Interview (JBA): Standardization and DX in the automobile auction industry.

An Introduction to JBA Indonesia

JBA Indonesia is a company that has been developing a wide range of automobile and motorcycle auction businesses in Indonesia since its establishment in 2011. In 2019, it was bought by and merged with Adi Sarana Armada, and under the brand name “JBA Bidwin Auction (JBA)”, now currently has 17 branches all over Indonesia, being able to provide a larger service through the increasing number of branches and auction sites which have opened.

It is the largest of its kind in Indonesia. Furthermore, in 2019, the company had announced a business alliance with “Carsome” and is actively expanding into the Internet business through utilizing IT technology.

Kazuhiro Shioyama, CEO,  has currently been leading JBA from 2011 onwards.

 

 

Yoshi:

Thank you for your time today.

LOGIQUE Digital Indonesia has been supporting the development and maintenance of your system, website, and various applications for a long time. We would like to thank you very much for the opportunity to take charge of such projects. Our technical team has grown throughout this time while supporting your company.

There have been some projects that have been difficult to successfully fulfill, with the mission-critical levels of such projects being high in order to respond to the increasing number of auction cars,motorcycles and participants year by year. So, there have been challenging situations, but these make up valuable experiences for us. We appreciate that we have been able to work closely with JBA.

Well, JBA Indonesia is in the No. 1 position in the area of ​​”automobile / motorcycle auction” within Indonesia. What are your thoughts on the importance of IT for JBA?

 

Mr. Shioyama:

We believe that maximizing the use of IT has been a necessary endeavor for more effectively delivering our services to our customers; this was one of the most important factors which enabled the growth of our company.

In 2011, the Indonesian auction industry had underestimated the levels of service and service quality required in that area, which should have been taken more seriously. Regarding these problems, I thought that through appropriately utilizing IT, such issues could be significantly improved. It was with regards to this that I worked with your company to take the necessary IT measures required. As a result, we have been providing better services to our customers ever since, and believe that our customers have also evaluated us similarly.

For example, in the beginning, we started with  some features which have since become fundamental aspects within the auction industry in Indonesia, like the ability to “check the exhibited vehicles in detail on the website in advance” and “change the procedure at the venue where customers had to line up for a long time due to inefficient manual processing”. This is what I started with.

Through the accumulation of small efforts and various ingenuities, we have eliminated the information gap which has existed between our customers and also the hurdles which had existed for participating in an auction, thereby making the process much more convenient for our customers.

Through our efforts, customers have experienced the difference in convenience compared to other companies, and as a result, I think choosing JBA has become a natural choice. Other companies have followed suit for several years with utilizing systems such as “You can check the exhibited vehicles on the Web,” but I am glad that it has raised the service level of the industry as a whole.

Of course, in addition to IT, we have made an effort to improve customer convenience as a whole, but many of them have been in relation to IT, and “IT (DX)” remains an important factor… Yes, you could say that.

 

 

Y:

Being a top player in IT, I think competitors are keeping track of your company’s movements. I think that effective services will always be imitated. However, do you think it is possible to continue promoting a company’s own unique qualities through utilizing IT?

 

S:

I think JBA is still ahead of any competition it might have. Even in the situation that was mentioned, we are constantly making improvements to our services at a rate that is much faster than the levels reached by the average company.

Of course, looking at the details, there is still potential for us to improve, so we aren’t thinking of slowing down anytime soon.

We are always working on improving our services for our buyers, but we also want to enhance the level of convenience for our sellers, as well. Even now, we have continued to release new improvements for existing services, such as the “BASTK system”, “Inspection & Appraisal app” which improves pricing accuracy (through calculating the value of a vehicle by inspecting  any incurred damages), as well as the “Dashboard function” which allows you to grasp the auction status in real time. We will continue to facilitate our customers’ convenience by paying attention to crucial details which other companies so often miss.

During this era, no matter what you do, IT will remain an indispensable fact of life. In order to release a new service, its corresponding system and digital marketing strategy will have to be adjusted, with the development of new services such as AI and Fintech being necessary so as to fit with IT trends. We will continue to engage in “IT / DX” and further improve JBA’s services.

Therefore, certain aspects of hardware may be imitated by other companies, but soft aspects such as particular services are difficult to mimic. On the surface, no matter how much these features are imitated, if the core concept of the original feature isn’t fully grasped, the results will be different altogether.

 

 

Y:

Utilizing that level of speed, I can imagine that project management is difficult if multiple projects are being carried out parallel to one another. What kind of management is being done from the initial project budgeting to planning and execution?

