Digital transformation – the panacea for Indonesian railway

Muhammad Muttaqin

Journal of Public Budgeting, Accounting & Financial Management, 2025, vol. 38, issue 1, 197-215

Abstract: PurposePublic sector accountability inherently lies with the public. This study aims to explore the role of digitalisation during public sector transformation, focusing on its impact in fostering customer orientation and enhancing accountability to the public.Design/methodology/approachThis study employed qualitative approach to examine the organisational transformation of the Indonesian railway company, PT Kereta Api Indonesia (Persero) (Kereta Api Indonesia), for the period of 2009–2014. Semi-structured in-depth interviews were conducted with employees, governance expert and railway passengers. Document review on annual report and publicly available digital database was also incorporated. The analysis revealed distinct critical junctures during KAI's institutional transformation period. The narrative was developed through an iterative process of reflecting on primary and secondary sources, integrating data into the theoretical framework.FindingsThe findings reveal that digitalisation has been integral to KAI's transformation, beginning with internal efforts to enhance employee productivity and streamline work processes, thereby enabling more efficient governance. It extended to customer-focused innovations, where digital technologies improved service delivery and fostered accountability culture. Its integration also established a cohesive framework of multi-layered accountability, connecting employees, governance systems and customers in a transparent and efficient ecosystem.Practical implicationsWithout opting for privatisation, KAI managed to undergo a tremendous transformation with digitalisation playing a pivotal role during the process.Originality/valuePrevious literature on public sector transformation mainly focuses on privatisation with a cause for risk handover or efficiency overlooking the customer cause. This paper aims to address the gap by analysing the unique case of the Indonesian railway, which successfully transformed with a customer-oriented working process without opting for privatisation.

Keywords: Public sector transformation; Digitalisation; Accountability; Customer orientation; Critical juncture (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpbafm:jpbafm-12-2024-0268

DOI: 10.1108/JPBAFM-12-2024-0268

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