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In investigating the use of performance information in planning, this study examined two of ALPHA’s strategic planning periods, 2009-2014 and 2014-2019. Interviews were also conducted with Manager B (2015), Manager C (2015), Manager D (2015), and the consultants (2015).

4.2.1 BETA’s profile

BETA is an LGA unit held accountable to the Mayor through the local government secretary. The Office was established in 2013 through City A regulation 7/2013. The Office is a fusion of several divisions of the Culture and Tourism Office and one division of the Office for Industry and Trade. Before the BETA was established, the LGA performed the function of promoting tourism and the creative economy. The change in organisational structure was part of the reform adopted by the Indonesian Government following the President instruction 6 2009 on developing the creative economy. This instruction provides a basis for coordinating into one ministry the creative economy industry, which was formerly managed by 28 ministries/agencies (MoTCE, 2014).

BETA is mandated to assist the Mayor in designing and evaluating policies regarding tourism and the creative economy; in promoting local culture tourism; in increasing the capacity of human resources in tourism; and in strengthening community engagement (MoTCE, 2014). The Office is led by a Chairman with a Secretary, an Office for Technical Operating Unit, and four divisions – Art and Culture-Based Creative Economy, Tourism Entrepreneurship Promotion, Promotion and Marketing, and Human Resources and Community Empowerment (see Figure 4-3). The Art and Culture-based Creative Economy Division is responsible for developing the film, performing arts, music, and visual arts industry. The Tourism Businesses Promotion Division is responsible for developing tourism businesses, improving tourist facilities, developing tourist destinations, and supervising tourism businesses. The Promotion and Marketing Division is responsible for preparing materials for promotion, tourism investment, market analysis, conventions, strengthening networking with the national and international organisations regarding tourism, and preparing data for promoting culture and tourism. Finally, the Human Resources and Communities Empowerment Division is responsible for the development of tourism and creative economy human resources, as well as encouraging community participation in these areas (MoTCE, 2014).

Figure 4-3: BETA’s Organisational structure

Source: Translated from BETA’s Strategic Plan 2014-2019 (BETA, 2014)

This section only elaborates on BETA’s strategic plan and performance agreement. The nature of the annual plan, and the budget is similar to that of ALPHA (refer to section 4.3.2 and 4.3.3 in Chapter 4). Details of the analysis of the BETA’s strategic plan and the performance agreement are as follows.

4.2.2 Strategic planning

Like ALPHA, BETA has adopted strategic thinking in its planning. Examining the BETA’s strategic plan 2014-2009 suggests that the Office has envisaged its vision, missions, objectives and strategy. Also, the Office has designed programs and activities to achieve its performance targets as set out in the plan. The following paragraphs outline BETA’s strategic issues and objectives, performance indicators, and targets.

The strategic issues and objectives

BETA identified five strategic issues to be addressed over the period of the strategic plan (2014- 2019). Table 4-5 maps BETA’s strategic issues against the BSC perspectives, generated from the ALPHA’s strategic plan 2014-2019 (MoLC, 2014). Understanding how the BSC perspectives capture

Chief Officer Film industry promotion Finance General affairs and employees Secretar y Facilities and Infrastructure Art promotion Promotion and Marketing Tourism Entrepreneursh ip promotion Arts and culture-

based creative economy Human resources and community empowerment Tourism entrepreneurship Promotion Tourism agents’ cooperation Human resources and assistance Tourism communities’ education Supplies Marketing and cooperation Empowerment Supervisory and control Music industry and performing

the strategic issues provides a basis for investigating the strengths and weaknesses of the objective and strategy identification, which in turn lays the foundation for improvement.