 

S:

For JBA, the system development and digital investment plan for introducing new services is similar to the product development plan for manufacturers. To think in terms of a system’s development budget is to think in terms of the limits of the overall IT budget allowed. However, if you think of it as a “budget for a new product’s development,” it takes on a completely different view. It can be done: If you have faith in the quality of the product, even if it hasn’t been planned thoroughly just yet, we can invest in its production and commercialize it, and regarding this, try to think flexibly and speedily according to the market environment.

I think that kind of flexibility and speed is a necessity, especially in Indonesia. I make the final decisions myself, but always make a habit of carefully considering any suggestions from my employees. The idea should be based on improving efficiency and should address issues that can be universally perceived in the workplace; the opinions of our buyers and sellers should serve as hints. Therefore, I tell my employees to be proactive with their suggestions. Only then will I be privy to a variety of interesting ideas from various perspectives. I prioritize these valuable opinions in light of past experiences and the current market environment.

In-house project managers are also growing, but what we are paying particular attention to is whether the core concept, that is, “what are you developing the service for?”. Of course, project managers often hear the voices of the field, so they definitely want to improve the convenience of the users in the field. However, if that deviates from the original purpose of improving customer convenience, it will be overwhelming. I always tell the project manager that such a viewpoint is necessary, and it is also a point that I manage carefully.

The position of the project manager and the strength of the employees determine the priority of the project, which is a type of logic far from customer-oriented. I think this kind of thing must be avoided.

 

Y:

In addition to the input from employees, do you have an opportunity to come up with ideas for new services and new functions?

 

S:

Well, I am constantly watching trends in the automobile auction industry within other countries.

Japan is a special case, but there are still some references, and there are many interesting initiatives in Thailand, India, China, etc., so I am always collecting such information.

Of course, American trends are also helpful.

Whatever I look up or come across will always be stored mentally within a stockpile of ideas, even if I don’t immediately incorporate it into the service. I think that some of the ideas that I put in that way will be connected at the right time to form a single form, which will lead to the provision of new services to customers.

 

Y:

If the vehicle inspection & appraisal system developed and operated for JBA and the BASTK (vehicle delivery management) system is eventually standardized and used not only by your company but also by partners and competitors, it will inevitably benefit all players. I heard that you think this is the case. Could you tell us a little more about your thoughts regarding this matter?

 

S:

JBA presents vehicle inspection and vehicle grade results so that our customers are properly aware of the conditions of a particular vehicle. In addition to JBA, 5 to 6 other companies have similar evaluation techniques. However, each company assesses according to its own standards, and there is no common index. If this assessment method could be standardized, it would benefit buyers greatly.

By standardizing the inspection method, the evaluation and assessment will be uniform, and if the evaluation can be standardized, the calculation of the vehicle’s value can serve to be more transparent than ever. As a result, it creates a high level of value not only for our buyers but also for our sellers. In this way, we believe that what is universally valuable to all stakeholders is the involvement of all companies in creating an industry standard.

I think the standard model, flow and system that JBA has already developed and operated can be a good basis for a universal standard, but we would not want to force other players to use ours. Other ideas should always be open for optimization. The purpose is to standardize for the convenience of our customers.

By the way, JBA’s inspection system has many items of inspection and is made for the purpose of a more accurate method of inspection and evaluation. Since the basic idea should be familiar to all companies, it is possible for dealers and trade-in companies to participate in this initiative through customization, such as reducing the number of inspection items and shortening the inspection time.

At the same time, I would like to use “BASTK” alongside the same concept used in many auction companies and finance companies. When a finance company accepts a vehicle from an end user, it checks the condition of the vehicle and exchanges paper underwriting certificates. Until the auction company accepts it, there are multiple delivery points in play, such as the shipping company, but all the points are ultimately managed on paper.

Even if a specific part is lost or the condition of the part is altered on route, you will not be able to notice these problems until it is inspected at the auction company (JBA).

To solve this problem, JBA has digitized “BASTK”. This therefore makes it possible to visualize and trace the vehicle condition through each stage. Therefore, I would like as many finance companies as possible to utilize this system in the future in order to increase the number of delivery points, so that the flow and contents can be more visualized.

A service that enhances the value of the industry and the players within that industry as a whole, benefiting customers through the visualization of critical information regarding the inventory status (aging, etc.) and providing that information to sellers: indeed, we would like to further promote the provision of such a service.

 

Y:

Thank you very much. If you are working in an auction company,  a finance company, a dealer, etc. and are intrigued by this idea (setting an auction industry standard), please feel free to contact JBA.
 

Postscript

This time, President Director Shioyama gave us various valuable stories in addition to this one. I think that the experiences and ideas cultivated by Mr. Shioyama are extremely valuable to all the companies and related parties involved within the Indonesian automobile & motorcycle secondary market. We hope that the industry as a whole will take the necessary steps to develop a standard model.

LOGIQUE will continue to support JBA, which continues to grow dynamically, in terms of its IT and digital infrastructure.

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