Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 60139-ID

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$65 MILLION

TO THE

REPUBLIC OF INDONESIA

FOR A

STATISTICAL CAPACITY BUILDING-CHANGE AND REFORM FOR THE

DEVELOPMENT OF STATISTICS (STATCAP-CERDAS) PROJECT

March 15, 2011

Poverty Reduction and Economic Management Unit

East Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without World

Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective as of March 1, 2011)

Currency Unit = Indonesia Rupiah (IDR)

IDR 8,812.5 = US$ 1

US$ 0.113475 = IDR 1,000

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ABS Australian Bureau of Statistics

ACAP Anti Corruption Action Plan

AIPEG Australia-Indonesia Partnership for

Economic Governance

Bappenas National Development Planning Agency/

Ministry of Planning

BPK State Audit Board

BPS Statistics Indonesia/ Central Statistics

Agency

CERDAS Change and Reform for the Development of

Statistics

COTS Commercial Off The Shelf

CPI Consumer Price Index

CPS Country Partnership Strategy

DIPA Budget Order

DoSIT Directorate of Statistical Integration and

Transformation

DRC Disaster Recovery Center

EA Enterprise Architecture

EDI Electronic Data Interchange

ERP Enterprise Resource Planning

ETC Education and Training Center

FMS Statistical Council

GAC Governance and Anti Corruption

GDP Gross Domestic Product

GDRP Gross Domestic Regional Product

GFMRAP Government Financial Management &

Revenue Administration Project

GIS Geographical Information System

GPS Global Positioning System

GSBPM Generic Statistical Business Process Model

IMF International Monetary Fund

ISIC International Standard Industrial

Classification

ITIL Information Technology Infrastructure

Library

KeMenPAN-

RB

Ministry of Administrative and Bureaucracy

Reform

KOSTAT Statistics Korea

MOF Ministry of Finance

NSO National Statistics Office

NSS National Statistics System

PINTAR Project for Indonesian Tax Administration

Reform

PMU Project Management Unit

POM Project Operations Manual

PPI Producer Price Index

PPK Commitment Officer

PSC Project Steering Committee

QAF Quality Assurance Framework

RPI Rural Price Index

RPJM National Medium Term Development Plan

SAKERNAS National Labor Force Survey

SDDS Special Data Dissemination Standards

SDMX Statistical Data and Metadata Exchange

SIMPEG HR Management Information System

SNA System of National Accounts

STATCAP Statistical Capacity Building

STIS Statistics College

SUSENAS National Social Economic Survey

UNECE United Nations Economic Commission for

Europe

USDA-NASS United States Department of Agriculture-

National Agricultural Statistics Service

VPN Virtual Private Network

WAN Wide Area Network

WPI Wholesale Price Index

Vice President: James Adams

Country Director: Stefan Koeberle

Sector Director Vikram Nehru

Sector Manager: Shubham Chaudhuri

STATCAP Program Manager: Grant Cameron

Task Team Leader: Vivi Alatas

INDONESIA

Statistical Capacity Building-Change and Reform for the Development of Statistics

(STATCAP-CERDAS)

CONTENTS

Page

I. STRATEGIC CONTEXT ...............................................................................................1

A. Country Context ............................................................................................................1

B. Sectoral and Institutional Context ...................................................................................1

C. Higher Level Objectives to which the Project Contributes...............................................4

II. Project Development Objectives......................................................................................4

A. Project Development Objectives ....................................................................................4

B. Project Beneficiaries ......................................................................................................4

C. PDO Level Results Indicators ........................................................................................5

III. Project Description ......................................................................................................6

A. Project Components .......................................................................................................6

B. Project Financing ......................................................................................................... 12

C. Lessons Learned and Reflected in the Project Design ................................................... 13

D. Alternatives Considered and Reasons for Rejection ...................................................... 14

IV. IMPLEMENTATION ............................................................................................... 14

A. Institutional and implementation arrangements ............................................................. 14

B. Results Monitoring and Evaluation............................................................................... 16

C. Sustainability ............................................................................................................... 16

V. Key Risks and Mitigation Measures.............................................................................. 17

VI. APPRAISAL SUMMARY ......................................................................................... 17

A. Economic and Financial Analyses ................................................................................ 17

B. Technical ..................................................................................................................... 17

C. Financial Management ................................................................................................. 18

D. Procurement ................................................................................................................ 18

E. Social .......................................................................................................................... 19

F. Environment ................................................................................................................ 19

G. Other Safeguards Policies Triggered ............................................................................ 19

Annex 1: Results Framework and Monitoring ..................................................................... 20

Annex 2: Detailed Project Description.................................................................................. 29

Annex 3: Implementation Arrangements ............................................................................. 49

Annex 4: Operational Risk Assessment Framework ............................................................ 61

Annex 5: Implementation Support Plan ............................................................................... 64

Annex 6: Team Composition................................................................................................. 66

i

PAD DATA SHEET

INDONESIA

Statistical Capacity Building-Change and Reform for the Development of

Statistics (STATCAP-CERDAS)

PROJECT APPRAISAL DOCUMENT

East Asia and Pacific

Poverty Reduction and Economic Management Unit (EASPR)

Date: March 15, 2011

Country Director: Stefan Koeberle

Sector Director: Vikram Nehru

Sector Manager: Shubham Chaudhuri

Team Leader: Vivi Alatas

Project ID: P106384

Lending Instrument: Specific Investment Loan

Sectors: Central government administration

(100%)

Themes: Economic statistics, modeling and

forecasting (29%); Macroeconomic

management (29%); Other economic

management (14%); Decentralization (14%);

Managing for development results (14%)

EA Category: C

Project Financing Data:

Proposed terms: VSL

[x] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other:

Source Total Amount (US$M)

Total Project Cost:

Borrower:

Total Bank Financing:

IBRD

New

83.0

18.0

65.0

65.0

Borrower: Republic of Indonesia

Responsible Agency: BPS-Statistics Indonesia

Jl. dr. Sutomo 6-8, Jakarta, Indonesia 10710

Contact Person: Rusman Heriawan, Chief Statistician

Telephone No.: (62-21) 381-4001

Fax No.: (62-21) 381-4001

Email: bpshq@bps.go.id

Estimated Disbursements (Bank FY/US$ m)

FY 2012 2013 2014 2015 2016

Annual 3.9 11.4 15.2 21.2 13.3

Cumulative 3.9 15.3 30.5 51.7 65.0

ii

Project Implementation Period: May 1, 2011 – June 30, 2016

Expected effectiveness date: May 1, 2011

Expected closing date: December 31, 2016

Does the project depart from the CAS in content or other significant respects? ○ Yes ● No

If yes, please explain:

Does the project require any exceptions from Bank policies?

Have these been approved by Bank management?

Is approval for any policy exception sought from the Board?

○ Yes ● No

○ Yes ● No

○ Yes ● No

If yes, please explain:

Does the project meet the Regional criteria for readiness for implementation? ● Yes ○ No

If no, please explain:

Project Development objective

To increase the effectiveness and efficiency of the Indonesian National Statistics Office (BPS-

Statistics Indonesia) to produce and disseminate reliable and timely statistics in accordance

with international standards and best practices, and to be responsive to user needs.

Project description

Component A: Improved Statistical Quality includes the strengthening of data

collections and processing, and statistical methodology for selected priority product lines

Component B: Improved ICT Platform and Statistical Information Management

Systems supports development of a corporate ICT Enterprise Architecture, including a

sound Information Systems Governance framework, to enable its plan to standardize its

IT operations across the organization

Component C: Improved Human Resources Management and Development will

addresses the critical support function of BPS Human Resources Management and

Development

Component D: Improved Organizational Alignment will support the review and re-

alignment of the BPS organizational structure to ensure it remains in line with the new

business needs

Component E: Project Management will ensure effective and efficient management

and administration of the Project

Safeguard policies triggered?

Environmental Assessment (OP/BP 4.01)

Natural Habitats (OP/BP 4.04)

Forests (OP/BP 4.36)

Pest Management (OP 4.09)

Physical Cultural Resources (OP/BP 4.11)

Indigenous Peoples (OP/BP 4.10)

Involuntary Resettlement (OP/BP 4.12)

Safety of Dams (OP/BP 4.37)

Projects on International Waters (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

○ Yes ● No

iii

Conditions and Legal Covenants:

Financing

Agreement

Reference

Description of Condition/Covenant Date Due

Article IV

Section 4.01

of the LA

The Project Operations Manual Volume I, shall have been

prepared in form and substance satisfactory to the Borrower and

the Bank, and approved by the Project Steering Committee.

Before

effectiveness

Section I. A.

4. (a) of

Schedule 2

Request for expressions of interest for Owner‘s Agent Services

will have been issued.

60 days after

effectiveness

Section I. B.

1. (b) of

Schedule 2

The Project Operations Manual Volume II, shall have been

prepared in form and substance satisfactory to the Borrower and

the Bank, and approved by the Project Steering Committee.

90 days after

effectiveness

Section I. A.

3. (c) of

Schedule 2

Proposal to establish PMU as a structural unit will have been

submitted to the Office of the President, through the Ministry of

Administrative and Bureaucracy Reform (KeMenPAN-RB).

180 days

after

effectiveness

Section I. B.

5. of

Schedule 2

The Terms of Reference (TOR) for the project audit will have

been agreed with the Bank.

November

30, 2011

Section I. B.

6. of

Schedule 2

Recurring costs for operations and maintenance of systems

developed and installed under the Project will have been

assessed, and sufficient funding will have been allocated in BPS

budget plans

June 30,

2013

1

I. STRATEGIC CONTEXT

A. Country Context

1. Indonesia is an emerging middle-income country with per capita GDP of $2,230, and

its economy proved to be resilient during the recent global financial crisis, weathering its effects

relatively well—the country‘s GDP growth rate was 4.2 percent in 2009, which was one of the

highest in the region. However, rate of poverty reduction has not kept pace with economic

growth, although poverty rate has been decreasing steadily and is down to 13.33% in 2010.

Geographically diverse, the population of 238 million people is dispersed across six thousand out

of more than 17,000 islands that make up this archipelagic country, and regional disparities in

economic growth and poverty reduction pose significant development challenges. To address

these diversity and disparity, the Regional Autonomy law in 2001 effected ―big-bang‖

decentralization to bring centers of government closer to its beneficiaries, and devolved many

public service delivery responsibilities, such as health and education, as well as corresponding

planning and budgeting authorities, to district governments. As a result, Indonesia has one of the

most decentralized governments in the region today.

