Balanced Scorecard (BSC) For Public Transport Performance .
Faculty of Economic Sciences, Communication and ITBalanced Scorecard (BSC) For Public TransportPerformance Measurement Based onService Dominant Logic (S-D logic) Framework(Case study: Jakarta public transport authority and Värmlandstraffik AB)Submitted by :Dodi Tresna YudiatnaSupervisor:Bo EnquistSamuel Petros SebhatuService Science ProgramKarlstad UniversitySpring 2010
ACKNOWLEDGEMENTThis thesis is written to fulfil the requirement for the Master Degree Programme inTransport System and Engineering (MSTT) in Civil Engineering and EnvironmentDepartment, Faculty of Engineering of Gadjah Mada University and Master of ServiceScience Program in Karlstad University. The researcher would like to express the greatgratitude to those who contributed in this thesis, as mentioned in the following:1.My God for all the blessing, simplicity, grace and mercy2.My parents, my wife, my son and my sisters for giving me strength, support andspirit to finish my study3.Ministry of Transport for giving me the opportunity and support to study at GadjahMada University and Karlstad University4.Prof. Dr. Ir. Siti Malkhamah, M.Sc as the Director of Master Programme inTransport System and Engineering, Gadjah Mada University, and as the thesiscounsellor for all the guidance, support and assistance in completing my thesis5.Associate Professor Lars Haglund, Associate Professor Bo Enquist, Samuel PetrosSebhatu, Phd, as the lecture and advisor at Karlstad University for all the guidance,support and assistance during the researcher studied in Karlstad University.6.Prof. Dr. Ir. Ing Ahmad Munawar, M.Sc and Prof. Dr. Ir. Sigit Priyanto, M.Sc asthe thesis examiner. For the comment and correction to my final thesis7.Lectures, staff and colleagues in Master Programme of Transport System andEngineering, Gadjah Mada University and Service Science Programme at KarlstadUniversityResearcher realizes that this thesis still needs to be improved. Therefore anysuggestion for the improvement is highly appreciate as an input to refine for the furtherresearch.Yogyakarta,November 2010Dodi Tresna Yudiatnai
LIST OF CONTENTACKNOWLEDGEMENT . iLIST OF CONTENT . iiLIST OF TABLE . ivLIST OF FIGURES . vLIST OF APPENDICES . viiABSTRACT . viiiCHAPTER I. INTRODUCTION . 1A. Background . 1B. Aim and Research Question. 4C. Purpose of Research . 4D. Research Limitation . 5E. Thesis Structure .6CHAPTER II. THEORETICAL FRAMEWORK . 7A. Performance Measurement . 7B. Balanced Scorecard (BSC) . 81. Strategy Map. 132. Balance Scorecard for Public Sector .16C. Public Transport .18D. Service Quality .21E. Service Dominant Logic (S-D Logic) .25CHAPTER III. RESEARCH METHODOLOGY. 32A. Research Design .321.Qualitative Research Approach. 332.Case Studies Research . 35B. Data Collection . 37C. Reliability and Validity .39ii
CHAPTER IV. DATA COLLECTION . 41A. Jakarta Transportation Strategy . 41B. Jakarta Public Transport Performance.551. Fiduciary Perspective.552. Customer (Resident) Perspective.643. Internal Process Perspective .734. Learning and Growth Perspective.87C. Value Creation with Public Transport User .92D. Varmland (Sweden) Public Transport .94CHAPTER V RESULT AND DISCUSSION . 101A. Strategy Map. 1011. Fiduciary Perspective . 1072. Customer (Resident) Perspective.1083. Internal Process Perspective .1094. Learning and growth Perspective .110B. Balanced Score Card as The Service Dominant Logic.113C. Evaluation of Jakarta Public Transport .116D. Comparison Public Transport System .123E. S-D Logic and BSC in Jakarta Public Transport.127CHAPTER V. CONCLUSION AND SUGGESTION . 132A. Conclusion . 132B. Suggestion . 137REFERENCES . 141APPENDICES .146iii
LIST OF TABLETable 1Levels of planning and control in public transport . 19Table 2The items of service quality. 23Table 3Ten foundational premises. 27Table 4Jakarta MRT feature . 50Table 5Number of Transjakarta Passenger . 59Table 6Transjakarta Revenue Based on Number of Passenger . 60Table 7Public Transport and Price Policy Perfomance . 64Table 8Performance of Dishub, Transjakarta and Non-Transjakarta . 65Table 9The most attribute should be improved . 66Table 10The service quality of Transjakarta . 68Table 11Passenger Expectation from Transjakarta Service. 70Table 12Traffic Accident. 71Table 13Data Fluctuation in Headway Busway. 79Table 14Mass media issues in Transjakarta Busway. 80Table 15Number of Transjakarta Acident Cases . 85Table 16Customer Involved in Value Creation . 93Table 17Vision, Mission and Objective of Dishub Jakarta . 101Table 18Jakarta and Värmland public Transport. 127iv