Table 4-5: BETA’s strategic issues Perspectives Issues

Customer

The insignificant impact of promotion and marketing tourism on the increasing number of visitors

The undeveloped art and culture-based creative economy Internal business

process

The low competitiveness of the tourist destinations

The weakness in the synergy and partnerships with stakeholders. Learning and growth The poor competency and lack of capability among tourism human

resources

Source: BETA strategic plan, 2014-2019 (MoTCE, 2014)

Customer perspective

The BETA issues aligned to the customer perspective address expectations or demands, as suggested by Niven (2008) in his examination of the BSC. The issue concerning the increasing number of visitors may not directly address the visitors’ interests as the focus of the customer perspective. However, this issue is certainly crucial, as tourism is one of the sectors contributing to the City A economy. As such, the customers in this context are City A communities, rather than tourists. Hence, defining the insignificant impact of promotion and marketing as a strategic issue is part of the initiative of the Office to boost City A’s economy. The lack of sound promotion and marketing, as a result of the inability of BETA to use advertising media effectively, as well as to prepare quality materials for promotion, influences visitor decisions to come to the city (MoTCE, 2014). To address this issue, BETA has developed a strategic objective: to increase the number of domestic and international tourists. To achieve this, ALPHA has formulated two strategies: increasing the quality and scope of the media for promotion; and improving the accessibility of tourism promotion.

The issue of an underdeveloped art and cultural-based creative economy reflects the Office’s awareness that it must address stakeholder needs. The creative economy has only recently gained impetus, with the Indonesian Government issuing Presidential Instruction number 6 2009 on the development of the creative economy. Based on the data released by the Ministry of Tourism and Creative Economy, the creative economy has contributed significantly to the overall Indonesian economy. This not only increases gross national product but also accelerates tourism workforce participation and the number of businesses being established (MoTCE, 2014). Therefore, developing art and the creative economy represents a significant opportunity for BETA to have an impact on the communities in City A.

BETA responds to the issue of the undeveloped creative economy by defining an objective: increasing the number and the value of creative economy. To achieve this objective, BETA developed three strategies: develop a database for creative economy actors; encourage the creativity of the creative industry workers professionally; and improve the synergy in improving the community’s works of art (MoTCE, 2014).

Internal business process

City A offers various tourists attractions such as beautiful beaches, rivers, culinary tours, and entertainment. Unfortunately, these attractions have not been supported with adequate facilities and infrastructure, especially regarding the accessibility to tourist destinations and the availability of accommodation (MoTCE, 2014). To address this, BETA identified two objectives: to increase the infrastructure in supporting tourism competitiveness and enhance awareness of the tourism industry in developing regional tourism.

The second identified issue relating to weaknesses in synergies and partnerships with stakeholders has been addressed with an objective aimed at increasing the participation of communities in promoting culinary tourism.

Learning and growth perspective

BETA’s strategic plan highlights that the lack of competency and capability of staff is caused by high employee turnover and the mismatch between staff educational backgrounds and their responsibilities. In addition, in its 2014’s performance report, BETA highlights that the vague job descriptions have produced unclear divisions of tasks. As a result, some staff are overloaded, while others do less work (MoTCE, 2014). To cope with the issue, BETA developed an objective: to increase the human resources professionalism by widening access to education and training.

Performance indicators

BETA’s strategic plan 2014-2019 provides evidence that the Office has used output and outcome indicators as well as KPIs to measure its performance. The use of the indicators suggests that BETA has improved its strategic planning as the Office did not use indicators in its previous strategic plan (MoTCE, 2009). In the current strategic plan, BETA presents the indicators in a table which includes goals, objectives, programs, activities, performance indicators (both for programs and activities), targets for five-year period, and the budget to fund the programs and activities (MoTCE, 2014). Table 4-6 provides examples of the outcome and output indicators used by BETA. This table illustrates the linkage of the programs, the outcome indicators, the activities, and the output indicators. The Office formulated outcome indicators for each program. To achieve the outcomes,

specific activities were designed, together with the output indicators to measure the number of products resulting from the activities.