B. Sectoral and Institutional Context

2. Statistics is a crucial element for informed, evidence-based decision making, and

monitoring of national development strategies. The National Statistics System (NSS) of the

Republic of Indonesia is highly centralized. Badan Pusat Statistik (BPS) is the coordinator of

NSS and is responsible for producing a wide range of key social and economic statistics,

including poverty, labor, price, trade, production, and national accounts data. Government

agencies from Ministry of Planning (Bappenas) to Ministry of Finance to line ministries depend

on BPS statistics for planning and budgeting, targeting of policies and programs, as well as

outcome monitoring and evaluation.

3. Under more open and decentralized government, demand for relevant, accurate,

timely, and disaggregated data is increasing. BPS is a central government agency, which is

vertically organized with regional offices in all provinces and districts. After regional autonomy

went into effect in 2001, much of the rest of the government has become highly decentralized,

which has created a high demand for more geographically disaggregated data. While most of its

surveys have been designed to provide statistics representative at national level, there is

increasing demand for BPS to provide sub-national data and information for local governments.

4. There is increased public scrutiny and stakeholder demand for transparency,

engagement and responsiveness from BPS. As the Indonesian population becomes more

aware of the benefits of inclusive economic growth for enhancing their living standards, they are

increasingly holding the policymakers to account for delivering better economic performance

and demanding concrete evidence to demonstrate progress. Among the four key statistics

released by BPS that are being closely watched and scrutinized by politicians and the public

alike are economic growth, inflation, unemployment, and poverty. Even small discrepancies or

inconsistencies that are discovered are enough for the public to question the credibility of the

numbers and the processes to produce such numbers, or even the integrity of the official statistics

agency that produces them.

2

5. Changing environment of Indonesian economy and society. The structure of

Indonesia‘s economy is becoming increasingly complex, with growing service sectors and a shift

from traditionally resource-based towards manufacturing-based economy. With economic

growth and urbanization, challenges for surveys also come from growing population of middle-

to-high income households and city dwellers in difficult to access areas, such as apartment

building complexes. These add to the usual difficulties of collecting information from reluctant

businesses and extremely remote areas. These changes in the external environment require BPS

to re-think its methodologies and operations to ensure the continued relevance of their statistics

to accurately represent the social and economic conditions of the country.

6. Increased pressure for reform of public service bureaucracy. With increased demand

for improved accountability, there is increased pressure for the government to deliver public

service more effectively and efficiently. The President has put Bureaucracy Reform as one of

the highest priorities of his administration‘s programs, and has called for the government

agencies to provide services ―better, faster, and cheaper‖. This requires a shift in work culture

and environment, to focus on quality, performance and results. These pressures also apply to

BPS to deliver better quality statistics with shorter timelag and with improved efficiency.

7. Statistical capacity and constraints. BPS was established as a national statistics agency

in 1960, and BPS is recognized within the region as a strong national statistics office with

capacity to produce a wide range of economic and social statistics. However, collecting data in a

large and diverse country such as Indonesia is both a labor and cost intensive endeavor. Given

resource limitations, much of the institutional budget is allocated for salaries, wages and field

operations, leaving little discretionary resources for innovation, reform and capacity

development. Fortunately, there is also a lot of room for efficiency gains through investments in

process improvements and technology, as much of the current BPS operations still rely on point-

to-point, paper-based processes and its technology infrastructure is outdated. There are also

opportunities for greater integration of surveys and greater use of common tools and shared

systems to improve timeliness and efficiency.

8. BPS commitment to reform. The leadership of BPS is keenly aware of the changes in

its external environment, and is committed to a reform of the organization to deliver better

results for the public. In 2008, the Senior Managers of the organization—Echelon I and Echelon

II officials, including heads of province offices—undertook a strategic planning process, also

involving external stakeholders, to determine their vision for future organization. The resulting

2010-2014 Strategic Plan for Change and Reform for the Development of Statistics (CERDAS –

which means ―smart‖ in Indonesian) summarizes their agreed priorities for improvements to be

undertaken over the next five years. The CERDAS plan focuses on the strategic improvement

priorities, and is part of BPS‘s medium-term strategy (renstra), as well as constituting the core of

its Bureaucracy Reform roadmap. In an effort to foster ownership and buy-in of the reform plan,

BPS leaders have taken advantage of various available forums, such as management meetings

and national coordination meetings of regional offices. These occasions have been used to

consult and communicate the reform aims to middle managers and regional office managers

throughout the organization. The Chief Statistician has also declared the CERDAS plan as the

framework to coordinate and align all donor and partner assistance for BPS.

3

9. Based on the strategic priorities identified in the CERDAS plan, BPS has developed

a BPS Modernization Proposal. Since strategic priorities for the next five years were agreed

by BPS Senior Executives, further diagnostics and analyses for each reform area in the CERDAS

plan were conducted by BPS and external experts, including detailed reviews of statistical

methodologies, ICT and HR areas, and the findings and recommendations have been

incorporated into the BPS Modernization Proposal. This document, completed in 2010, contains

high level integrated systems descriptions, the current state of processes in BPS, initial

diagnostics of issues and problems, and the improvement objectives agreed to in the CERDAS

plan. The document was developed by BPS under the coordination of its Project Management

Unit (PMU), with the involvement relevant Subject Matter units, as well as corporate services

areas of Statistical Information Systems Directorate and HR Bureau. This process has further

strengthened the shared vision and ownership of the reform program by BPS.

10. Rationale for Bank Involvement.

(a) The Bank has international knowledge and experience. The Bank possesses

unique expertise and resources in developing and guiding comprehensive, integrated, and

targeted projects on statistical capacity building, including institutional and infrastructure

strengthening. The Bank, which is an important user of economic and social data, has

broad knowledge of the country‘s development situation, and focuses on capacity

building, is well equipped to assist the government with this effort. The Bank has

developed a global STATCAP program, which combines funding, international

partnerships, streamlined procedures, and knowledge on best practice in statistical

capacity building. There are opportunities for knowledge sharing among countries across

the global STATCAP program, and this Project has drawn on experience and expertise in

the Development Data Group (DECDG).

(b) In Indonesia, the Bank has been a trusted development partner for designing

complex projects with institutional reform components, such as projects to support

Budget, Treasury and Tax Reform1. This Project will also complement the Bank support

for broader public sector reform, as the government is looking for lessons learned from

reform efforts of individual agencies, such as MOF, Directorate General of Tax and BPS,

to inform the bureaucracy-wide reform strategy (―Grand Design‖) being developed by the

Ministry of Administrative and Bureaucracy Reform (KeMenPAN-RB).

(c) The Bank already has a strong relationship with BPS. The Bank in Indonesia has

a long-standing relationship with BPS. Over the years, various technical assistance and

Trust Fund-support have been provided to improve specific areas, such as small area

estimation, household survey assessment, and methodology for identifying poor

households.

(d) Bank operations in Indonesia will benefit from better data. The Bank uses BPS

data extensively for its analytical, technical assistance and operations work. Improved

quality of BPS data will be of benefit to the government and people of Indonesia, but will

1 Government Financial Management & Revenue Administration Project (GFMRAP); Project for Indonesian Tax

Administration Reform (PINTAR)

4

also be of use to the Bank and other agencies for engaging in policy dialogue with the

government and in planning and implementing other projects and programs. The Bank

also uses BPS data to provide capacity building support to users for policy analysis.

C. Higher Level Objectives to which the Project Contributes

11. Supporting national development goals and priorities: strengthening governance

and accountability. In the 2010-2014 National Medium-Term Development Plan (RPJM),

bureaucracy and governance reform is the first of the 11 national development priorities. The

Project contributes to this objective in two ways. First, at the whole-of-government level,

improved statistics from BPS will support an informed and evidence-based decision making

culture. BPS provides key information and data used for planning, and for monitoring and

evaluation of RPJM implementation progress. Secondly, the Project contributes to bureaucracy

reform efforts at the agency level, improving institutional performance and efficiency of BPS.

12. Supporting Bank priorities in Indonesia: investing in Indonesia’s institutions. The

central theme of the 2009-2012 Country Partnership Strategy (CPS) is ―investing in Indonesia‘s

institutions,‖ and this Project is one of the key programs in the CPS under the core cross-cutting

engagement of Central Government Institutions and Systems to enhance public financial

management and governance to increase the development impact of priority budget expenditures

for a competitive, inclusive, and sustainable Indonesia. The Project will strengthen BPS‘s

institutional capacity to deliver better information and services to the government and the public.

II. PROJECT DEVELOPMENT OBJECTIVES

A. Project Development Objectives

13. The development objective of the Statistical Capacity Building-Change and Reform for

the Development of Statistics (STATCAP-CERDAS) Project is to increase the effectiveness and

efficiency of the Indonesian National Statistics Office (BPS-Statistics Indonesia) to produce and

disseminate reliable and timely statistics in accordance with international standards and best

practices, and to be responsive to user needs.

14. The STATCAP-CERDAS project will support the implementation of BPS‘s five-year

reform program articulated in its 2010-2014 Strategic Plan for Change and Reform for the

Development of Statistics (CERDAS). This will be achieved by: streamlining and integrating

processes and systems for major product lines; implementing quality assurance system;

improving dissemination and user communication; adopting international standards; improving

information management systems; strengthening human resources management and

development; and aligning organizational structures to business needs.

B. Project Beneficiaries

15. The main Project Beneficiary is BPS. The Project involves at least 12 out of 15 Subject

Matter units in BPS, Program Development and Personnel Affairs Bureaus, and the Education

and Training Center. The systems and institutional improvements envisaged under the Project

are expected to eventually affect the whole organization—all its 14,000 staff in headquarters, 33

province and 451 district offices.

5

16. Users of BPS statistical products and services, in government and outside of government,

e.g. in universities, research institutions, businesses, and media, will also receive direct benefit

from the outcomes of the Project. Improved statistics from BPS will support an informed and

evidence-based decision making in Indonesia, as BPS provides key information and data used for

planning, and for monitoring and evaluation of development policies and programs. Improved

statistics from BPS will also contribute to improved poverty targeting, and monitoring of and

response to vulnerability and shocks, such as food and financial crises.

C. PDO Level Results Indicators

17. Key Performance Indicators. As the desired outcome of the Project is improved

statistical quality, the Key Performance Indicators follow the internationally agreed Quality

Assurance Framework for official statistics, and measures of success include dimensions of

Accuracy, Relevance, Timeliness, Accessibility, Coherence and Interpretability. Detailed

indicators can be seen in Annex 1.

