Customs Services Face Growing Operational Challenges
Indonesia’s customs and excise administration operates in an increasingly complex international trade environment. Changes in global supply chains, economic uncertainty, trade policies, and cross-border e-commerce have created new demands for institutions responsible for regulating imported goods and collecting state revenue.
KPPBC Type Madya Pabean C Kantor Pos Pasar Baru occupies a specialized position within the Directorate General of Customs and Excise. Its responsibilities focus on international postal consignments, including goods entering Indonesia through cross-border postal channels.
The article reports a substantial decline in the number of consignment documents handled by the office. The volume fell from 875,470 documents in 2023 to 459,156 in 2024 and 424,802 in 2025. Meanwhile, the office’s revenue target increased from Rp45 billion in 2023 to Rp50.8 billion in 2024.
This situation illustrates the operational pressure facing public institutions: employees must manage changing workloads, maintain service quality, and meet organizational targets while adapting to evolving regulations and technology.
Digital transformation offers one way to address these challenges. However, introducing technology alone does not guarantee better performance. Employees must understand new systems, use information effectively, and adapt their working practices. Leaders therefore have an important role in helping employees navigate organizational change.
How Leadership Supports Digital Transformation
Transformational leadership is a management approach that encourages employees to work toward shared goals, think critically, and improve their capabilities. Rather than relying exclusively on instructions and performance targets, transformational leaders provide direction, motivate their teams, encourage innovation, and recognize individual contributions.
The approach includes four central elements: serving as a trusted role model, communicating an inspiring vision, encouraging new ideas, and providing individual support to employees.
These behaviors can be particularly relevant in public institutions, where established procedures, regulatory requirements, and hierarchical structures may influence how quickly employees adopt new technologies.
Permadi and Jumhur examined whether transformational leadership affects employee performance directly and whether digital transformation helps explain that relationship. Their research connects leadership practices with the practical use of digital technology in a specialized Indonesian customs office.
Digital transformation in this context means more than replacing paper documents with electronic files. It includes improving data management, information security, technology infrastructure, employee digital capabilities, risk management, and the integration of digital systems into everyday operations.
The study also connects these practices with Indonesia’s Electronic-Based Government System, known as Sistem Pemerintahan Berbasis Elektronik (SPBE). This framework provides a policy foundation for improving the efficiency and accountability of public administration through information technology.
Survey of 97 Employees Reveals Three Important Relationships
The researchers used a quantitative survey to collect information from employees at KPPBC Type Madya Pabean C Kantor Pos Pasar Baru. Questionnaires were distributed online between August 26 and September 4, 2026.
The office had 109 active employees. Researchers received 101 questionnaires, excluded four responses that did not meet the minimum one-year service requirement, and analyzed the remaining 97 valid responses.
The survey measured three main areas: transformational leadership, digital transformation, and employee performance. Employee performance was assessed through work quantity, quality, timeliness, and cost efficiency.
The researchers analyzed the responses using SmartPLS software to examine the relationships among these factors, including whether digital transformation served as an intermediary between leadership and performance.
The results revealed three positive and statistically significant direct relationships.
First, transformational leadership positively influenced employee performance. The relationship had a coefficient of 0.351, with a p-value of 0.001. This indicates that stronger transformational leadership was associated with better employee performance in the surveyed office.
Second, transformational leadership had a strong positive relationship with digital transformation. The coefficient was 0.701, with a p-value below 0.001. Among the three direct relationships examined, this was the strongest. The finding highlights the importance of leadership in supporting technology adoption and organizational adaptation.
Third, digital transformation positively influenced employee performance. The coefficient was 0.451, with a p-value below 0.001. Its relationship with performance was stronger than the direct relationship between transformational leadership and performance.
Together, leadership and digital transformation accounted for 54.9% of the variation in employee performance within the study’s statistical model. Transformational leadership alone accounted for 49.1% of the variation in digital transformation. These results also indicate that other factors contribute to performance and technology adoption.
The researchers further found that the average assessment scores for transformational leadership, digital transformation, and employee performance were 82.44%, 82.47%, and 82.14%, respectively. All three were categorized as high in the study.
Digital Transformation Partly Explains Leadership’s Influence
One of the study’s most important findings concerns the role of digital transformation as a mediator.
The analysis found a positive indirect relationship between transformational leadership and employee performance through digital transformation, with a coefficient of 0.316 and a p-value below 0.001. Because the direct relationship between leadership and performance remained positive and significant, the results indicate partial mediation.