Table 4-6: Type of Information used in the management cycle

Programs Outcome Activities Output

Expand tourism marketing

An increase in the number of domestic and international tourist (%)

Conducting City A Travel Fair

The number of events and attendees

Coordinating/consulting with tourism

institutions

The number of networks among tourism institutions

Improve tourist destinations The number of competitive tourist destinations Rehabilitate facilities and infrastructure in the tourist destinations

The number of tourist destinations rehabilitated

Preparing tourism blueprint

The number of documents

Improve tourism human resources

The number of certified tourism human resources

Disseminating regulations regarding tourism

The number of participant attending dissemination of information regarding government regulation on tourism

Conducting workshops for tourism journalism

The number of participants in tourism journalism

Develop creative economy

The number of creative businesses and the value of their production

Disseminating regulations regarding film

The number of participants who understand about regulations for filmmaking Holding art

performances

The number of art attractions Conducting workshops

for handcraft

The number of participants in the workshops

Source: BETA’s strategic plan, 2014-2019 (BETA, 2014)

Apart from the output and outcome indicators, BETA’s strategic plan also presents KPIs. As part of the LGA jurisdiction, these KPIs were linked with the LGA’s strategic plan (LGA RPJMD). These KPIs are presented in the Office’s strategic plan in an independent matrix that links goals, objectives, KPIs, and the yearly targets for the five-year period 2014-2019 (MoTCE, 2014).

BETA does not explicitly use the BSC in preparing their strategic plans. However, interrogating BETA’s strategic plan 2014-2019 suggests that the KPIs presented in its strategic plan have covered the BSC perspectives. BETA’s translation of the vision into missions, goals, objectives and the KPIs is in accordance with the BSC’s function, which can be used to measure performance (Niven, 2008). The presence of KPIs allows BETA to measure to what extent the objectives have been achieved.

Table 4-7 was developed from an investigation of how the objectives and the KPIs capture the BSC perspectives. These are discussed in more detail below the table.

Table 4-7: KPIs classification based on the BSC

Perspectives Objectives KPIs

Customer

Increase the number of domestic and international tourists

The number of tourists (domestic and international)

Improve the quality and quantity of the tourism workforce by implementing

recruitment based on standards certification and education

The number of qualified (certified) tourism staff

Increase the number and the value of creative businesses

The number and the value of creative economy production

Internal Business Processes

Increase the infrastructure in supporting tourism competitiveness

The number of competitive tourist destinations

Increase the community participation in developing culinary tourism

The number of culinary tourism businesses on the riverside Improve the quality of managing programs,

budgets, and assets by evaluating reports and developing information systems

The percentage of facilities and infrastructure to support the Office

Learning and Growth

Increase the human resources

professionalism by widening access to education and training

The number of employees receiving training and attending workshops The Increase in the employees’ work- related discipline

Financial Increase the quality of managing programs, budgets, and assets by evaluating reports and developing information systems

The percentage of programs and financial performance achieved

Source: BETA’s strategic plan, 2014-2019 (BETA, 2014)

Customer perspective

The customer perspective, as shown in Table 4-7, captures three KPIs used to measure how BETA has achieved its three strategic objectives. These represent the mandate of the Office to formulate and control policies regarding tourism and the creative economy, to develop local culture, and to strengthen community empowerment in tourism (LAKIP, 2014).

In relation to the KPI to increase tourist numbers, Manager C (2015) confirmed that this was the proper measure to evaluate his performance in running promotion and marketing. However, he

admitted that the number of tourists visiting City A is not only influenced by BETA’s performance, especially in tourism marketing and promotion, but also other forces. The safety and convenience of the city also influenced tourist decisions to visit City A. To increase the number of tourists, the Office holds events, exhibitions, and festivals, to attract them to visit the city.

The second KPI, which is used as a measure for improving the quality and quantity of the tourism workforce, might be assumed as a measure for improvement in the learning and growth perspective. However, examining the function of the BETA to build tourism businesses confirms that tourism human resources involve stakeholders. In this respect, tourism human resources refer to the communities that support tourism, instead of BETA’s human resources. Therefore, this KPI should be classified in the customer perspective. The final KPI relating to the customer perspective is used to measure increases in the number and value of creative businesses. This KPI is aimed at improving the economy of creative businesses.