LIST OF FIGUREFigure 1Balance Scorecard with four perspectives . 10Figure 2Principles of a strategy- focused organization . 13Figure 3Strategy Maps. 18Figure 4Transport Relationship Model . 20Figure 5Factors Decision of Travel . 20Figure 6Gap Analysis Model . 22Figure 7Synthesized model of service quality. 24Figure 8Research Flowchart.33Figure 9Case Study Method . 37Figure 10 Structure Organization of Dishub . 43Figure 11 Picture of monorail. 47Figure 12 Support pillars for the stalled monorail project. 48Figure 13 Jakarta MRT Map route . 48Figure 14 The Planning of Jakarta MRT station . 49Figure 15 Strategy of Jakarta Macro Transportation Pattern. 54Figure 16 Transjakarta Bus and Busway . 57Figure 17 Transjakarta Route Map . 58Figure 18 Structure of Transjakarta . 59Figure 19 Jakarta Congestion . 62Figure 20 The service quality of Non-Transjakarta. 67Figure 21 Jakarta Pollution. 71Figure 22 Non-Transjakarta bus vehicles . 74Figure 23 Other vehicle using Transjakarta Busway line. 78Figure 24 JakCard (Transjakarta Card) . 81Figure 25 Halte Cam. 82Figure 26 Non-Transjakarta Bus accidents. 84Figure 27 Transjakarta Safety Problems. 85Figure 28 Transjakarta Incident. 86v
Figure 29 Pollutan from Non-Transjakarta Bus . 87Figure 30 Operator’s employe of Non-Transjakarta . 88Figure 31 Transjakarta’ Employee Strike.91Figure 32 Värmland Location in Sweden Map. 95Figure 33 Värmland Organization . 95Figure 34 Värmland Traffik Route .97Figure 35 Värmlandtrafik Public Transport .98Figure 36 Strategy Map . 105Figure 37 Public Transport user Value proposition. 109Figure 38 Learning and Growth . 113Figure 39 Duties and job functions of Dishub Jakarta . 118Figure 40 Public Transport Relationship Model . 118Figure 41 Jakarta Public Transport System Framework Model . 130vi
LIST OF APPENDICESAppendix 1 Questionnaire . 146Appendix 2 Demographic Characteristics of Respondent . 150Appendix 3 Determining Sample Size . 151Appendix 4 Keputusan Gubernur No. 84 Tahun 2004 . 156Appendix 5 Keputusan Gubernur No. 103 Tahun 2007. 161vii
ABSTRACTOne of the main problems in Jakarta transportation is that people are more interestedin using private vehicles rather than public transport causing the traffic jam in the high levelsituation. The growth of the private vehicles especially motorcycles grows rapidly eachyear and give negative impact not only for the traffic jam itself but also to other effectssuch as pollution, safety, and quality of life for the residents. There is lack of service logicin the policy of public transport in Jakarta and lack of thinking to give excellence service tothe customers. The focus in this research is to analyze the performance of public transportin Jakarta by using the Balanced Scorecard (BSC) method and answering how BalanceScorecard (BSC) and Service Dominant logic (S-D logic) can improve the performance ofpublic transport in Jakarta, as well as to know the difference between Jakarta publictransports compared to Värmlands public transport.This thesis used a case study research with triangulation of qualitative andquantitative method for the data research. A case study research methodology relies onthe multiple sources of evidence to add the breadth and depth to the data collection inorder to assist in bringing a richness of data, and to contribute to the validity of theresearch. This thesis used four sources of data; they were documentation and archivalrecord as the secondary data, and direct observations and interviews as the primary data.In the documentation, the data were collected from the official website of the relatedinstitution, and news from the trusted sources, etc. In archival record, the data collectionsconsisted of the institution records, survey data, as well as maps and chart, etc. In thedirect observation, the researcher observed directly as the user of the public transport. Inthe interview, the researcher interviewed the representatives of the related institution, theywere Dishub DKI Jakarta and Värmlandstraffik AB and conducted questionnaire surveyto 403 respondent of the Jakarta resident.The results from the analysis was that the performance of Jakarta public transportbased on four perspectives (Fiduciary, Resident, Internal Process and Learning andgrowth) still had poor performance. The indication can be seen from the lagging indicator(outcome), Fiduciary and Resident Perspective. Jakarta transportation had high level oftraffic jam (congestion), traffic accident and pollution. The Jakarta residents prefer to useprivate vehicle than public transport because most of people (Jakarta resident) said thatthey were unsatisfied (95.29% of respondent) and assessed poor value for theperformance of the public transport. From scale 1 to 10, the performance of Transjakartawas 6.21, all Large Size Bus