(a) Accuracy. Demonstrable improvement in the accuracy of key statistics as evidenced

by:

(i) a reduction in the statistical discrepancy between the quarterly and annual

production and expenditure estimates of growth in the national accounts

(ii) an increase in the response rate of the Annual Survey of large and manufacturing

businesses

(iii)an increase in the user satisfaction with the accuracy of BPS statistics, including

the extent of revisions

(b) Relevance. Availability of important new statistics as evidenced by the establishment

of:

(i) the introduction of the 2008 version of the System of National Accounts

(ii) a national producer price index

(iii)quarterly labor force survey

(c) Timeliness. Improvements in the timeliness of key statistics as evidenced by:

(i) reducing the time lag in the production of preliminary and final imports and

exports data

(ii) reducing the time lag in the publication of final figures from the National Social

Economic Survey (SUSENAS)

(iii)reducing the time lag in the publication of annual labor force estimates

(d) Accessibility. An improvement in the accessibility of BPS statistics as evidenced by:

6

(i) a dynamic up-to-date web site

(ii) an increase in the user satisfaction with the accessibility of BPS statistics

(e) Coherence. An improvement in the coherence of BPS statistics as evidenced by:

(i) a reduction in the discrepancy between the sum of the Provincial estimates of

GDRP and the GDP for Indonesia

(f) Interpretability. An improvement in the interpretability of BPS statistics as

evidenced by:

(i) an increase in the statistics produced by BPS, especially widely used statistics

(e.g. national accounts, prices, labor and SUSENAS), that have supporting meta data

that describes the concepts, data sources and statistical methods that have been used.

(ii) the availability of seasonally adjusted monthly and quarterly statistics

III. PROJECT DESCRIPTION

A. Project Components

18. The STATCAP-CERDAS project supports fundamental reforms and change efforts of

BPS to improve the quality of statistics. The scope of project activities under specific project

components have been defined based on assessment of current statistical methodologies,

business processes and systems carried out by BPS, the Bank and external experts, including

those from other National Statistics Offices, such as the Australian Bureau of Statistics (ABS),

and US Department of Agriculture-National Agricultural Statistics Service (USDA-NASS). In

June 2010, BPS also contracted a consultant firm to take the BPS Strategic Plan for Change and

Reform for the Development of Statistics (CERDAS Plan) and the BPS Modernization Proposal,

and develop technical specifications and requirements for implementation. The final

procurement documents will be delivered by April 2011.

19. In light of escalating demands and limited resources, the Project will assist BPS‘s efforts

in priority setting around major statistical collections and exploring trade-offs between

competing needs to ensure the BPS work program is ‗doable‘ with existing resources. The main

aim of the Project will be to improve effectiveness and efficiency of BPS through increased

integration of statistical processes, with emphasis on use of common methods and tools, and

shared systems. Project activities will focus on: (i) improvements in methodologies; (ii) training

activities; (iii) strengthening of quality assurance system; (iv) improvements in user engagement

and dissemination; (v) investments in strengthening the ICT and information systems; and (vi)

improvement of human resources policies and procedures, and organizational structure.

20. The Project will have five components: (A) Improved Statistical Quality (US$32.8

million); (B) Improved ICT Platform and Statistical Information Management Systems (US$30

million); (C) Improved Human Resources Management and Development (US$9.3 million); (D)

Improved Organizational Alignment (US$4.8 million); and (E) Project Management (US$6.1

million), as shown in Figure 1. A detailed project description is included in Annex 2.

7

Figure 1: The Framework of STATCAP-CERDAS Project Design

A. Statistical Quality

E. Project

Management

--

E.1

Project

Governance

--

E.2

Monitoring &

Evaluation

--

E.3

Project

Management

--

E.4

Project

Administration

Outcome Indicators

Improved Quality

Accuracy

Relevance

Timeliness

Accessibility

Coherence

Interpretability

A.1

National

Accounts

A.2

International

Trade

Statistics

A.3

Production Statistics

A.4

Price

Statistics

A.5

Poverty and Labor Statistics

A.3a Large &

Medium

Manufacturing

Statistics

A.3b

Horticulture

& Estate

Crops

Statistics

A.5a Social

Economic

Survey

(SUSENAS)

A.5b Labor

Force Survey

(SAKERNAS)

A.6 Survey Management, and Methodological Innovations

A.7 Statistical Analysis and Quality Assurance

A.8 Dissemination, User engagement and Communications Strategy

B. ICT Platform and Statistical Information Management Systems

B.1 Data Warehouse Development and Network Improvements [Network, Hardware, Database Platform, Data

Warehouse]

B.2 ICT Standardization [ICT architecture, procedures, hardware and software]

B.3 Corporate Information Systems Management [ICT Infrastructure Mgt, ICT Contract Mgt, ICT Mgt

Committee]

B.4 IT organization and human resources [management and training of IT staff]

C. Human Resources Management and Development

C.1 Effectiveness of HR Principles and Policies

C.2 Effectiveness of HR training and development, including Education and Training Center

C.3 Develop HR Information System

D. Organizational Alignment

D.1 Alignment of Organizational Structure [Institutional Framework]

D.2 Alignment of Corporate Culture [Change Management]

D.3 Effective Corporate Governance [Internal Control System]

21. Component A: Improved Statistical Quality. Improvement of Statistical Quality is a

major component of STATCAP-CERDAS project. Component A includes the strengthening of

Data Collections and Processing, and Statistical Methodology for selected priority product lines ,

as well as key cross cutting issues, such as analysis, survey management, quality assurance, user

engagement and dissemination. The statistical systems need to be improved to detect and

process errors more efficiently, integrate better to eliminate duplication and increase inter-

operability of data and systems, and provide reliable and timely statistical products.

22. Sub-components A1-A5 correspond to the priority statistical products selected by BPS

based on user demand: National Accounts; International Trade Statistics; Production Statistics;

Price Statistics; and Poverty and Labor Statistics. These product lines also represent the various

types of data collection in BPS, i.e. (i) compilation of administrative data (e.g. export-import

statistics), (ii) household surveys (e.g. National Social Economic Survey, and National Labor

Force Survey), and (iii) establishment/ business surveys (e.g. Large & Medium Manufacturing

Statistics, and Horticulture & Estate Crops Statistics). Under these sub-components,

improvement efforts will focus on statistical and survey methodology and processes, operations,

training, and applications and data management systems development.

23. The focus of improvements for each product line will differ, based on assessment results

in the preparation stage. For example, improvements of National Accounts will focus on training

in 2008 System of National Accounts (SNA), improving associated source data, and

8

development of time series database, while improvements of Large and Medium Manufacturing

Statistics will focus on reducing non-response and timelag, and developing e-survey system.

Development of common tools and shared systems that cut across product lines is included in

sub-components A6-8 and component B.

24. Additional cross-cutting improvement areas under this component are: (i) Survey

Management and Methodological Innovations; (ii) Statistical Analysis and Quality Assurance;

and (iii) Dissemination, User Engagement and Communications Strategy. This configuration is

closely aligned with the existing organizational structure of BPS to facilitate the assignment of

implementation responsibilities and monitoring of project performance and outcomes.

25. Component B: Improved ICT Platform and Statistical Information Management

Systems. BPS is increasingly called upon to provide more comprehensive and sophisticated

statistics. Demands and expectations from customers are pressuring BPS to provide more source

information, better access to analysis tools, and more transparency in statistical products. To

deliver on these expectations, BPS needs to overhaul the way it manages data information, as

well as the underlying ICT infrastructure. During project preparation phase, BPS has developed

an integrated Enterprise Architecture (EA) based on an international standard—UNECE‘s

Generic Statistical Business Process Model (GSBPM)—and an Information Systems Governance

framework. Based on the agreed EA, the Project will standardize and centralize IT operations

and resources, moving towards increased used of common tools and methodologies, shared

systems and pooled resources across subject matter units. Under the Project, BPS will develop

an integrated statistical system, with network connectivity to regional offices. This component

will also address HR capacity building issues specific to IT skills and management requirements

for the new environment, such as applications and database development, operations and

maintenance, procurement and contract management.

26. Component C: Improved Human Resources Management and Development. This

component addresses the critical support function of Human Resources Management and

Development, especially in view of impending changes and the need for highly qualified staff to

support the new systems. Capacity of the HR Bureau and its staff needs to be upgraded to

sustain changes induced under the Project, and changes are needed in HR policies to introduce

performance-based management and incentive schemes, and improve areas such as staff

placement, rotation and promotion policies. The Project will also address HR Development

needs, focusing on strengthening training policies, programs and capacity (both transitional and

permanent, career-path oriented training). Training policies and programs should be integral

parts of the larger HR management scheme, and geared towards supporting corporate business

needs and contributing to individual career development. The Project will strengthen the BPS

Education and Training Center (ETC) as the in-service training facility to effectively manage and

provide a full course of essential and relevant management and technical training required by

BPS managers and staff at all levels. The Project will also upgrade the existing HR management

information system (SIMPEG) to be able to provide managers with information required to take

decisions on HR planning and development.

27. Component D: Improved Organizational Alignment. This component will address

institutional framework to ensure that the future BPS organization is ―right-sized‖ and that its

organizational structure and arrangements are strategically aligned with the changes induced by

9

business process reengineering, introduction of new technologies and systems, and new HR

requirements. The Project will also review and redefine the division of roles and functions

between HQ, province and district levels, as well as the organization of regional office units by

theme (e.g. social statistics, economic statistics), or by function (e.g. field data collection, data

processing). Any changes to legal framework (Statistics Law and related government

regulations) that may be necessary as a result of changes will also be addressed. Change

management strategy will also be developed to ensure the acceptance and sustainability of

changes instituted under the Project. Component D now also has an additional sub-component to

improve the Effectiveness of Corporate Governance, which includes work on strengthening the

Internal Control System, the capacity of the Inspectorate to conduct internal audit, and effective

management policies and procedures for taking actions on audits and quality reviews.

28. Component E: Project Management. Two key bodies—Project Steering Committee

(PSC) and Project Management Unit (PMU)—have been established in BPS to manage and

oversee the implementation of the Project. PSC is made up of the highest leadership of BPS and

will be asked to make key decisions on the issues and matters which have strategic significance

for the success of the project. PMU will perform a day-to-day management of project planning

and implementation, including financial management, procurement, and an oversight of

contracting and delivery of project results. Project Operations Manual (POM) is developed and

adopted by BPS during the project preparation phase, and provides detailed guidance regarding

the agreed mechanisms and procedures for managing the Project. BPS will also acquire an

Owner‘s Agent consultant to support this component.

29. Project phasing/sequencing. The Project supports the improvement of statistical quality

through enhanced integration, and the organization of the Project also reflects the integration. To

achieve the project outcomes, the changes and improvements in statistical methodologies and

processes will inform the new requirements for information systems and technology, human

resources and organizational structure. Project design takes into account of the inter-linkages

between the components and activities will be phased and sequenced accordingly.

