CUSTOMER EXPERIENCE AND ORGANIZATIONAL AGILITY DRIVEN BUSINESS MODEL INNOVATION TO SHAPE SUSTAINABLE DEVELOPMENT

: This research aims to observe the digital transformation model of the relationship between transformational performance (TP) that linked towards sustainability to innovate and build business models. The current business model innovation generally fails to sufﬁciently embrace the sustainability dimension, especially in relation with organization agility and customer experience orientation. This paper assesses the relationship TP with business model innovation (BMI), organizational agility (OA), operational efficiency (OE), and customer experience orientation (CEO) in the Indonesian ICT Industry toward sustainability development. The study used purposive sampling using sample of 195 out of a population of 542. The collected data was then analyzed using Smart PLS. Findings of the study shows that OA has directly influence to TP while CEO and OA, has an indirect significant influence on TP through BMI, but OE has no direct and indirect influence on TP. Findings of the study has implications on strengthening the transformation model based on OA and CEO toward sustainability development, while OE is found as critical part in developing BMI.


Introduction
Digital transformation has become a topic of discussion among firms to make it a top priority, especially in addressing sustainability challenges to bring great opportunity for supporting product and service delivery. Firms work intensively to reinvent their business models and integrate with digital technologies to stay competitive and profitable in a dynamic market environment. Customer experience, organizational agility and operational efficiency are the primary drivers that helps boost the digital transformation of organizations (Henriette et al., 2016;Rajiani et al., 2018, Kohli andJohnson, 2011). Digital transformation requires an updated management capability, not only through the modernization of its process, but also the measurement of performance during the transformation also known as transformational performance (Wei and Xuexun, 2010). This is to ensure the success of organizations to take on initiatives for long-term objectives and mitigate the risk that would impact a business in terms of its operations, customers, and dynamic environment on sustainability. Past studies have shown that in order to perform BMI, firm capabilities should consist of three critical parts: a strategic sensitivity of firms to focus on customer experience, leadership unity to allow the firm to capture fast decisions to drive operational efficiency, and resource fluidity including sustainability dimension to drive adaptation and agile capabilities in adapting to the change (Doz and Kosonen, 2010). Many current firms claim to heavily focus on customer experience by allocating massive investments on digital technologies (Parise et al., 2016;Weill and Woerner, 2015). However, incumbent firms are facing a hard time to deliver customer experience through digital technology and their sustainability (Loucks et al., 2015;Grabara, 2019). This problem is mostly due to the constraint of maintaining an agile organization and operations to lead to BMI including the sustainability dimension (Berman, 2012;Leonhardt et al., 2017). The ICT industry is important, given its predominance in generating values of economic growth and strengthening the competitive advantage of a country (Pradhan et al., 2018). This study focuses on the development of BMI based on CEO, OA and OE in ICT industry to support sustainability development. This research would also contribute to literature on digital transformation models that is related to CEO, OE, OA, and BMI.

Literature Review
TP is the measurement of performance that is done to ensure the transformation phase drives changes towards the new paradigm. It is constructed by integrating the concept of digital maturity (Valdez-de-leon, 2016) and performance management (Latham, 2013) and consists of the balancing of the existing and potential performance based on innovation and development of ecosystem performance to support the digital transformation (Wei and Xuexun, 2010). The concept of TP was constructed from the concept of sustainable business strategic matrix (Voglander et al., 2014) where in ICT industry currently the issue related with the ecosystem and environment especially in green technology become a critical part. Eco-cost is related with the operating efficiency in developing sustainability development, while value/cost is representing the result of company in managing ecosystem and innovation. Figure 1 illustrates the sustainable business matrix of the firm in managing company. To support the sustainable business strategy, the organization agility and operating efficiency become critical parts to accelerate business process and growth to fully leverage opportunities (Doz and Kosonen, 2010). Organizational agility itself is constructed by the operational capabilities to adapt to change as fast as the market or customer requirements. This is also to provide flexibility to adjust its internal structures and processes in response to the changes (Trinh-Phuong et al., 2010).  (Vogtländer et al., 2014) OA consists of leadership or people agility, process agility in adapting to change, and culture agility (Nold and Michel, 2013). The ability to streamline business processes and change the people and culture of organization brings a new appeal to companies in the digital era to speed up decision making processes and balance the risks in a dynamic environment (Teece et al., 2016). Information systems have a significant influence in shifting manual processes to be automated and step up a company's processes internally to also boost the firm's performance (Chakravarty et al., 2013;Lu and Ramamyrthy, 2011). Therefore, the first hypothesis is formulated as the following:

Hypothesis 1: OA has a significant impact on TP
The existing IT architecture may hinder organisations from being agile; hence an alternative would be an orchestration of a range of integrated platforms. The integrated model enables for an effective coordination of capabilities in terms of synergizing, localizing, and optimizing resources (Tan et al., 2019). Synergistic operational capabilities through integrated platforms allow for the firm's capabilities to maximize the deliverables and to improve efficiency. Efficiency and agility are two components of the whole paradox, however past studies show that improvements in cost efficiency can be a consequence of superior quality as it would become a part of the firm's culture to provide excellent services and sustainability development (Carvalho et al., 2017). The impact of IT in the digitization process besides providing operational efficiency is also supporting intermediate sensing on opportunities that are reflected by enhancing customer experience. CEO is constructed as the firm's ability to focus on the customer in all processes as a part of the customer journey (Samudro, 2019). CEO includes a number of dimensions that involve the customer journey, starting from customer relation, price product offerings, brand performance including its post-sales, and loyalty to build trust personalization (Fatma, 2014;Priyanka Shrivastava, 2016). Deficiencies in COE and difficulties in modifying the process to adapt with the customer requirements could even lead to frustration, further delays, financial loss, and inefficiency. Therefore, new BMI should be built based on CEO, OA, and OE including the sustainability concern Doz and Kosonen, 2010). Therefore, the hypothesis is formulated as the following: Hypothesis 2: OE, OA and CEO has significant impact on BMI Firms that focus on customer experience could leverage its overall performance (Fatma, 2014;Mihardjo et al., 2019) and BMI is strongly correlated to firm performance especially at a transformational stage (Aspara et al., 2011;Schaltegger et al., 2016). In this paper, the different elements of BMI are derived from a past study that also took content innovation, structural innovation, and governance innovation into consideration (Zott and Amit, 2017) leading to the formulation of the last two hypotheses:

Hypothesis 4: BMI has a significant impact on TP
The research model for the current study is demonstrated in Figure 2.

Population and Sample
There are 542 ICT firms that are currently operating in Indonesia according to the Ministry of Information and Communication (2017), out of which the ones in this study consists of network and service providers. An appropriate sample size is needed for this population in order to generalize the findings of the study. The minimum rule of thumb for sample selection is a sample size of 35 (Cohen, 1992 was obtained out of the 195 firms. Smart PLS was used to analyze and process the collected data.

Sampling Technique
Purposive sampling was used to allow respondents to have equal chances to be selected for data collection (Hair et al., 2014), with the firms as the units of analyses. A seven-point Likert scale ranging from 1 ('Not at all satisfied') to 7 (very satisfied') was used to examine the response for each construct.

Result
The result of measurement model is used to ensure the latent variables and dimensions have consistency, reliability, and validity. Indicators and dimensions generally have loadings of Cronbach's Alpha (CA) and composite reliability (CR) above 0.7. The average variance extracted (AVE) is used to evaluate convergent validity exceeding the 0.5 level. Results are shown in Table 1.  Table 1 showed that all latent variables and dimensions have CA and CR above 0.7 and AVE above 0.5, it means all latent variables and dimensions were valid and reliable to be observed. The discriminant validity is demonstrated in Table 2 below, in which according to Fornell and Cha (1994); the values should be higher than 0.6. H3: H3 investigates the relationship between CEO and TP, with results indicating the t-value as 0.837 and p>0.005; therefore, H3 is rejected. It means that there is no direct significant correlation between CEO to TP H4: H4 investigates the relationship between 'BMI and TP', with results indicating the t-value as 2.985 and p>0.005; therefore, H4 is accepted. The Table 3 demonstrates the direct relationships within the study. The direct was investigation of direct relationship test; the next steps were assessing the mediation relation according to fit a research model to assess the indirect effect. The all indirect effect is shown in Table 4.   Figure 3.

Discussion
In previously publisher related with BMI, the firms that focus on customer experience, operational efficiency, and sustainability dimension has ability to change (Doz and Kosonen, 2010). Thus, the improvements in cost efficiency can drive the firm's culture in sustainability development (Carvalho et al., 2017). This Vol. finding does not only reveal the previously study but also provide novelty on that the focus the firm on the digital transformation. The firms shall not focus on operational efficiency but on customer experience orientation and organizational agility. Giving the finding that OE does not have indirect influence on TP.
Findings of study have implications as shown in Figure 4 that consists of 3 circles: The first circle based on finding on indirect hypothesis test consists of two latent variables which is organizational agility, and customer experience orientation. The Organizational agility as a term itself has been widely exploited by businesses to be a part of a framework of organisation consisting people and cultural perspectives especially in collaboration and process as well as people mindset to support development of sustainability policy. Customer experience orientation is the building of technological platforms capable of expanding to any size and scale in offering maximum product/service through customer relations, product price, personalisation, and branding as mention in first circle, while customer relation is found as the most significant to support brand performance.

Figure 4: Sustainable Development based on Organization Agility and Customer Experience
The second circle is operational efficiency where it has significant influence on BMI, but it has no indirect significant to drive TP. OE has rapidly become a lot more critical today to enabler OA and CEO to provide effective offerings and process to customers beside to support BMI. The sustainable BMI can bring the development, and the transformation of the one business model to another business model aligned with the need of customer supported by organization agility. The third circle is BMI in adopting a sustainable performance to support content, structural, and governance innovation to ensure the all innovation including in sustainability development could be accommodated The model of sustainability has implication of the firm to focus on CEO and OA, while operational efficiency could not be sustained for longer term support transformational performance.

Conclusions
The sustainable development model can be sustained developed through CEO and OA, while the operational efficiency could impact for short term. The study helps the ICT sector to focus on effective resource allocations supported by IT to perform cost efficiency and to provide fast and flexible decision making on organizational agility and customer experience orientation. The study contributes towards the initiation of a valuable model of transformation by prioritizing programs on OA, OE, and CEO which has more significant contributions in the development of BMI. COE has an indirect relationship through BMI. The study has limitation in term of variable of sustainability, time of research and statistical methods, hence the further study can be enhanced by providing holistic variable of sustainability, enhance time study by longitudinal study, and enhance statistical and research sampling to perform the result across industry.