Operator was 4.67, all Middle Size Bus Operator was 3.79and All Small Size Bus operator was 4.31. The poor quality in public transportperformance made the public transport user also rated poor for the performance of DishubJakarta in general which was only 4.94. There were many ways to solve the problem inJakarta transportation. However, the most important thing was to put service S-D logicrather than G-D logic as the fundamental thinking to solve the problem, and used BSC asthe performance measurement in comprehensive and balanced ways. BSC was not just asthe performance measurement but also as the tool and key for the success of theinstitution (Dishub) to achieve their objective and vision and mission. Evaluation of theperformance was not the ending of the process, but it was the beginning of the process tocreate a better value.Keyword: Performance measurement, Balanced Scorecard (BSC), Fiduciary, Resident,Internal Process and Learning and growth perspective, Service DominantLogic (S-D logic), Service Qualityviii
CHAPTER IINTRODUCTIONA. BackgroundJakarta transportation nowadays has many problems. One of the problems isthere are more private cars than public transports on the road; this means thatpeople prefer using cars to public transport. This situation puts Jakarta in the highlevel of congestion. As the capital city and centre of business, Jakarta has an areaof 662 km2. On the other hand, the length of roads in Jakarta is only 6.28%.Jakarta is connected with the surrounding cities such as Bogor, Depok, Tangerangand Bekasi (Jabotabek). Many residents from those cities work in Jakarta. Basedon the Jakarta demographic and civil record service, Jakarta Population is8.523.127 people. Meanwhile the population of Jabotabek, based on the Indonesia2000 census by the Indonesian government, was officially counted to 23.3 millionpeople. The mobility of residents in Jakarta is very high, every day; there areapproximately more than 17 million trips with private vehicles and publictransports in Jakarta. They are not only from the Jakarta areas but also from the ccities surrounding Jakarta whose inhabitants worked in Jakarta. The number ofpublic transport is only about 2% of the total vehicles in Jakarta, which is reached7,7 million. This situation makes congestion on the road worse because morepeople use private cars than public transports.There are many researches that study the reason why people prefer usingprivate cars than public transports. One of the reasons is that they are not satisfiedwith the quality service of the public transport. The problem is that the operators1
have poor management in running the business for organization and giving poorquality service to the customers. There is lack of thinking to give excellenceservice to the customer. They don’t have enough responsibility and give excellentservice guarantee to the customers, but nowadays people in Jakarta become morecritical to public transport service. The service becomes an important issue forpassengers. They want to have a better public transportation service; otherwisethey will still use private vehicles rather than public transport to do their dailyactivity. If this happens, Jakarta transportation in the future will stuck and gettingworse. Based on JICA (Japan International Corporation Agency) research, if thereis no significant changing in developing the road construction in Jakarta, it willface total traffic congestion (permanent gridlock) in 2014, unless the governmentshould takes serious steps to improve public transportation. The road constructionin Jakarta, which grows at a rate of around 0.01 percent a year, is unable to keepup with the number of vehicles in the capital. The vehicles grow at an average of11 percent per year. Each day, over 9 million cars and motorcycles fulfil Jakarta'sroad.Government should make progressive improvement on this situation. Thereare many ways to solve this problem. The most important step is to put servicelogic in the policy, which means using Service Dominant Logic (S-D logic) thanGood Dominant Logic (G-D logic) as the fundamental thinking to solve theproblem. One of thinking to solve the problem is by using the performancemeasurement of Service Dominant Logic (S-D logic) as the basic to measure andevaluate public transport. This measurement can be conducted in BalancedScorecard (BSC). The Performance measurement is very important to help in2
