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Indonesian Financial Services Authority:
Keep it “SIMPEL” –
merger and strategy
management based on
Balanced Scorecard
and QPR Metrics
The Indonesian Financial Services Authority has been using its QPR Metrics powered
SIMPEL named strategy management system almost its entire existence. With SIMPEL
the Authority justifies its existence and performance to all stakeholders and looks for
new opportunities to guarantee an even better performance in the future.
The Indonesian Financial Services Authority was founded in
2013 by a merger of selected functions from the Indonesian
Central Bank and the Ministry of Finance. The merger of financial
supervision was executed based on the Balanced Scorecard
(BSC) methodology.
The main function of the Indonesian Financial Services Authority
(OJK) is to promote and organize a system of regulations and
supervisions that is integrated into the overall activities in the
financial services sector. The Authority performs its regulatory
and supervisory duties over financial services activities in banking,
capital markets, and non-bank financial industries sectors.
OJK’s vision is to become a trustworthy monitoring institution
that oversees the financial services industry in order to protect
the interests of consumers and the public. It also aims to bring
the financial services, an industry which is a pillar of the national
economy with global competitiveness as well as a capability to
promote public prosperity.
OJK has several missions. It aims to realize the convening of
all activities in the financial sector so that they are managed
regularly. Its mission includes to fairly, transparently and
accountably realize a sustainable and stable financial system
and to protect the interests of consumers and public.
Sustainable strategy management
system as target
The merging units had used the established strategic
management systems of their original organizations. Bank of
Indonesia’s system was based on QPR Metrics, and built by QPR’s
Strategic Value-Added-Reseller in Indonesia, GML Performance
Consulting. GML also facilitated the development OJK’s
Strategy Map and Balanced Scorecard as well as implementing
QPR Metrics.
The new organization tried to integrate the two existing strategy
management systems into one. However, they wanted to have
a system better than the existing ones - one adding value to the
users. The employees also wanted to have the benefits as soon
as possible. It was understood that OJK cannot improve its real
performance, if it cannot ensure that the new implementation is
sustainable.
Before implementing the QPR Metrics powered strategy
management system, data was collected manually. Also all
reporting was done manually. This was considered as very
painful, while there were more than 2000 employees, more than
60 unit and 35 OJK regional offices, compared to the present
situation where the data collection and data performance
reports are done electronically.
One downside of the manual data collection and reporting
was, that OJK was not capable of monitor process governance
or performance management and started therefore to look for
a system ensuring smooth processes and keeping everything
under governance. It was understood that the system must be
software powered.
Just a five minute Balanced Scorecard presentation with QPR
Metrics to both organizations’ CEOs was enough to convince
them that QPR Metrics based system is OJK’s tool of choice.
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The Indonesian Financial Services Authority (OJK) is established in a bid to ensure that the
overall activities within the financial services sector are implemented in an organized, fair,
transparent and accountable manner, they are able to realize the financial system that grows
in a sustainable and stable manner and are capable of protecting the interests of consumers
and the society.
OJK employs around 2000 professionals and is currently in process of adding 500 more. OJK
was founded in 2013 by a merger of selected functions from the Indonesian Central Bank and
the Ministry of Finance. Its head office is located in Jakarta, in the Capital of Indonesia. OJK
has used its QPR Metrics powered SIMPEL named Strategy Management System almost its
entire history.
KPIs based on the expectations of
the external stakeholders
The new Indonesian Financial Services Authority strategy
management system is known as SIMPEL, a local Bahasa
language abbreviation for the performance management
system, meaning “very easy” or simple – and not surprisingly
pronounced like the word simple in English. Adaption of SIMPEL
was supported by governance and management example: if
there was strategy related request from the OJK Chief Executive
Officer, it was communication via the system.
Mr. Dwi Kurniawan (on left), Director of Information System
Strategy and Development from the Department of Information
System Management, and Mr. Arifin Susanto, Deputy Director
from the Strategic Planning Directorate at Indonesia Financial
Services Authority when visiting the QPR Software Head office.
“Out of the 200 KPIs, 50 were on red. With QPR Metrics our
strategy office could explain the reasons by using the analysis
view and dashboards, not to mention that the system was already
then integrated into the budgeting system - and could easily be
linked to more systems in the future”, explains Dwi Kurniawan,
the Director of Information System Strategy and Development at
OJK’s Department of Information System Management.
The decision to select QPR Metrics was supported by its fast
implementation. And as the Bank of Indonesia was already
using the software it was easy to benchmark that the QPR based
system was clearly more comprehensive than the one used in the
Ministry of Finance. Further, good price-quality ratio, the support of
QPR’s local partner PT GML Performance Consulting, easiness of
use and visually good looking dashboards contributed positively.
“We had to create a system ensuring that our tasks and strategy
are always implemented in order to meet our goals. We try to
cascade our mission and vision into medium term targets, into
something what we are going to achieve in the next five years. For
example our aim to be a respectable financial system authority
in Indonesia is achieved by integrating our supervision, issuing
harmonized regulation, developing of our financial system, as
well as educating protecting Indonesian consumers “, says Mr.
Arifin Susanto, the Deputy Director from OJK’s Strategic Planning
Directorate.
Each strategic objective has its own Key Performance Index
(KPI) or IKU as called in the Bahasa Indonesia language.
