of the local administrations in the field of communication, information technology, and public relations based on the principle of autonomy and assistance in accordance with the requirements from the Regent/Mayor; (3) Service Provider (Operator) as the Protector, or transforming the citizens in the remote areas who benefit from the telecommunication service to develop.

The roles on the micro-level (Nee, 2003) included (1) the intermediary organizations, of which in several scientific literature the importance of these intermediary organizations in the process to introduce the ICT to the local community (Madon, 2000; Heeks and Kenny, 2002; Mc Connell, 2000). Heeks and Kenny (2002) argued that the agents were important in assisting the villagers to overcome the obstacles of the political access in providing ICT service (Heeks and Kenny, 2002). The ICT Intermediary Organization was defined as the people or the organizations that provided effective support for the local community in the utilization of the adaptation to the technology from outside of the non-government public organizations,


Figure 7. The Debating of the Mixture of IBS and NIESSources: Wilopo, 2013


the local administrations, or international donors; (2) the User Community had a significant role in the ICT USO program, which was as the catalyst of the social development, education, and regional economy.

Secondly, values. The macro-level had the values to reduce the gap in the telecommunication and information. The meso-level had the values of the optimization of the development and the utilization of the infrastructure of the posts and telematics, as well as the non-telecommunication infrastructure in the implementation of telematics; the appliance of the concept of neutral technology that was responsive to the needs of the market and the industry while maintained the existing the wholeness of the system; the enhancement of the synergy and the integration of the network infrastructure toward the next generation network. The micro-level had the values of (a) overcoming the limited ability to pay of the community toward the infrastructure of posts and telematics; (b) overcoming the low level of the capability of the community to utilize and develop the information and communication technology; and (c) overcoming the limited capability of the society to manage the information into economic opportunities.

Thirdly, norms. The macro-level was the subject to the regulations on the development of telecommunication and information. The meso-level was the subject to the regulations on the development of telecommunication and information, and the agreements that did not deviate from the regulations, but could enhance the synergy between the actors in the ICT USO activity. The micro-level was the subject to the norms in the public, which was included in the informal agreements that had been agreed together. This includes the agreement to support and facilitate each other in the development of the ICT program.

In relation to the findings of the theory, the NIES model was the adaption of the synthesis of Williamson (2000, 2007), which was the new-institutional economic (NIE), where modification was conducted by Nee (1998) in order to complete the two limitations of the model. The first modification was placing all of the obstacles both formal and informal on one level of analysis. The second modification, according to Nee and Briton (1998), Williamson (2000, 2007) assumed that the atomic nature of the actors was influenced by formal authority. Williamson (2000, 2007) put the embeddedness approach as the part of institutional environment, but the model could not socialize the social mechanism through the norms that had implications on the individual performance. Mechanism was not as simple as the formal structure of the government, but very much depended on the informal norms and this was embedded on the journey of social relations.

In the macro perspective, Scott (2004) examined the structure of the environment that was broader with bigger influence toward the form of organization and process. For the approach that was more related to the emphasis on the micro level—the basics of institutional theory (Scott, 2004) stated the work regulation that was not regulated by the nature laws of economy, but was formed by the cultural, social, and political process (Scott, 2004).

The key in understanding a relation was revealed on the levels of social interaction that was face to face. An institution is a norm of web of interrelated network that regulate social relation. This was conducted by structuring the social interaction where the institution generates group performance (Brinton and Nee, 1998).

The reflection of the theory from the model of synchronization on Figure 7 showed the form of restructuring. The restructuring that was referred as collaboration, partnering, or realignment, including the integration between the two, which involved changes in the controlling of the corporation of an organization, and alliance, which involved the partnership in one region or more.

In this research paper, the term restructuring referred to the synchronization of the strategy between the governmental levels on the ICT USO activity. This was in line with the thoughts of Radman (2009), which stated restructuring could be included in the strategic planning and, in turn, strengthened the overall sector. The synchronization model was the process of underlining the interests of the stakeholders, which was one of the principles of the implementation of good governance (Mattingly et al, 2009). In this position, there was a space for coordination between stakeholders such as providing space for the local administrations and the ministries/institutions to develop the ICT USO strategy. In the end, the institution through the collective action would lobby for the changes of the formal regulations to be more in line with the interests of the organization (Nee, 2003).