assessing the adequacy and performance of the current service. The basic questionis, How do we know if the service is good and the reform is needed? The resultfrom the measurement can be used by some stakeholders who need those data.The data measures and evaluates performance related to the public transport thatcan be used by some stakeholders. The performance measurement also providesdirection on how to use limited resources effectively and efficiently in the designand operation of services that reflect the government policies and communityneeds. Policy which issued by the government should have the basic thinking ofthe Service Dominant logic (S-D logic).The logic of the public transport stakeholder (especially for the policymakers) should be changed from G-D logic to S-D logic. G-D logic is a view tomake something (transporting somebody from a starting point to a destination andproviding transportation capacities only) to a process of S-D logic, which meansassisting public transport user to create their own value creation process (Enquistet al, 2009). Public transport stakeholders (especially for the policy makers)should also change the logic or mindset from the thinking of the value assomething produced and sold to the thinking of value as something that is cocreated with the customers and other value creation partners (Enquist et al, 2009).The policy of public transport should have logic to integrate public transportmodes, services, and ticketing system; travelling information that becomesresources for the public transport users’ to create their own value creation process.With this logic, value creation in public transport also changes from the singletransportation operator only to a collaborative process of co-creation with thepublic transport user (Enquist et al, 2009).3
B. Aim and Research QuestionsThe aim of this research is to understand and describe the new approach KeyPerformance Indicator, the Balanced Scorecard to be applied as the measurementfor public transport, and the Service Dominant Logic (S-D logic) as thefundamental thinking to improve the service quality and to solve the problem inJakarta public transport. Therefore, the following research questions are designed:a.How is the performance of public transport in Jakarta measured by using theBalanced Scorecard (BSC) method?b.How is the Balance Scorecard (BSC) and Service Dominant logic (S-D logic)can improve the performance of public transport service quality in Jakarta?c.How is the difference between Jakarta public transports compared withVärmlands public transports?C. The Purpose of The ResearchThe overall aim of the thesis is, first, to evaluate and analyze Jakarta publictransport’s performances by using Balanced Scorecard (BSC) based on fourperspectives: Fiduciary, Customer (Resident), Internal Process and Learning andGrowth perspective to make improvements service quality in the future; Second,to understand and analyze the cause and effect linkage perspective in BalancedScorecard Strategy Map, in order to achieve the objective as well as vision andmission; Third, to understand and analyze the Service Dominant Logic (S-Dlogic) in public transport as fundamental thinking to improve the service qualityand to solve the problem in Jakarta public transport; Finally, to compare the4
Jakarta public transport with Värmlands public transport. In this research, weshould clarify the purpose is the Balanced Scorecard as a management system,and relation of cause of effect strategy and it is not as the specific scorecardmeasurement.D. Research LimitationThere are many public transports and operators in Jakarta. This thesis onlyfocuses on the public transport of Transjakarta Bus Rapid Transit (BRT) andConventional Bus/Non Transjakarta (Non-BRT). For the Non-BRT one, thecategorization of the bus was conducted by dividing the size of the bus into large,medium and small. The case study was held in Jakarta Indonesia and Värmlandspublic transport in Sweden. In Sweden, the study was taken in VärmlandstrafficAB from the previous studies, literature review, interview with the relatedauthority, and field observation. The comparison between Jakarta and Värmlandspublic transport only viewed as the public transport system. The focus of theresearch problem viewed from the side of the Jakarta public transport authority(PTA). Meanwhile, there were some problems like accessing literature, collectingdata and research database as well as problems in language as the information anddata source from VTAB was in Swedish language. In relation to the researcherlimitation, there might be different interpretation.5