Table 1: Project Components to Procurement Packaging Comparison

Component Description Procurement

Vehicle

A. Statistical

Quality

Quick Win‘s—technical assistance for strengthening statistical

methodological and analytical capabilities. Statistics

Specialists

Statistical support by providing technical education and analysis to

strengthen statistical quality.

Under each BPS statistical area, the following will be delivered: (1) Formal

Job Descriptions adjusted to the new processes; (2) Standard Operation

Procedures (SOPs); (3) Training on new processes and software tools,

including Lesson Plans and E-learning Modules; (4) Users Manuals; (5)

Software Tools; and (6) Hardware Platforms specific to operating new

optimized process.

ICT Governance and Systems delivery shall be accommodated by a BPS

Statistical Services and Core Statistical Systems Development Contractor

and shall deliver all product line strings / system arrays, right sized to deliver

application systems services to users in accordance with organizational

procedures outlined in the SOP.

Statistical

Services and

Core

Statistical

Systems

Development

Contract

10

Component Description Procurement

Vehicle

B. ICT Platform

and Statistical

Information

Management

Systems

The Network Operations Center and systems help desk facility shall be

delivered as a part of this effort and shall include ICT Systems Maintenance

training to support both help desk services and future maintenance of the

system (should BPS decide they desire to maintain components as opposed

to a service contract).

Data warehouse and database manipulation tools, database licenses shall be

site specific and be capable to handle the number of users identified by Use

Case detailed process specifications and workload analysis efforts.

Since it is not possible to predict what type of appliance users will require,

end user devices shall be specified and purchased by GOI funds.

Network capacity shall be ordered at detailed design and shall be GOI

funded.

Core ICT

System/

Infrastructure

Supply &

Install

Contract

C. Human

Resources

Management and

Development

D.

Organizational

Alignment

Human Resources (HR) Policy shall be required before the Systems Level

Use Case activity begins and coordinated with the Government HR

Apparatus. The HR policy shall define the parameters and boundaries the

GOI will permit BPS and define the coordination mechanism and procedures

to be used during the transformation process.

Optimizing BPS Operations begin with best practice process and specialized

statistical techniques. Process steps will be allocated for human process

development Standard Operation Procedures (Human Steps), Software

Requirements Specifications / Interface Requirements Specifications, or

Hardware specifications for just in time procurement later in the life cycle.

BPS performed a current system analysis in 2009, and has developed the

BPS Analysis Document outlining a new Concept of Future Operation.

Top Level Systems Requirements and Integrated Systems Architectures

based on best practice will be completed in 2010.

These are inputs to development of Systems Level Use Cases.

Organizational issues shall be addressed by defining first what are the

detailed steps needed to implement concept processes outlined in the

aforementioned high level specifications. What is the job (or system use

case actor) needed to implement optimized and greatly detailed process.

Once completed, Systems Level Use Cases can launch an organizational

impact study to develop an organizational impact study and strategy. This

becomes justification for an input to Government Civil Service apparatus for

reorganization of BPS in order to input optimized process.

BPS internal control governance (charter, policy, etc.), and capacity of

Inspectorate to conduct internal audit and control will also be strengthened.

BPS HR /

Organization

Design

Consultancy +

Internal Audit

Consultancy

C. Human

Resources

Management and

Development

D.

Organizational

Alignment

Human Resources Management Information System will be developed that

will: [1] maintain staff records, [2] training performed during the

transformation process, [3] maintain BPS adjusted job descriptions, [4] staff

grade, [5] personnel evaluation records, [6] promotion fitness records, [7]

Rotation record and rotation preference record, [8] personal holiday records,

[9] skill level, [10] professional education records, [11] awards, [12] family

status, [13] special needs and records, [14] property records, [15] duty

location, [16] supervisors of record, [17] service time and [18] total time in

the present grade.

An Internal Audit System will also be developed to support work of the

Inspectorate (case management system).

BPS HRMIS

+ Internal

Audit System

Supply &

Install

Contract

11

Component Description Procurement

Vehicle

E. Project

Management

BPS will employ an Owner‘s Agent to assist with project management and

provide timely advice. There shall be four groups of support activities:

Project Management Specialists to assist BPS in project planning,

monitoring and control. This will include procurement and contract

management support.

Statistical Specialists to assist in development of Use Cases for the

Statistical Applications and Systems/Infrastructure. This group will

provide review services upon BPS Statistical Services Contractor

deliveries of work-products. Also to provide statistical training and

capacity building support as required.

Data Administration and System Engineering Specialists to review ICT

specific deliverables.

Human Resources and Organization Design Specialists to review HR

and OD specific deliverables.

Owner’s

Agent

Consultancy

Supplemental Procurement Support – a specialist with extensive experience

in World Bank procurement. Procurement

Support

Figure 2: Draft Implementation Schedule

12

B. Project Financing

30. Lending Instrument. This Project will be a 5-year Specific Investment Loan (SIL) in

the amount of US$65 million under the umbrella of the multi-country Statistical Capacity

Building Program (STATCAP). STATCAP is a ―horizontal‖ Adaptable Program Loan (APL)

approved by the Executive Board in 2004. Review and consideration of sector issues,

development objectives and scope of proposed project activities indicated that STATCAP would

be an ideal operational instrument for the Bank to support the Government of Indonesia. The

STATCAP-CERDAS project is included in the pipeline of projects slated for delivery during the

current CPS.

31. STATCAP eligibility. The Government of Indonesia has met all the requirements of the

STATCAP eligibility criteria, which are: (i) preparation of a national statistical development

strategy and statistical master plan; (ii) strong national commitment and leadership; (iii)

willingness to comply with good statistical practice; (iv) participation in global development and

monitoring activities; and (v) use of sustainable financial and institutional arrangements. BPS

has prepared a medium-term strategy for statistics for the period of 2010-2014, and the

STATCAP-CERDAS project has strong commitment from the Ministry of Planning (Bappenas),

which has included the project in its 2010-2014 Blue Book (shortlist of projects to be financed

through foreign assistance). Indonesia already subscribes to the IMF‘s Special Data

Dissemination Standard (SDDS) and met its specifications in June 2000, and also participates in

various international efforts, such as the International Comparison Program and MDG

monitoring.

32. Project Cost and Financing

Categories Project

Cost

IBRD

Financing

US$

million

%

Financing

Goods and Non-Consultant Services 70.70 56.56 80%

Consultant Services 7.81 7.81 100%

Training 1.10 0.63 30%

Operating Costs 2.39 0 0%

Total Baseline Costs 83 65 78%

Physical Contingencies

Price Contingencies

Total Project Costs 83 65 78%

Interest During Implementation

Front-End Fees

Total Financing Required

13

C. Lessons Learned and Reflected in the Project Design

33. Since the Project Concept Note review, extensive diagnostics and analyses under each of

the components have been conducted to inform the Project Design. BPS, the Bank—Poverty

Reduction and Economic Management (PREM) Indonesia and Development Data Group

(DECDG)—and external consultants, including experts from other National Statistics Offices,

have conducted reviews of statistical methodology for each product line, as well as analysis of

common issues across product lines, ICT and HR areas. BPS has also contracted a consultant

firm to take the analysis results to prepare reengineering plans and technical requirements. As a

result, the Project now has an expanded emphasis on integration and cross-cutting issues, as well

as corporate governance, human resources policy and organizational alignment issues.

34. One of the most important lessons learned from global STATCAP experience from other

countries and also from experience of past donor assistance in BPS is the need for taking a

systematic and comprehensive approach to building statistical capacity instead of piecemeal

approach. Unlike many other cases of international technical cooperation, the global STATCAP

approach asks the recipient countries first to take stock of their statistical activities and to

prioritize the actions to strengthen statistical capacity in the form of the national strategy for

development of statistics (NSDS) and/or the statistical master plan (SMP). For instance, BPS

has developed a strategic plan for improvement by product lines and had the project owners to

signal their commitment to improving the quality of statistics with signatures of pledge in the

strategic plan.

35. Past donor assistance to BPS, including the Bank‘s, has also focused primarily on

―technical‖ issues, without dealing with the institutional support aspects of human resources and

organization. Many technical assistance and pilot projects have not made sustainable impacts,

due to factors such as rotation of trained staff, lack of budget to continue or scale up pilot results.

The STATCAP-CERDAS project takes an institutional development approach, seeking to

address not only the ―technical‖ constraints, but institutional ones as well, looking at structural

issues, such as ICT/information systems governance, human resources policies, incentive

schemes and organizational culture.

36. The STATCAP-CERDAS project design also incorporates lessons learned from other

public sector reform projects with large and complex ICT components, such as the GFMRAP

and PINTAR, to focus additional attention on project management capacity of the Implementing

Agency. Even with a full-time Project Management Unit (PMU), additional support for project

management is often necessary to ensure timely implementation and strong integration between

components, particularly as BPS is not accustomed to managing and coordinating numerous

large external consultants and contractors, as well as internal implementing units spread across

the organization. In some projects, an Independent Verification and Validation (IV&V) services

was used, while others used a more substantial support to the Implementing Agency for Project

Management and Quality Assurance (PMQA). BPS intends to acquire an ―Owner‘s Agent‖

services to which will provide more of a PMQA support to augment and develop its project

management capacity, and assist with quality assurance of processes and outputs, as well as with

integration of various project components.

14

D. Alternatives Considered and Reasons for Rejection

37. There were other project design alternatives which have been considered but rejected in

favor of the current project design.

38. First, the project team considered whether the Project should cover the wider National

Statistics System (NSS), including not only BPS but also the statistics units of sector line

ministries, and possibly those of the local governments. Lack of coherence and uniformity in

collection of sector statistics across decentralized units of government poses a serious challenge

for meeting information needs for policy making and service delivery. The absence of adequate

regulatory structure to enforce the norms and mechanisms for collection of sector statistics

implies that inclusion of sector line ministries and local governments will be a costly and risky

undertaking. Therefore, the Project will focus on providing support for BPS to improve basic

statistics which are the foundation of high-quality official statistics. Given the highly centralized

nature of the Indonesian NSS, improvement in BPS capacity and credibility will also have

positive impact on the NSS as a whole.

39. A second alternative considered and rejected was a project of a smaller size. As

mentioned in the section on lessons learned, BPS has a long history of technical cooperation with

donor agencies and/or other statistical agencies. A smaller project means that the scope of the

project would not have been comprehensive, and choices will have to be made in inclusion and

exclusion of certain project components and budget allocation for certain components will not be

sufficient to achieve project development objectives.

IV. IMPLEMENTATION

A. Institutional and implementation arrangements

40. Implementation arrangements include the following:

(a) An External Project Advisory Board consisting of representatives from BPS, MOF,

Bappenas, Bank Indonesia, the Bank and selected key stakeholders, such as the Statistical

Council (FMS) and universities, will be established to provide strategic guidance on

project implementation. The Project Advisory Board shall meet bi-annually to formally

monitor project progress, outputs, outcomes and impacts.

