Strategic management in digital transformation: prioritizing strategic initiatives through Analytic Hierarchy Process (AHP) in Indonesia’s services sector

Purpose: The rapid pace of digital transformation has significantly impacted the IT services sector, particularly in emerging markets, such as Indonesia. This thesis explores the strategic challenges faced by Indonesian IT service providers as they navigate a competitive landscape characterized by evolving customer demands, technological advancements, and market dynamics. This research aims to prioritize strategic initiatives that align with market needs and enhance the competitive positioning of these providers. Research Methodology: By integrating strategic management frameworks such as Porter’s Five Forces, Value Chain Analysis, and SWOT Analysis with the Analytic Hierarchy Process (AHP), this study addresses the issue of stagnant revenue in PT ABC, a leading IT service provider in Indonesia. The findings indicate that AI-based product innovation and the development of low-code solutions are critical strategies for driving sustainable growth and meeting the increasing demand for advanced technological solutions. Limitations: This study underscores the importance of customer-centric approaches and continuous adaptation to maintain a competitive edge in a volatile, uncertain, complex, and ambiguous (VUCA) environment. Contributions: This research contributes to the strategic management literature by demonstrating the practical application of AHP in the context of digital transformation within the IT services sector, and provides actionable insights for IT service providers in emerging markets facing similar challenges.