In practical terms, leadership can influence performance through two complementary pathways.
The first is direct: leaders motivate employees, clarify expectations, recognize achievements, and encourage them to complete their responsibilities effectively.
The second is indirect: leaders support the adoption and effective use of digital systems, helping employees access information, manage data, and carry out their tasks more efficiently.
The combined direct and indirect effect of transformational leadership on employee performance was 0.667 in the model. This suggests that leadership’s contribution extends beyond employee motivation and includes its role in building a supportive digital working environment.
The findings do not mean that technology automatically improves every aspect of performance. Instead, they suggest that the benefits of digital systems depend partly on how effectively an organization supports their implementation and use.
Practical Priorities for Public Institutions
The results offer several practical lessons for public-sector managers, particularly those responsible for customs services and other institutions undergoing digital transformation.
1. Integrate leadership development with digitalization programs.
Leadership training and technology initiatives should be planned together. Managers need to communicate the purpose of digital changes, encourage employees to explore better ways of working, and provide support when staff encounter difficulties using new systems.
2. Strengthen knowledge management.
Among the digital transformation indicators, knowledge management received the lowest assessment, at 81.44%. Institutions can respond by improving documentation, sharing operational knowledge, maintaining accessible guidance, and helping employees learn from colleagues’ experience.
3. Encourage critical thinking and two-way communication.
The leadership indicator associated with stimulating new thinking recorded the lowest score within the leadership category, at 81.03%. Leaders can strengthen this area by inviting suggestions, discussing operational problems openly, and involving employees in improving work processes.
4. Improve quality control alongside efficiency.
Task accuracy and time efficiency received the highest performance indicator scores, at 82.89% each. However, quality-control implementation recorded the lowest score, at 80.82%. This suggests that improvements in speed and accuracy should be accompanied by consistent quality checks and attention to applicable work and budget guidelines.
5. Evaluate factors beyond leadership and technology.
The statistical model did not explain all differences in employee performance. Work motivation, compensation, organizational culture, digital literacy, and technology infrastructure are among the factors that future research could examine.
These recommendations are relevant beyond customs administration. Other public institutions seeking to modernize their services may also benefit from combining leadership development, employee learning, and reliable digital infrastructure.
What the Findings Mean for Indonesia’s Digital Government Agenda
Indonesia’s digital government transformation requires more than the procurement of software, computers, or electronic service platforms. Institutions also need employees who can adapt to new systems and leaders who can guide organizational change.
The research by Andika Wahyu Permadi and Helni Mutiarsih Jumhur provides evidence from a specialized customs office that leadership and digital transformation are connected to employee performance. Its findings support an integrated management approach in which leaders develop employee capabilities while ensuring that digital systems contribute to everyday operational needs.
However, the findings should be interpreted within the study’s scope. The survey covered one office and captured employee perceptions at a single point in time. The results establish statistically significant relationships within the model but do not independently prove that leadership or digital transformation caused performance improvements. Further studies involving multiple customs offices and longer observation periods could help determine whether the relationships remain consistent across different institutional settings.
For public-sector organizations, the central lesson is clear: digital transformation is not only a technology project. It is also a leadership and organizational development challenge. Institutions are more likely to realize the potential of digital systems when leaders actively support employees, encourage learning, and connect technological change with measurable improvements in public service.
Author Profiles
Andika Wahyu Permadi is a researcher affiliated with Telkom University, Indonesia. His work in this article focuses on transformational leadership, digital transformation, and employee performance in public-sector customs administration.
Helni Mutiarsih Jumhur is an academic affiliated with Telkom University, Indonesia. She co-authored the study examining the relationship between leadership practices, digital transformation, and employee performance.
Research Source
Journal article title: “The Effect of Transformational Leadership on Employee Performance Mediated by Digital Transformation at KPPBC Type Madya Pabean C Kantor Pos Pasar Baru”
Authors: Andika Wahyu Permadi and Helni Mutiarsih Jumhur
Affiliation: Telkom University, Indonesia
Journal: International Journal of Management and Business Intelligence (IJBMI)
Publication details: Volume 4, Number 5, 2026, pages 1383–1398
DOI: https://doi.org/10.59890/ijmbi.v4i5.74
Official journal website: https://journalijmbi.my.id/index.php/ijmbi
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