Risk Management Information System for The Jakarta Consulting Services Firms

Abstract

This study documents the process whereby a practical and relevant industry-wide strategic management information system (SMIS) was developed for the Jakarta consulting service industry. The SMIS was designed to provide Jakarta consulting service with an improved understanding of the business environment in which they operate and to provide some advance warning of new trends in order to extend the strategic planning horizons of management and owners of consulting service firms. This was done against a background of very limited availability of current industry statistics. A literature survey of available historical or secondary data relating to the Jakarta consulting service firms, building and construction industries was conducted in order to determine the relevance and usefulness of such data for the purposes of developing the SMIS. This survey provided background information on the consulting engineering industry, relevant aspects of the Jakarta business environment and the impact of changes in this environment on the local consulting service industry. The importance and principles of strategic planning and strategic management are discussed, with specific reference to the nature of environmental scanning. The use of management information systems in the business environment is reviewed with specific emphasis on the application of management information systems in consulting service enterprises. The quantitative secondary data collected in the literature survey was used as a benchmark or reference databank to calibrate and/or evaluate the accuracy of the information collected through ten regular industry surveys that were conducted to collect statistically representative primary data. The secondary and primary data were used to construct a number of time series for each of three key indicators of the health of the Jakarta consulting service industry, namely employment, salaries and fee income. The SMIS developed, consists of a system to identify new key issues in the business environment and to decide on issues that no longer require further monitoring, a system of industry surveys at fixed intervals, using both quantitative and qualitative survey techniques, a system to capture and interpret survey data, updating time series for key business indicators with latest survey data, and producing reports on the state of the industry, including limited short term forecasts for business conditions. The SMIS has proved it self useful and provides information to assist strategic management in the Jakarta consulting services industry, especially in decision situations regarding large strategic management issues. The system also manages to address the needs of other current and potential users of the system, such as operational managers, industry lobbyists, media liaison and public relations managers, human resources managers, construction contractors etc. The SMIS furthermore complies with all the specific criteria that were set at the commencement of this study, such as confidential handling of source data, affordability and sustainability and, by improving general understanding of the business of consulting services in Jakarta, contributes to the previously existing knowledge base.