Strategic IT Development Plans

Preliminary preps
Feb 28, 2015
1. 9 Feb 2015 - BoD – managers
2. 11 Feb 2015: Setyono and Key Finance People – discussed scope of BOSE and steps to take (resource planning,
discussion w SAP, on how to work out the detail project mngt plans)
3. 28 Feb: S, HS, FE, Nn, RR, TS, Gid
4. 2 Mar, 2015: HS, S, G
 The group dimensions – an overall compact view

I. PT ML and subsidiaries/affilitates: SFUs:

a) Steel owning
b) Steel operator (OO, Domestic)  AM
c) Ship management
 Finance
i. PMS (VOEs and availability) function
ii. Internal WS (FR, Treasury/CF,
d) Other non-liner segments: Forwarding, Container Port, Tax, Finance, CM)
NVOCC, Coal Logistics (TBs, TLs), Offshore, Trucking
 CP & internal
e) Legal/fiscal structure: subsidiaries, affiliates – risk/capital logistics/warehous
allocation and the transfer pricing mechanisms to support ing
The culture
both the management and fiscal &
II. Multi-entity governance  HR
a) Commercial value-based management
 GA
b) Fiscal management
III. Channel distribution  IA
a) Nation-wide (and “retail”)
b) The liner is “interlinked” with PBMs and Depo Ops (15  Legal
entities)
 IT
9 SBUs, 49 Channel Distribution Points, 34 legal entities, 3
sovereignities On a matrix of
centralization and
decentralization
 The functional dimensions and flows

Holding and HQ Level SBUs Legal & Distribution

Network

Finance Applies to other strategic support functions (there are 6) – ESPECIALLY IT as the ENABLER!
Function
Financial Accounting 9 SBUs:
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( Notional Financial Reporting )
1. Container liner
2 Treasury & Strategic Finance 2. Coal logistics
 Distribution
3. Forwarding
channel
3 Cash Mngt 4. Offshore/PSV network/branches
(37 Shipping and
5. Container Port
16 Forwarding)
Finance (Facilitate & Control
4 6. Stevedoring &
the Front Functions: Comm & Ops)
 Legal entities (34)
depo
5 Taxation 7. Trucking  Sovereignity (3)
8. Regional liner

6 Central Purchasing 9. (Workshop)

Finance facilitation and The consolidation both for

control notional and management
 Systems grouping – by the core accountability domains

FRONT Mid Back

(BUSINESS Models (Finance) (Financial

and Processes)* Reporting)

BOSE (Back Office Systems Enhancement)+ ??

Due to:

 Systemic weaknesses of the present accounting

system (Ax) – ie to cope with the expanding
businesses;

 The need to fix certain functional accountability

between front and mid (this denotes the +):

 The lingering question whether BOSE is an

* Commercial/Sales, Ops, and certain support/F advisable alternative viz a viz embarking on a
such as CP, Warehousing, HR, GA staged BPR – what are the systemic benefits?
The system at a glance

• Ax as the back-office system (plus certain functionalities in the Mid). This is the core –
plus G-Power for MIF;

• Dedicated front systems (Unicorn, Ulysses, G-Power, Self-developed/highly

customized systemS);
pto
• The above are not integrated. Rgd the interface systems we can simplify it as follows:
– Unicorn -> Ax: Cost via DA System, AR’s Invoicing is outside the front system
– DA System is manual
– In brief: the flows to the GL System is fragmented, manual, the accountability
over the interfaces’ integrity is in grey area at best

• The documentation of the business models and processes is not robust

• Financial reporting system has been performing well (very auditable, IFRS
Compliance, management requirements both proforma and notional are met) - this
must not be “disturbed” by a confusing (or ambiguous) IT-driven measure!

• Virtually all of our managers are not “system/legacy builder” – resistancy for change is
likely very high (58 years in business – with the up to the present fundamental
performances and reputation) – fluent and embracing communication is a must!
The present IT architecture – a bird view

Back: Fin R function Mid: Finance Front functions

DA System
Unicorn: Commercial & the supporting tech ops
Inv System
Ax Ulysses: PMS – not yet connected to finance

Manual
payment/receipt Customized operational support systemS, such
systems as Inventory/Warehousing System, Customized
internal workshop systems/AAB, etc

HRIS
 Weak interfaces between front and mid (take
the case of DA and Inv Systems – they should
not be there in the first place – should be
 Too much “financial-driven” repos to the front
control  Grey functional accountabilities – weak SIC
 Inefficient back office function  No robust operational data-base to support the
AND system financials
 Lack of operational-data depth

integrated G-Power: for forwarding – being deployed for

Cyber-money another entity of the same segment
Main components
 DA System

Otorisasi approval ada di level HO

1. Kegiatan di catat secara manual,

menghasilkan rekap realisasi
kegiatan, dokumen rekap ini yg
dipakai sebagai dasar untuk
input transaksi di system dan
dasar cek tagihan vendor

2. Bagaimana dengan integritas

data operasi? Siapa yg
bertanggung jawab atas
kebenaran data operasi? Karena
realisasinya banyak koreksi yang
dilakukan setelah dibandingkan
dengan invoice vendor (sampling
cek atas 124 voyage, 26 voyage
ada koreksi  20%)

3. Selama ini beban pengecekan

ada di keuangan :follow up ke
bagian operasi untuk
mendapatkan kepastian
berapa/yg mana yg benar

- - - = batas tanggung jawab yang seharusnya antara front dan keuangan

 Invoicing System

 Redundancies in Unicorn and Ax;

 The front is deficient and this is to be remedied to straighten the mid/ Finance Funtion;

. . . Basically no transfer of front/ transactions’ disputes are passed on to the mid function, yang berjalan sekarang
tidak ada proses memastikan data apakah sudah benar oleh front sebelum data masuk ke proses invoicing

- - - = batas tanggung jawab yang seharusnya antara front dan keuangan

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What we are thinking at the present

• BOSE+?:
– An ERP w/o the “flows” from the front? Ie just to prepare to have a solid back office IT
system to anticipate the improvements of the front systems?
– Definition of the +
– An independent assessment covering the above (must incl the resources plan and mngt)
– can it be really substantiated as an advisable measure to take immediately?

OR

• Overall business model and blueprints (strategic roadmaps)

– Review of the existing models and big processes, and the underlying IT Systems
– Strategic IT development plan
• Phases (priority on certain SBU?)
• The recommended IT development strategies incl of the resoure management
• BOSE is positioned within this strategic framework (and to focus on the GL Module
for instance)

&

• Professional parties to be invloved?

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DETAILED PLAN IS A PREREQUISITE

• Scope and objectives

• Resource planning

• Timeline – scheduled deliverables

• Robust PM to plan manage the above

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---------- oOo ----------
This so called “application building” – overly simplified? – technical
elaborations are required

Mgt Support
Mgt

System

Finance
Mgt

Fixed Assets
Accounting

Front End
Purchase Logistic HR
(Unicorn)

ERP
Operation

Front End
Workshop GA
(Ulysses)

Other
Office Automation …
Front End

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