OJK has 21 KPIs, based on the expectations of its external
stakeholders. These are turned to strategic formulations. The
OJK Board of Commissioners approves them, after which they
are communicated to the Indonesian Parliament. For example
the financial stability is measured by using financial index on
capital market and by capital integration. The stakeholders’
satisfaction on how the Indonesian financial system is regulated
and supervised is measured with a survey sent to more than one
thousand respondents annually.
OJK management receives their KPIs in the annual strategy
meeting. Actions are assigned in this event. When the
management goes back to their branch offices, they communicate
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The Indonesian Financial Services Authority’s strategy map shows the strategic objectives and their Key Performance Indexes (KPI) or
IKUs as called in the Bahasa Indonesia language.
the actions to their own subordinates. The OJK supervisors
sign an individual contract or agreement with KPIs with their
subordinates. Individual performance metrics and bonuses
are linked to the KPIs. Annual OJK bonus is based on OJK
performance.
is not just the copy of the two old systems. Third, for our people
coming with culture of different systems, we have already one
common system working”, lists Dwi Kurniawan.
OJK next Balanced Scorecard journey is to link unit and individual
performance into QPR metrics. “We have to measure everybody
fairly, we cannot give them the same performance means, a good
Finding new opportunities with
and bad performer paid same – this is unfair approach. We tried
to create performance based culture inside OJK so that everyone
the forecast
will be paid based on their performance and contribution”, says
Currently OJK strategy management system has almost 200 Arifin Susanto.
users in various units. Every Director and so called KPI manager
can periodically monitor their own performance. KPIs managers Currently QPR Metrics has been integrated to OJK’s budgeting
update the measures once a month. KPIs are reviewed quarterly. system. In the next phase the aim is to integrate it to Human
OJK’s next improvement step is to link the unit measurement Resources and Risk Management systems.
system to individual performance systems.
Integrated supervision and education/consumer protection are the
“We have got three benefits for the initial implementation of very reasons for OJK to exist. Those are the value-added why OJK
QPR Metrics. First, when doing the annual parliamentary report, is needed. To show the people that OJK is credible in supervising
we can show that we have a good justified measurement using financial industries and protecting the consumer, it needs the
Balanced Scorecard methodology. Second, we can communicate Balanced Scorecard and QPR Metrics tool to explain to Indonesian
to all financial industries that our new organization has an people that OJK is well performed.
integrated performance system which is better than before – it
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“Our
Content advice to any other organization thinking to implement a
performance management system is to buy QPR. There are cheaper
and more expensive alternatives, but for an organization like us, QPR is
the right the choice, as it is very cost-efficient and fast to implement.”
- Dwi Kurniawan, Director of Information System Strategy and Development, Department of Information System Management -
“I would say that for a government office like us it is almost impossible
to be without using this kind of application and software. Otherwise you
cannot combine information and collaborate especially in a country
like Indonesia, scattered into many islands.”
- Arifin Susanto, Deputy Director, Strategic Planning Directorate -
By using QPR, OJK now can justify its performance to all
stakeholders, not least to the Indonesian Government and
Parliament. With the QPR management system and SIMPEL
the Indonesian Financial Services Authority can easily provide
evidence that it is fulfilling its tasks.
For example, in 2014 OJK has revieved more 21.000 consumer’s
complaints out of which more than two-third have been resolved.
In addition OJK has harmonized cross-industry regulation by
issuing more than 31 common financial best practices. Using QPR
Metrics will also improve budget consumption: the allocated
budgets are used as purposed, and not left unused due to lack
of visibility.
Three things to make the strategy
management system success
“Ensure also that the need for fast implementation is supproted
by the CEO. So, Management commitment is a must. We were
lucky that, the OJK Chairman is on the champion for Balanced
Scorecard in Indonesia”, Arifin Susanto continues.
QPR Software Plc
QPR Software provides insight to business operations for
successful strategy execution and operations improvement.
QPR offers a comprehensive software suite and consulting
services for modeling, analyzing, designing and measuring
operations, supporting agile business transformation. We are a
global thought leader in business driven enterprise architecture
and in process intelligence. QPR Software Plc was founded in
1991 and has its headquarters in Helsinki, Finland. As a publicly
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Helsinki Ltd.
www.qpr.com | community.qpr.com
Dwi Kurniawan and Arifin Susanto both state that many PT GML Performance Consulting
organizations have failed in implementing Balanced Scorecard
based management system as they have not been committed to QPR’s Strategic Value-Added-Reseller in Indonesia, GML
Performance Consulting, is a management consulting firm
it and did not build it on the technical solution.
specializing in helping organizations improve their performance
“If you want to succeed, implement an integrated performance through better translation of their strategy. With highly
system. This is the most important tool to ensure that everything experienced consultants implementing more than 300 Balanced
is well measured, justified and governed. There is also need for Scorecard s in various industries in Singapore, Malaysia and
6 - 10 named people responsible to make it happen, the so called Indonesia, we could help your organization understand more
Strategy Management Office, the SMO. They are responsible for about Balanced Scorecard . Depending on the size, complexity
the planning, executing and monitoring the strategy. It is very and readiness of your organization, we could tailor-design the
effective unit to make sure that strategy management is running Balanced Scorecard implementation through in-house workshop,
full consulting and automation.
well”, says Dwi Kurniawan.
www.gmlperformance.com | [email protected]
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