(b) A high level Project Steering Committee chaired by the Chief Statistician, has been

established to ensure the strategic decisions, progress and drive issues that affects other

directorates in BPS, and problem solve project related matters. The Steering Committee

will meet monthly and will consist of all Echelon I Senior Executives of BPS. The

Steering Committee is also responsible for resolving any issues involving coordination

across the agency, or with other agencies, or responding to feedback from key users.

Responsibility for each component of STATCAP-CERDAS project: 1) Statistical

Quality, 2) Information Communication and Technology, 3) Human Resources

Development, and 4) Institutional Arrangements has been delegated to an Echelon I

Senior Executive by the Chief Statistician. The four Echelon I Senior Executives are

15

responsible for ensuring the implementation progress of the Project components and

being a champion for that strategic area. They report directly to the Chief Statistician.

(c) User Groups/ Technical Advisory Groups. Under Project sub-component A8, BPS

will also establish User Groups or Technical Advisory Groups for key statistics to foster

improved communication with data users. How frequently these groups will meet

depends on the product line—for example, national accounts group may meet quarterly,

just after the release of quarterly GDP statistics.

(d) A full-time Project Management Unit (PMU) for the STATCAP-CERDAS project

was established in September 2008 to coordinate project preparation and implementation.

However, this PMU is expected to be expanded to include the new integrated statistical

functions and project implementation monitoring and control roles, and become a

Directorate of Statistical Integration and Transformation (DoSIT). This Directorate

will be a new structural unit headed by an Echelon II official and supported by full time

structural and functional staff, and will be responsible for day-to-day management and

administration of project implementation. The Directorate will also be responsible for

the integration and cross-cutting issues of the STATCAP-CERDAS project, and

implementation monitoring and control of the project. The Directorate will be

responsible for: 1) statistical integration; 2) ICT management; 3) strategic HR

development; 4) Project management and corporate change management; 5) Project

implementation management and procurement support; 6) Project monitoring and

control; and 7) coordination with the relevant units of BPS, including the planning and

finance bureaus, and procurement committees.

This Directorate will also oversee the implementation of the BPS Bureaucracy Reform

Roadmap, and it is important that it will be staffed by those who have credibility within

the organization as ―change agents‖, and can serve as ―role models‖ of reform.

(e) Financial Management and Procurement will be undertaken jointly between the

PMU and the relevant units, such as the Program Development Bureau (planning and

budgeting) and the Finance Bureau. Staff from PMU also serve in the Procurement

Committees. Staff from budget and finance units are assigned to manage project-related

issues, and will be provided with targeted and ongoing training throughout the project by

World Bank financial management and procurement specialists.

(f) Donor Coordination will also be undertaken by the new Directorate to ensure donor

support to BPS is directed towards the strategic priorities identified by the Executive

Management Team (Echelon I officials).

41. Change Management. Embedded within each of the components of the Project is new

ways of doing business and changes of organizational culture. There is strong emphasis on the

soft skills, such as communication, collaboration and integration which will require significant

change management. For example, components A and B will require training and development

of new skills to adopt the new business processes and use of new ICT applications. Although

institutional reform is a long-term objective, short-term successes are essential for gaining

credibility of the reform and maintain momentum. Like any major reform and transformation

16

project, resistance is unavoidable and often in change management paradigm, friction is

necessary to effect change. Managing the resistance and frictions becomes the key to

successfully managing the change process. Some of the resistance will be more of a personal

nature, while the benefits of the reform will be a ―collective‖ outcome, not just for BPS but the

country as a whole. Understanding the political economy of reform has been integrated into

project preparation.

42. Owner’s Agent (OA) services. As mentioned in the previous section, BPS will also

acquire an Owner‘s Agent to provide support services for the duration of the Project, in

monitoring and controlling project implementation process, quality assurance, change control,

database development, organizational change management, statistical product line integration,

procurement, financial management, testing and evaluation of contract deliverables before

acceptance, and risk management and mitigation. Early OA tasking is expected to include:

assisting in the bid evaluation process, monitoring critical project schedule and budget

compliance, ensuring compliance with quality standards outlined in the Project Operations

Manual (POM), and reviewing contractors' applications for payments.

43. A detailed outline of implementation arrangements is included in Annex 3.

B. Results Monitoring and Evaluation

44. Project progress reports by activity within components compared to budget and timeline

will be prepared by the PMU. A dedicated website for the Project has been established on the

BPS public website (http://statcapcerdas.bps.go.id) and will provide information on reform

progress to increase transparency. An annual project report will be issued and posted in the

website. A detailed description of the monitoring mechanisms and arrangements will be

included in the POM chapter on implementation arrangements.

C. Sustainability

45. The Government of Indonesia has expressed its commitments to sustain development

outcomes of the STATCAP-CERDAS project by fully integrating it in the national development

planning process. The medium-term statistical development plan is a mandate for the BPS to

submit as input to Indonesia‘s national development plan. With this, BPS has demonstrated its

commitment to improving the quality of statistics over the long-term. The Strategic Plan for

Change and Reform for the Development of Statistics (CERDAS Plan) also forms the core of the

BPS Bureaucracy Reform Strategy, which will be implemented and monitored under the

government-wide Bureaucracy Reform program.

46. During project preparation, BPS has secured sufficient counterpart funding for the Project

through GOI‘s medium-term budget appropriation process, which will be sustained during

project implementation. BPS has also signaled its intention to upgrade the Project Management

Unit (PMU) that has already been established during the preparation phase to a Directorate for

Statistical Integration and Transformation, which will exist beyond the project lifetime to

oversee strategic change and reform, and to ensure continuous improvement process is

institutionalized. The Project also focuses on investing in development of tools and systems, and

does not fund routine or new survey operations, which are financed by GOI budget. Recurring

17

costs for operations and maintenance will be considered during systems development phase, and

will be discussed during implementation to ensure allocation in future GOI budget plans.

V. KEY RISKS AND MITIGATION MEASURES

47. The overall project risks are rated Medium Driven by Impact (MI). The main risks

identified are related to the Implementing Agency‘s capacity and governance, including: low

capacity to manage complex ICT procurement and contracts; weak internal control mechanisms

to ensure implementation and enforcement of new rules, policies and Standard Operating

Procedures (SOPs); and capacity to manage culture change from ―silo‖ to ―corporate‖ culture.

48. Potential risks are summarized in the Operational Risk Assessment Framework (see

Annex 4). Risks identified are manageable and mitigation measures are in place.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

49. Economic analysis: The Project is not amenable to a cost-benefit analysis as the

principal benefits from the Project are either intangible or qualitative. Economic benefits from

the project will derive mainly from three sources. First, improvements in effectiveness and

efficiency of statistical operations and agencies will result in broader coverage of high-quality

data for the same level of public expenditure. Second, better data will enhance the potential for

evidence-based decision making at policy, program and project levels. Third, the Project will

help address the problems of under-coverage of source data and enhance the accuracy and

significance of statistical indicators. As such, the project does not lend itself easily to standard

cost-benefit analysis. However, the public goods nature of the national statistics provides a

strong rationale for public financing in the production and dissemination of the statistics, and

hence the Bank‘s support with the STATCAP-CERDAS project.

50. Financial analysis: National statistics are a public good and generally financed from tax

revenue. There is only very limited potential for cost recovery, mainly through data

dissemination, including sale of publications and producing ―non-standard‖ reports that require

additional human and other resources. Especially with the demand to make more data and

publications and datasets accessible electronically as a norm, there will also be move away from

charging fees. Therefore, only marginal financial returns are expected from this project.

However, there can be a fiscal impact contributing to a better budgeting process and a potential

increase in revenues due to better information and coverage, as well as a possible increase in

recurrent costs to cover enhanced operations of the national statistics office.

B. Technical

51. The technical design of the project is based on a detailed analysis of the strengths and

weaknesses of BPS‘s current methodologies and business processes. The proposed

developments in management of statistical agencies, statistical infrastructure, and statistical

operations and the choice of technology are appropriate to the Borrower‘s needs and capabilities,

as well as international good practice and standards. The specifications for ICT systems and

18

equipment will be reviewed by technical specialists and will be in line with the World Bank

procurement practices and local requirements.

C. Financial Management

52. The financial management assessment has been conducted by the Bank and actions to

strengthen BPS‘s financial management capacity have been agreed upon with BPS. The

assessment concludes that with the implementation of the agreed actions, the proposed financial

management arrangements will satisfy the Bank‘s minimum requirements under OP/BP 10.02.

53. Based from previous project experience, risks may arise from: (1) lack of coordination

among the PMU, Satker and other relevant units to the project within BPS, adding to the issues

of project‘s unfamiliarity with the Bank‘s procurement guidelines and the country process related

to donor funds; and (2) BPS has not submitted project financial report on regular basis due to

lack of capacity in preparing financial reporting as required by the Bank. Other than these, there

may be issues since this will be one of the first projects to be audited by the State Audit Board

(BPK).

54. BPS staff has been provided with targeted training on financial management and

disbursement prior to loan negotiations, which also included sessions on country systems related

to donor funds, in particular related to treasury and budgeting system. Special purpose financial

reports (Interim Financial Report) will be requested for this operation on a quarterly basis to

facilitate monitoring. The project financial report will be subject to annual financial audit by

BPK. This project will also be included in the BPS Inspectorate‘s internal audit annual plan.

The Bank will have separate meetings with BPK to discuss on the audit arrangement.

55. Annex 3 provides additional information on financial management implementation

arrangement. The detailed financial management capacity assessment and arrangements are

available in the project files.

D. Procurement

56. Procurement will be carried out in accordance with the World Bank‘s ―Guidelines:

Procurement under IBRD Loans and IDA Credits‖ dated May 2004, revised October 2006 and

May 2010; and ―Guidelines: Selection and Employment of Consultants by World Bank

Borrowers‖ dated May 2004 revised October 2006 and May 2010, and the provisions stipulated

in the Loan Agreement. The procurement procedures and standard bidding documents to be

used for each procurement method will be included in the Project Operations Manual (POM)

Volume I, Section 4.

57. The draft procurement arrangements under the project indicate one non-consulting

services contract, two information systems (IS) supply and installation contracts, and three

technical assistance (TA) contracts. The main non-consulting services package will be the

Statistical Services and Core Statistical Systems Development (US$32.6 million), for which the

bidding documents will be ready by April 2011. The two IS packages are the Core ICT

System/Infrastructure (US$30 million), which will be ready by April 2011, and the Human

Resources Management Information System and Internal Audit System (US$8.1 million), which

will be prepared in year two of the project. The TA packages are for: (i) HR and Organization

19

Design (US$2.3 million); and (ii) Internal Audit (US$1.6 million), which should be launched in

August 2011. The TA for the Owner‘s Agent (US$3.6 million) is very critical for the

implementation of the project and the request for expressions of interest should be issued within

60 days of project effectiveness.