The NIES approach in the utilization of IBV must also examine how far the NIES theory had fully answered the institutional problems of the ICT USO in Indonesia, which would lead to proliferation of the new institutionalism research in all kinds of social science currently, including strategic management (Peng, Sun, Pinkham, and Chen, 2009). Therefore, the ICT USO strategy would be the activity that was included in the single policy framework either on the level of the central government or the local administrations. This is in line with the thoughts of Benjamin (2000), and Heeks (2005) that this alternative framework did not consider the direct and linear relation between the enhancement of the ICT access and the enhancement of the socio-economy development, but instead to develop the chains of impact that attempted to uncover various indirect effects of ICT toward the public good.

The associations and professional lobbyists or intermediary institutions could act as the agents who represent individual interests on the micro-level. The efforts of the organization to gain the legitimation as the driver that could encourage the conformity with the institutional regulations and practice through forces, normative, and mechanism. This was conducted because ICT could create significant impacts toward the development of the socio-economy and the social life, which would depend on how far this technology own the ability for the context of socio-economy, politics, and culture in the location where the ICT would be located (Heeks and Kenny, 2002).


In this constellation, the BPPPTI as the BLU must depen on the ‘hybrid mode’ of the governance and on the combination of hierarchy, market, and long-term network of the cooperative relation to manage complex problems as a result of innovation, the market that was fragmented, and the chains of transaction. By Nee (2003), the hierarchy and the ‘hybrid mode’ was considered as complementary devide, either because it would allow the management on various kinds of transaction—as develped by Oxley and Silverman (2002) on the alliances among the companies and innovation managements; or because the hybrid-governance that would allow the dependence that complementary to each other between the governance mode in managing a specific kind of transaction (Nee, 2003).

CONCLUSION This research paper uncovered that the restructuring

of strategy through the synchronization of the ICT USO service activity was an institutional matter of which the solution would need an institutional approach. The results of this research paper showed that: (1) the governance structure in the ICT USO activity did not run well; (2) the absence of the synchronization of the ICT USO activity between the central government and the local administrations; (3) the absence of the harmonization of the relations between BP3TI with the local administrations; (4) the lack of the involvement of the local administrations including the social institution of the community as the intermediary organization. The position of the IBV strategy had answered the ICT USO problems, which, as it turned out, existed in the macro-level, meso-level, and micro-level. The leveling of the problems of the ICT USO activity had led the IBV strategy to the meso-position, which was attached to the position of the BPPPTI. In reality, the problem that was faced by BPPPTI as the BLU that ought to deliver the ICT USO to the micro-level. On the micro-level, the ICT USO activity should be able to empower the people in the utilization of the ICT. In order to optimize the dynamics of the reciprocity on the meso-level and the micro-level, the role of the policy on the macro-level would be required, as stipulated on the Law No.17/2007.

In order to answer the ICT USO problem, the concept of IBV strategy should be perfected with the NIES theory (Nee, 2003) that possessed more integrative approach from the economic, sociological, and conceptual aspects that could exist on all levels—macro, meso, and micro, just like the ICT USO problems in Indonesia. The NIES theory became the more suitable approach in modifying IBV in order to match the context of this study. The results of the IBV construction (Peng, 2009) with the inclusion of the NIES theory (Nee, 2003) as the approach in the institution had answered the strategic restructuring (SRS) on various levels of analysis—micro, meso, and macro (Wilson III, 2004). This study provided a new perspective in establishing governance structure (Peng, 2009) and (Nee, 2003)

This study with the SSM-based AR recommended several steps, which consisted of the final stage of the seven-stage process of soft systems methodology. The results of the study recommended an alternative model in solving the problems. Several activities that were suggested in the conceptual model had been implemented in the follow-up process by the BPPPTI. These activities were (1) The road map of the preparation of the ICT USO National Strategy; (2) The preparation of the ICT USO National Action Plan; (3) The facilitation of the preparation of the Regional Strategy and Regional Action Plan for ICT USO. In addition, it was necessary to have control mechanism for the dynamics of relations between the government level from macro-level, meso-level, and micro-level in relation to the formulation, the implementation, and the control of the ICT USO activity in order to provide optimized benefits for the society.

ACKNOWLEDGEMENT This article is part of the whole research, entitled

“Pembaruan Kelembagaan dan Tata Kelola Rangka Perbaikan Pelayanan Cyber Security. (Sebuah Riset Tindakan Berbasis SSM dengan Social Network Analysis)” led by Prof. Dr. Martani Huseini dan Prof.Dr.Sudarsono Hardjosoekarto. We would like to express our gratitude to the Postgraduate of Administration Sciences Studies, Faculty of Social and Political Sciences, Universitas Indonesia.

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