E. Thesis StructureChapter 1, consists of the problems background from the research, researchquestion, aim and purpose, research methodology and data collection.Chapter 2 is the theoretical framework which consists of literature review andthe background theory as the research base analysis. These theoretical referenceshave connection each other and trustworthiness to the research.Chapter 3 is the research methodology which consist of the method whichwas used in the research, research design, data collection, reliability and ValidityChapter 4 is the data collection and result. This chapter described thecondition of public transport in Jakarta using the Balanced Scorecard in fourperspectives; they are Fiduciary, Citizen, Internal Process and Learning andGrowth. There is also an explanation about the strategy of Dinas Perhubungan(Dishub) Jakarta and the condition of Värmland public transportChapter 5 is the discussion, which consist of the Strategy Map of DinasPerhubungan Jakarta, the connection between Balanced Scorecard and ServiceDominant Logic (S-D logic), the evaluation of the Jakarta public transport and thecomparison of the Jakarta public transport and Värmlands public transport.Chapter 6 is the conclusion answers of research question and suggestion forthe problem solving. Furthermore this chapter also give recommendation for thefuture research.6
CHAPTER IITHEORETICAL FRAMEWORKA. Performance Measurement“Measurements are the key ” If you can’t measure it, you can’t control it If you can’t control it, you can’t manage it If you can’t manage it, you can’t improve it!!– (Peter Drucker)Institution is a complex human community which is composed by manypeople inside with a complex system, cultures, values, behaviours and goals. Thechallenge for leader in every institution is to manage them strategically,synergistically and with appropriate alignment and synchronicity to attain thedesired results. But the key to establish for its success is begin by using the use ofperformance measurement.In recent years, performance measurement has become an important issue fororganizations/institutions. Many institutions spend a lot of money to get a goodresult in measurement. A good performance measurement and clear definition canhelp managers to go in the right direction and focus on what really matters toachieve the goals. According to Moullin (2004, p.181), performance measurementis defined as evaluating the organization performance, how well institution aremanaged and how the value of the institution can be delivered to customers andother stakeholders. This definition gives a clear guidance and encouragesinstitutions to deliver their institution values to their customers and it also coversthe main aspects of how performance is managed. Meanwhile the World Bank7
Institute defined performance measurement as the continuous process ofinstitutions in ascertaining how well, or how poor, a government program is beingprovided.All institutions, whether public or private institutions, are interested indeveloping an effective performance measurement and performance managementsystems to achieve their goals, since it is the only way for them to achieve a highperformance. However, the problem with the measurement is that the performancemeasurement is like a loaded gun. It will be dangerous if it is misused, and at leastit is threatening if it is pointed to the wrong direction (O'Leary, 1995: p.354).B. Balanced Scorecard (BSC)The Balanced Scorecard is one of the performance measurements and it isalso as a performance management system to achieve organization/institutiongoals. The Balanced Scorecard was first introduced in the early 1990s by RobertKaplan and David Norton of the Harvard Business School. The concept hasbecome popular and well known and then widely adopted by institution across theworld. Before Balanced Scorecard developed by Kaplan and Norton, mostcompanies measure their performance measurement that focuses on financialperformance only. Meanwhile, the financial performance itself only has influenceto the short term measurement; it is also insufficient because it is not focuses onother perspective of performance such as customer, internal business process andlearning, and growth perspective. On the other hand, the attention in theseperspectives actually can influence financial perspective, such as investing and8
managing the intangibles assets the same ass in learning and growth perspectivecan provide foundation for future financial success itself.Kaplan and Norton (1992, 1996) attempted to do this with the BalancedScorecard. The Balance Scorecard is a comprehensive and holistic performancemeasurement. It measures not only financial perspective, but also measurescustomer, internal pr
in Jakarta by using the Balanced Scorecard (BSC) method and answering how Balance Scorecard (BSC) and Service Dominant logic (S-D logic) can improve the performance of public transport in Jakarta, as well as to know the d
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