58. The procurement capacity assessment for BPS shows that it has the basic capacity to

carry out procurement activities related to the proposed project. BPS has experience under a

PHRD project financed by the Bank in which it carried the selection of a large TA. However,

the project will consist of procurement of high value contracts for Information Technology, as

well as large contracts for consulting firms. Both of these procurements may experience

significant delays as evidenced in other projects. This will be addressed through providing

outsourced support to the procurement committee (current TA under PHRD project, Procurement

Specialist, and Owner‘s Agent), as well as training by the Bank.

59. Based on the above, the procurement risk is set as ―high‖. Risk mitigation measures have

been discussed with BPS and agreed. A brief summary of the procurement capacity assessment

and project procurement arrangements are provided in Annex 3. More details are available in the

project files.

E. Social

60. It is expected that improved national statistical system will lead to improved social

services delivery to the population, in particular to the poor in such areas as health, education,

social assistance and protection. The project will help improve statistics required to support

evidence-based decision making in the determining government social policies and expenditures.

Improved gender disaggregated statistics will also support the government‘s efforts for gender

mainstreaming in planning and budgeting, as well as monitoring and evaluation of policy and

program impacts by gender.

F. Environment

61. The Project has been assigned Category C, as no adverse environmental impacts are

expected. The Project will not be financing any constructions/civil works, but it will provide

server and network equipment to enable organizational connectivity, and shared application

systems and database access. ―Software‖ will be the major focus of the Project, but limited

quantity of ―hardware‖ will also be provided to accommodate and support this development.

The equipment financed through the Project will be investing in new systems to augment, rather

than replace, existing ICT infrastructure and equipment in BPS.

G. Other Safeguards Policies Triggered

62. There are no other safeguards policies triggered for this Project.

20

Annex 1: Results Framework and Monitoring

INDONESIA: Statistical Capacity Building-Change and Reform for the Development of Statistics (STATCAP-CERDAS)

Results Framework

Project Development Objective (PDO): To increase the effectiveness and efficiency of the Indonesian National Statistics Office (BPS-Statistics Indonesia) to produce and disseminate reliable and timely statistics in accordance with international standards and best practices, and to be responsive to user needs.

PDO Level Results Indicators

Co

re

Unit of Measure

Baseline

Cumulative Target Values Frequen-

cy

Data Source/

Methodolo-gy

Responsi-bility for

Data Collection

Description (indicator definition

etc.) YR 1 YR 2 YR 3 YR 4 YR 5

Accuracy. Demonstrable improvement in the accuracy of key statistics, as evidenced by: (a) a reduction in the statistical discrepancy between the quarterly and annual production and expenditure estimates of growth in the national accounts

% >2% Implementation strategy for improving source data

Supply-Use Table

IT system, including management of time series; I-O Table

<2% <1% Annual Quarterly reports by National Accounts Directorates

BPS (STATCAP-CERDAS PMU)

Statistical discrepancy as % of GDP

(b) an increase in the response rate of the Annual Survey of large and manufacturing businesses

% 65% - - 83% - - Annual Annual report on progress to STATCAP-CERDAS Project Steering Committee (PSC)

Idem Response rate as determined and verified by Methodology Directorate

(c) an increase in the user satisfaction with the accuracy of BPS statistics, including the extent of revisions

% (i) 43% of users

satisfied with accuracy; (ii) 32%

satisfied with revisions

User segmentation to develop a communication strategy tailored to user groups; Key user groups established

Development of communication strategy; Introduction of timetable for release of publications; Protocol for the release of micro data

(i) 50%; (ii) 50%

(i) 60%; (ii) 60%

(i) 75%; (ii) 65%

Annual BPS User Satisfaction Survey (USS)

Idem User satisfaction rate based on independent survey

Relevance. Availability of important new statistics, as evidenced by establishment of:

(a) the introduction of the 2008 version of the System of National Accounts

- Not available Agreed priorities on accounts within SNA 2008; Implementation strategy including

Supply-Use Table

Conversion of Production and Sectoral Accounts to SNA 2008; Institutional

Capital Account

Financial Account

Quarterly Quarterly Reports by National Accounts Directorates

BPS (STATCAP-CERDAS PMU)

Publication of the relevant accounts using SNA 2008

21

source data requirements; Training of staff in SNA 2008

Sector Account; Availability of IT system

(b) a national producer price index

- PPI available for

agricultural sector,

excluding forestry sub-

sector

Availability of staff with required skills; Study of non-agricultural PPI and integration among manufacturing indexes for production, wages, production prices

Availability of IT system; National PPI available, including manufacturing, energy and mining sectors

National PPI available for all possible sectors, and PPI available for 50% of provinces

PPI available for all provinces and 20% of large districts

PPI available for all provinces and most large districts

Annual Annual report on progress to STATCAP-CERDAS PSC

Idem Availability of relevant PPIs

(c) quarterly labor force survey #/year Bi-annual Quarterly Quarterly Quarterly Quarterly Quarterly Annual Idem Idem

Timeliness. Improvements in the timeliness of key statistics as evidenced by:

(a) reducing the time lag in the production of preliminary and final imports and exports data

# days (i) Preliminary:

30 days; (ii) Final: 60

days

- Agreement & application of a standardized customs form; Re-engineered IT system

(i) Preliminary: 25 days; (ii) Final: 55 days

(i) Preliminary: 20 days; (ii) Final: 45 days

- Annual Annual report on progress to STATCAP-CERDAS PSC

BPS (STATCAP-CERDAS PMU)

Time between collection and publication

(b) reducing the time lag in the publication of final figures from SUSENAS

# months 6 months - - Pilot test of CAPI in Java

Extend CAPI to other Provinces

3 months Annual Idem Idem Time between collection and publication

(c) reducing the time lag in the publication of annual labor force estimates

# days 150 days - 135 days 90 days 60 days - Annual Idem Idem Time between collection and publication

Accessibility. An improvement in the accessibility of BPS statistics as evidenced by: (a) A dynamic up-to-date web site

(i) # total

visitors/ month;

(i) 60,000; (ii) TBD

Installing required technology & obtaining

20% increase in hits on base

40% increase

60% increase

80% increase

Annual Web-count BPS (STATCAP-CERDAS PMU)

Increased web usage (in line with increased/

22

(ii) # unique visitors/ month

staff with expertise in website development

improved web content)

(b) an increase in the user satisfaction with the accessibility of BPS statistics

% 61% of users satisfied with accessibility

of BPS statistics

User segmentation to develop a communication strategy tailored to user groups; Key user groups established

Development of communication strategy; Introduction of timetable for release of publications; Protocol for the release of micro data

70% 75% 80% Annual BPS USS Idem User satisfaction rate based on independent survey

Coherence. An improvement in the coherence of BPS statistics as evidenced by:

(a) a reduction in the discrepancy between the sum of the Provincial estimates of GDRP and the GDP for Indonesia

% TBD Implementation strategy for improved source data

Standard Operating Procedures (SOPs) for Provincial offices

One-third of target met

Two-thirds of target met

Target met Annual Quarterly reports by National Accounts Directorate

BPS (STATCAP-CERDAS PMU)

Interpretability. An improvement in the interpretability of BPS statistics as evidenced by: (a) an increase in the statistics produced by BPS, especially widely used statistics (e.g. national accounts, prices, labor and SUSENAS), that have supporting meta data that describes the concepts, data sources and statistical methods that have been used

# statistics

for which meta

data is produce

d

No statistics with fully

documented meta data

Determine the initial set of statistics to be documented; Develop templates for documentation

- Meta data available for foreign trade, manufacturing and SAKERNAS

Meta data available for prices, agriculture and SUSENAS

Meta data available for national accounts

Annual Annual report on progress to STATCAP-CERDAS PSC

BPS (STATCAP-CERDAS PMU)

(b) the availability of seasonally adjusted monthly and quarterly statistics

# series No seasonally adjusted

series published

Training of relevant BPS staff in seasonal adjustment

Development of seasonal adjustment system; Preparation of model series

Publication of experimental seasonally adjusted series on national accounts and international trade for public comment

Publication of seasonally adjusted series on national accounts and international trade

Publication of seasonally adjusted data for all appropriate sub-annual series

Annual Idem Idem

23

INTERMEDIATE RESULTS

Intermediate Result (Component A: Statistical Quality):

Intermediate Result indicator One: User groups and technical advisory groups are established

# groups No groups are in

existence

Decide which groups are to be formed and their broad TOR

Establish groups relevant to STATCAP-CERDAS (Macroeconomic Stats, Labor, Agriculture, Socio-economic stats)

- Review of their effectiveness

Establish additional groups as appropriate

Annual Annual report on progress to STATCAP-CERDAS PSC

BPS (STATCAP-CERDAS PMU)

Intermediate Result indicator Two: The successful implementation of a Quality Assurance Framework across BPS

- No corporate quality

assurance policy or program

Translation of Quality Assurance Framework (QAF) into Bahasa Indonesia; QAF promulgated; Quality governance structure established and effective; Quality awareness training program developed and delivered in HQ

Quality awareness training program delivered in regional offices; Quality guidelines promulgated; Pilot studies of the application of the QAF; Self-assessment program designed and delivered

Quality targets are set and monitored; Quality guidelines promulgated; Rotating comprehensive quality assessment program designed and delivered; Comprehensive assessment of three major surveys conducted

Comprehensive assessment of three further major surveys conducted

Quality assurance program established and effective

Bi-annual Bi-annual self reports to STATCAP-CERDAS PSC; Annual assessment of QAF implementation progress by the Principle Inspectorate

Idem

Intermediate Result indicator Three: The establishment of a Common Business Register (BR) and a Large Business Unit (LBU)

- Not available Road map for Business Register prepared and agreed

BR and LBU development or acquisition strategy in place and resources allocated; MOU for access to tax data

Prototype BR system available; Draft SOP available

BR and LBU operational

Review of effectiveness of BR maintenance strategy

Annual Annual report on progress to STATCAP-CERDAS PSC

Idem Availability of an effective Business Register

24

Intermediate Result indicator Four: A significant upgrade in the source data used in the compilation of the National Accounts

- Existing data source

Agreement on the most important source data improvements

Approved plan for introducing source data improvements

- Business Register used to support business collections

Introduction of Economy wide survey to support the national accounts

Annual Idem Idem List of actual improvement with quantitative assessment of the extent of improvements