Internal business process perspective

As shown in Table 4-7, the internal business process perspective captures three KPIs used to measure the strategic objectives. The effort to improve the capacity of the Office to attract tourists provides a direct link to the customer perspective. The rationale behind this argument is that as the number of competitive destinations increase, more tourists are expected to visit City A. To do this, the Office has put some effort into improving tourist destination infrastructure. Examination of its strategic plan 2014-2019 indicates that BETA has designed activities, such as rehabilitating tourism facilities and providing tourists with tour buses, in order to achieve its intended performance goals (MoTCE, 2014).

Learning and growth perspective

The learning and growth perspective captures two KPIs, which are intended to measure the objective of increasing the human resources professionalism by widening access to education and training (refer Table 4-7). Increasing the number of employees receiving training and attending workshops is aimed at achieving a professional workforce that has the capability to manage programs, budgets, and assets efficiently and effectively.

Financial perspective

In its strategic plan, BETA defines two KPIs for the objective of increasing the quality of managing program budgets and assets by evaluating reports and developing information systems. Investigating the KPIs based on the four perspectives of the BSC, these two KPIs can be classified as the internal business process and the financial perspective consecutively.

Performance targets

The disclosure of targets shows that the Office’s strategic plan has significantly improved. In its current strategic plan, BETA has set performance targets, both yearly and cumulative for the five- year period (2014-2019). This was not done in its previous strategic plan (refer to MoTCE, 2009). In this earlier plan, BETA presented data regarding the trend of visitors over the period of five years. In fact, this data provides historical evidence of the Office’s achievement. However, BETA did not utilize this data to set performance targets for the next five years. In the new strategic plan, the Office not only set targets for the output and outcome of every program, but also for the KPIs. Regarding its vision to attract tourists, BETA aims at increasing the number of visitors from 3.8M in 2014 to 20M in 2019 for domestic tourists and from 50K to 282K for international tourists (MoTCE, 2014).

4.2.3 Annual planning

Once the strategic plan has been written and approved by the Mayor, BETA prepares an annual plan. The process for preparing the plan is similar to that used by ALPHA (refer to 4.1.3), as they are located within the same local government jurisdiction. BETA uses Ministry of Internal Affairs (MOIA) regulation 54 2010 and receives assistance from the Local Government A Planning Agency (LGAPA) and the consultants in preparing the plan.

In interrogating the use of performance information, two periods of annual plans were used: 2014 and 2016. The 2014 annual plan was written based on the previous strategic plan (2009-2014), while the 2016 annual plan references the current strategic plan (2014-2019). To obtain more in-depth information, an interview was also conducted with Manager B, who is responsible for coordinating the preparation of annual plans at LGA. Manager B (2015) indicated that he put effort into making better use of performance information, with workshops and consultation provided to enlighten the preparers of the plan in this respect.

4.2.4 Performance agreement

BETA’s new strategic plan (2014-2019) is effectively used for preparing planning documents for the 2015 financial year. As the data collection for this study was conducted in the first quarter of 2015, the archival data used to examine the use of performance information in preparing performance agreements was based on the previous strategic plan (2009-2014).

Regardless of the drawbacks in the previous strategic plan 2009-2014, BETA developed a performance agreement that allowed it to measure its performance. BETA made an effort to present strategic objectives, KPIs, and performance targets (refer to MoTCE, 2015). This conforms with the Ministry of Manpower and Bureaucracy Reform regulation number 29, 2010.

BETA’s objectives, stated in its 2014’s performance agreement, are derived from its strategic plan 2009-2014, while the KPIs are defined based on the BETA’s KPIs document, mandated by the Mayor’s regulation number 11, 2013. Programs and activities presented in the agreement were derived from the budget documents.