Intermediate Result indicator Five: Availability of an integrated data and information service system supported by the data warehouse

- Not available An agreed systems architecture for dissemination

Subject Matter Areas have developed dissemination plans

Technology and supporting systems are available

Prototype is available; Standard Operating Procedures (SOPs) are developed

Available Annual Idem Idem

Intermediate Result (Component B: ICT Platform and Statistical Information Management Systems):

Intermediate Result indicator One: Improvement in common ICT infrastructure and its performance

- (i) A modern common ICT infrastructure

does not exist;

(ii) Service level

standards do not exist

(i) Agreement to ICT Enterprise Architecture; (ii) Service level standards and processes established

(i) Core applications software in place; Server and systems to provide test environment for applications systems in place; (ii) 40% of service level standards are met

(i) Data warehouse operational; Key elements of ICT operations center in place; ICT Model Office established; Shared data systems in place; (ii) 60% of service level standards are met

(i) All key elements of common ICT infrastructure in place; (ii) 80% of service level standards are met

(i) -; (ii) 90% of service level standards are met

Annual (i) Annual assessment of progress by the Principal Inspectorate; (ii) Performance data compiled by Stats Info System Directorate

BPS (STATCAP-CERDAS PMU)

Intermediate Result indicator Two: ICT standardization (ICT governance, ICT architecture, ICT procurement, applications development methodology, version management of applications and software, systems testing, standard tools and support)

- Not available ICT Management Committee operational; Agreement to ICT Enterprise Architecture

Applications development methodology available; Version management of applications and software; Server and systems to

All standards available

Training in the application of the standards

All standards available and routinely used as part of ―business as usual‖

Annual Annual assessment of progress by the Principal Inspectorate

Idem

25

provide test environment for applications systems in place; Standards and tools

Intermediate Result indicator Three: Improved availability of suitably qualified ICT experts

# ICT experts

40 ICT experts

60 ICT experts

90 ICT experts

120 ICT experts

160 ICT experts

200 ICT experts

Annual Annual report by the Statistical Information Systems Directorate

Idem

Intermediate Result (Component C: Human Resources Management and Development):

Intermediate Result indicator One: A workforce that is aligned with BPS‘s future strategic direction

- Focus of recruitment is on filling

vacant positions

Identify the competencies require for the future BPS

Develop a Competency Framework for BPS; Document the capabilities of existing staff, especially STIS graduates

Undertake a gap analysis between the current arrangements and the future workforce needs of BPS; Populate the HR data on the personnel database

Action plan for addressing the main workforce gaps

A workforce that is aligned with BPS‘s strategic direction

Annual Annual report on progress by the Principal Inspectorate

BPS (STATCAP-CERDAS PMU)

Intermediate Result indicator Two: The successful implementation of an integrated HRM System

- A legacy HRM system

that only performs

some of the required functions

Decide on strategy for upgrading existing HRM system; Determine HRM information that is needed to implement and support HR policies; Specifications for HRM system; Determine HR policies that need to

One-third of HR policies are revised

HRM system developed and tested; Two-thirds of HR policies are revised

Data migration to HRM system; All HR policies are revised

A fully effective HRM system to support BPS‘s HR policies and practices is in place

Annual Annual report on progress to STATCAP-CERDAS PSC

Idem

26

be revised and a strategy for revising them

Intermediate Result indicator Three: An effective performance management system for BPS

- A performance system that

does not provide

sufficient incentive for

improved performance

Develop performance management policy and procedures to support and outcome/output focus to BPS work; Develop a code of conduct for BPS staff

Build the system and pilot test in selected areas

Introduce performance management system across BPS; Determine how reward/compensation might be linked to performance management system; Develop KPIs for BPS work areas

Improve performance management system based on initial experience

An effective performance management system for BPS

Annual Annual report on progress by the Principal Inspectorate

Idem

Intermediate Result (Component D: Organizational Alignment): Intermediate Result indicator One: Improved alignment of thee BPS organization and the future work environment

- An organization design that re-enforces

the stovepipe arrangements that currently exist within

BPS

Identify the competencies require for the future BPS

Develop a Competency Framework for BPS; Develop an organizational design capability within BPS

Undertake a gap analysis between the current arrangements and the future needs of BPS; Populate the HR data on the personnel database

Action plan for addressing the main gaps

An organization design that is well aligned with the BPS‘s strategic direction

Annual Annual report on progress by the Principal Inspectorate

BPS (STATCAP-CERDAS PMU)

Intermediate Result indicator Two: BPS functions in accordance with agreed corporate values

- BPS Corporate

Values have been agreed

Development of communication strategy for promulgating corporate values

Delivery of communication strategy; Survey staff to understand the extent to which BPS staff are influencing by corporate

Development of communication strategy to address any issues identified by the first survey

Further survey of staff to understand the extent to which BPS staff are influenced by corporate values; BPS values are

- Annual Two-yearly survey of staff

Idem

27

values understood by BPS staff and influence the way they work on a day to day basis

Intermediate Result indicator Three: Development of a new monitoring and inspection system

- Principal Inspectorate exists but is

not fully effective

Establish the procedures and governance arrangements for the Principal Inspectorate; Training in modern internal audit procedures

Annual progress reports on designated CERDAS projects

Annual progress reports on designated CERDAS projects

Annual progress reports on designated CERDAS projects; Two completed internal audits

Annual progress reports on designated CERDAS projects; Four completed internal audits

Annual Annual report on progress to STATCAP-CERDAS PSC

Idem

Intermediate Result indicator Four: Effective responses to reviews, audits and coherency studies

- There is no management response to most studies of this type

Establish policies and procedures for responding to reports

Agreed policies and procedures are in place

- Compliance with agreed policies and procedures

- Annual Annual report by the Principal Inspectorate

Idem

Intermediate Result (Component E: Project Management): Intermediate Result indicator One: Effective project management

- No corporately

agreed project

management system

Agreement to software to support BPS project management system; Development of a BPS project management system; Development of a training program in project management; Development of a

Training of 50% of BPS managers in project management; Application of formal project management of all CERDAS projects

Training of 100% of BPS managers in project management

Roll-out of project management throughout BPS

Review of the application of the BPS Project Management System

Annual Annual report on progress by the Principal Inspectorate

BPS (STATCAP-CERDAS PMU)

28

CERDAS Risk Management Strategy

Intermediate Result indicator Two: Procurement carried out in timely and transparent manner

# days Not applicable

5 days 5 days 5 days 5 days 5 days Annual Project Reports, STATCAP-CERDAS project website

Idem Date documents uploaded on project website for relevant procurement action

Note: Baseline values will be established by project negotiations. Targets, where not yet defined, will be established subsequently.

29

Annex 2: Detailed Project Description

INDONESIA: Statistical Capacity Building-Change and Reform for the Development of

Statistics (STATCAP-CERDAS)

1. The STATCAP-CERDAS project supports fundamental reforms and change efforts in data

collection, processing and compiling in BPS to improve the quality of statistics. STATCAP-

CERDAS project was designed through a strategic planning process to support the improvements

of core statistical product lines which BPS senior management has endorsed. The scope of

project activities under specific project components have been defined based on assessment of

current business processes and systems carried out by BPS, the Bank and expert statistical

consultants. The project will have five components: (A) Improved Statistical Quality; (B)

Improved ICT Platform and Statistical Information Management Systems; (C) Improved Human

Resources Management and Development; (D) Improved Organizational Alignment, and; (E)

Project Management, as shown in Figure 1 below.

Figure 1: The Framework of STATCAP-CERDAS Project Design

A. Statistical Quality

E. Project

Management

--

E.1

Project

Governance

--

E.2

Monitoring &

Evaluation

--

E.3

Project

Management

--

E.4

Project

Administration

Outcome Indicators

Improved Quality

Accuracy

Relevance

Timeliness

Accessibility

Coherence

Interpretability

A.1

National

Accounts

A.2

International

Trade

Statistics

A.3

Production Statistics

A.4

Price

Statistics

A.5

Poverty and Labor Statistics

A.3a Large &

Medium

Manufacturing

Statistics

A.3b

Horticulture

& Estate

Crops

Statistics

A.5a Social

Economic

Survey

(SUSENAS)

A.5b Labor

Force Survey

(SAKERNAS)

A.6 Survey Management, and Methodological Innovations

A.7 Statistical Analysis and Quality Assurance

A.8 Dissemination, User engagement and Communications Strategy

B. ICT Platform and Statistical Information Management Systems

B.1 Data Warehouse Development and Network Improvements [Network, Hardware, Database Platform, Data

Warehouse]

B.2 ICT Standardization [ICT architecture, procedures, hardware and software]

B.3 Corporate Information Systems Management [ICT Infrastructure Mgt, ICT Contract Mgt, ICT Mgt

Committee]

B.4 IT organization and human resources [management and training of IT staff]

C. Human Resources Management and Development

C.1 Effectiveness of HR Principles and Policies

C.2 Effectiveness of HR training and development, including Education and Training Center

C.3 Develop HR Information System

D. Organizational Alignment

D.1 Alignment of Organizational Structure [Institutional Framework]

D.2 Alignment of Corporate Culture [Change Management]

D.3 Effective Corporate Governance [Internal Control System]

2. Technical assistance from a number of development partners and other national statistics

offices has assisted BPS to develop and identify the reform initiatives and outcomes in the 2010-

2014 CERDAS Strategic Plan. In addition, donor assistance is coordinated to strengthen BPS

capacity in preparing diagnostics in technical programs, ICT capabilities, and the development of

skills and capabilities of the human resources in BPS. The reform initiatives outlined in the

30

2010-2014 CERDAS Strategic Plan was signed and approved by BPS Executive in 2009 and this

has been shaping the design and development of the STATCAP-CERDAS project. This is a

change from previous support provided by development partners to BPS which has mostly been

short-term and more a ‗piece-meal‘ approach. Following the approval of the BPS 2010-2014

CERDAS Strategic Plan, BPS has prepared a more detailed document in 2010, called the BPS

Modernization Proposal which describes more specifically the improvements and outcomes that

BPS is seeking from each of the components of the STATCAP-CERDAS project. In June 2010,

BPS contracted a consultant firm, Ernst and Young Advisory Services Indonesia, who is

translating the BPS Modernization Proposal into technical requirements and specifications for

bidding documents, and an Implementation Plan.

3. Business process analysis (BPA) was completed in 2009 and used as the principal tool for

mapping out the existing business processes within selected product lines and identifying

bottlenecks to statistical quality, in terms of accuracy, reliability, timely availability and user

confidence. This analysis has identified the most important elements for the cross-cutting

improvements, including: (i) improvements in methodologies; (ii) training activities; (iii)

strengthening of internal quality assurance system; and (iv) improvements in user engagement

and dissemination. Assessment of ICT practices and systems has identified need for stronger

governance and management, as well potential for use of common tools and shared systems.

Through the Project, investments will also be made in improving the underlying institutional

―backbones‖ i.e. information systems, human resources and organizational structure. In the

following component descriptions, some of the problems and improvements sought from the

project are described.

4. Project phasing/sequencing. The Project supports the improvement of statistical quality

through enhanced integration, and the organization of the Project also reflects the integration. To

achieve the project outcomes, the changes and improvements in statistical methodologies and

processes will inform the new requirements for information systems and technology, human

resources and organizational structure. Project design takes into account of the inter-linkages

between the components and activities will be phased and sequenced accordingly.

5. Component A: Improved Statistical Quality. Improvement of Statistical Quality is a

major component of STATCAP-CERDAS project. Component A includes the strengthening of

Data Collections and Processing, and Statistical Methodology for selected priority product lines.

BPS conducts over 20 scheduled data collections, ranging in periodicity from monthly, such as

the price data collection, to every 10 years, such as the three censuses (i.e. population, agriculture

and economic censuses). Through the Project, these systems will be improved to detect and

process errors more efficiently, integrate better to eliminate duplication and increase inter-

operability of data and systems, and provide reliable and timely statistical products.

6. Sub-components A1-A5 corresponds to the priority statistical products selected by BPS:

National Accounts; International Trade Statistics; Production Statistics (Industry & Agriculture

Statistics); Price Statistics; and Poverty and Labor Statistics. These product lines were selected

on the basis of user demand, and also to represent the various data collection types in BPS, i.e. (i)

compilation of administrative data (e.g. export-import statistics), (ii) household surveys (e.g.

National Social Economic Survey, and National Labor Force Survey), and (iii) establishment/

business surveys (e.g. Large & Medium Manufacturing Statistics, and Horticulture & Estate

31

Crops Statistics). Under these sub-components, improvement efforts for each product line will

focus on statistical and survey methodology, operations, training, and applications and data

management systems development.

7. The focus of improvements for each product line will be somewhat different, based on

assessment results completed during the project preparation stage. For example, improvements

of national accounts will focus on adoption of up-to-date System of National Accounts (SNA),

improving associated source data, and development of time series database, while improvements

of large and medium manufacturing industry statistics will focus on reducing non-response and

time lag, improving the business register, and developing e-survey system. Development of

common tools and shared systems that cut across the product lines is included in sub-components

A6-8 and component B.

8. In addition to the product line areas above, the following cross-cutting areas have been

proposed as sub-components: (i) Analysis, Survey Management and Methodological

Innovations; (ii) Quality Assurance; and (iii) Dissemination, User Engagement and

Communications Strategy. This configuration is closely aligned with the existing organizational

structure of BPS to facilitate the implementation responsibilities and monitoring of project

performance and outcomes.

9. Sub-component A1: National Accounts. Improvement plan for the National Accounts is

the first sub-component. Currently, BPS releases quarterly and annual GDP data according to

advance release calendar, and the GDP figures are compiled on the basis of international

standards, methodologies and procedures as set out in the 1968 edition of System of National

Accounts (SNA68). The project will support the efforts of BPS to upgrade its capability to

produce key economic statistics with the latest standards by adopting the 1993/2008 System of

National Accounts (SNA93/08). In the production accounts, substantial improvement is needed

in the scope and coverage of source data, especially with regard to large enterprises, and

problems of discrepancies and under-estimation need to be addressed. In the expenditure

accounts, there are problems of discrepancies and under-reporting as well as timeliness of access

to relevant information. In general, time series based compilation methodologies are needed to

replace the current annually oriented methods. To implement 1993/2008 SNA, the data scope of

existing sources needs to be improved, and under-reporting of consumption by high income

households and under-reporting of production by larger manufacturing enterprises need to be

improved. There is a need to have an integrated time series data management system for

national accounts compilation, analysis and seasonal adjustment. In brief, the project will

support improvement of source data, statistical methodologies, and statistical practices. The

project will support BPS with its undertaking of a comprehensive BPA for each of the National

Accounts business processed and re-engineer processes to meet statistical goals and to achieve

greater efficiency and effectiveness, and determine staffing and resource implications.

10. Sub-component A2: International Trade Statistics. This sub-component aims to improve

quality and timeliness of export and import statistics. Currently, a large share (75%) of staff time

and resources for compiling international trade statistics is spent on data processing. Data entry

of statistical information from hardcopies of customs export and import documents is a large job.

About 50% of information in softcopies is in EDI format in Oracle (which BPS does not have

due to high costs) and the remainder is in CDs or diskettes. The project will support

32

improvement of data capture, coding and transfer of international trade statistics. BPS will

collaborate closely with key stakeholders such as Directorate General of Customs to have better

access to export and import data, and with the Bank of Indonesia (BI) to ensure consistency and

quality assurance of the data from softcopies. Reduction of time lag between data capture and

dissemination are key objectives and this should be undertaken using standard processing

procedures in accordance with international standards. Among the high priority project activities

are BPA/BPR of the Foreign Trade System with the objective of working through how to re-

engineer the system, using the new technology environment, to obtain the desired quality,

timeliness and efficiency improvements. The reduction of time lags to publication is a high

priority. The project will benefit greatly from a uniform ICT platform and strengthened data

processing and computing capabilities through introduction of the data warehouse.

11. Sub-component A3.a: Large and Medium Manufacturing Industry Statistics. This sub-

component aims to improve the quality of manufacturing industry statistics from establishments

with 20 employees or more. The data is collected from an Establishment Survey of Large and

Medium Industry routinely carried out every year from around 29,000 establishments by

complete enumeration method. Low response rate (72% for annual establishment survey and

60% for month establishment survey), especially among larger establishments, stemming from

lack of appropriate attention paid by the establishments to the surveys, is a major problem.

Refusals, lack of cooperation, and partial responses often take place for sensitive items such as

financial matters. The project will review the business process to analyze and identify technical

improvements and efficiency gains to be made. Maintaining a more up-to-date directory of

manufacturing industry establishments will be done through use of administrative data from

other sources such as tax registration. To improve response rate and quality of filled

questionnaires: (i) better cooperation with respondent establishments, (ii) change in survey

design (complete enumeration of large firms and sample survey for medium-scale establishments

of workforce from 20-99); and (iii) improvement of survey methodology, including adjusting for

non-response and reduction of respondent burden. Other investment activities to improve data

quality are: (i) improvement of survey management, (ii) development of training systems, (iii)

improvement of data processing system, and (iv) creation of a system to monitor and evaluation

of the implementation of the standard operating procedures (SOPs).

12. Sub-component A3.b: Improving the quality of Horticulture and Estate Crops

Statistics. In agriculture production statistics, the activities to produce food crops statistics are

considered adequate at the moment, but there is room for improvement in collecting and

compiling production statistics in horticulture and estate crop. There is concern among users

that the export data for agricultural products exceed production data. Horticulture data come

from two sources, Horticulture Establishment Survey for large establishments and Survey of

Horticulture for diverse commodities. Similarly, data collection of estate crops statistics is

conducted through a survey of Large Plantation Estates and a report by the Ministry of

Agriculture of smallholder estate crops. The survey of plantation estates is conducted on a

complete enumeration basis every month and every year with the plantation estate directory

serving as the sample frame. The monthly survey collects the data from 406 rubber plantation

estates, 1,176 palm oil plantation estates, 130 cocoa plantation estates, 118 coffee plantation

estates, 159 tea plantation estates, 89 sugar cane plantation estates, 21 tobacco plantation estates

and 17 quinine plantation estates, while the annual survey of plantation estates covers 2,000

establishments. The data from smallholder estate crops is collected by district plantation

33

enumerators in cooperation with the Ministry of Agriculture. An incomplete and out-of-date

directory of establishments is the cause for inaccurate data, which in turn is a source of low

response rate, which is exasperated lack of quality human resources. Information from other

agencies and institutions will be used to improve the accuracy and completeness of the

directory through cooperation. Improvement of response rate could be done by improving

methodology, improving cooperation with other agencies, reducing the work-loads, and use of

new technologies.

13. Sub-component A4: Improving Price Statistics. BPS compiles price indices relating to

transactions between buyers and sellers at different points along the production and distribution

chain. Current unmet demand relates to development of a comprehensive production price index

(PPI) and improvements in the rural price index (RPI), wholesale price index (WPI) and

consumer price index (CPI). BPS currently produces an RPI which is used to derive farmers‘

terms of trade index, and a WPI which is used as a proxy for a PPI for the industries covered.

The project will support development of a comprehensive of PPI which conforms to

international standards and has high coverage of all goods and services. The scope of the

proposed PPI relates to agriculture, mining and quarrying, manufacturing, and energy and

electricity sectors, with price collection covering all provinces in Indonesia. BPS plans to carry

out monthly data collection with surveys from 2010 with: (i) Producer Price Survey (HP-S)

which will collect producer prices from four sectors, Agriculture, Mining and Quarrying,

Manufacturing, and Energy and Electricity, and (ii) Producer Price of Construction Survey (HP-

K) which will collect producer prices of building materials. The PPI will be presented at the

national level: (i) by industry sector, (ii) by commodities grouped under a stage of processing

framework (raw materials, intermediate products, and final products), and (iii) by end use

categories (intermediate goods, consumer goods and capital goods, and special building

materials in the construction sector). To implement this, BPS plans to strengthen project

management arrangements and improve the elements of PPI which will enable conformation to

international standards. BPS plans to develop a system of price statistics to coordinate and

integrate activities to produce CPI, WPI, PPI, and urban and rural price indices.

Improvement of the methodologies to produce WPI and improvement of communications

strategy for CPI are also among the highest priority items in BPS improvement plan for price

statistics.

14. Sub-component A5.a: Improving National Socio-Economic Survey. The National Socio-

economic Survey (SUSENAS) is one of the premier BPS household surveys. SUSENAS

includes questionnaire items on socio-economic characteristics, education, health, housing, and

income and consumption expenditure. Over the years, SUSENAS has responded to the evolving

data needs, for instance, special modules have been added to the core module to collect

information of special interest such as crime and social capital. Sample size has increased over

time to enable production of poverty estimates at progressively more disaggregated level in

terms of geography. SUSENAS is a complex survey operation which covers survey planning,

field preparation, field implementation, data processing, and data presentation. The Project will

support the activities to improve the quality of statistics from SUSENAS . First, SUSENAS will

be re-engineered from an annual survey to a ―continuous‖ operation, which will distribute the

workload throughout the year and remove seasonal variation. The Project will implement steps

to improve the quality of supervision and adopt enhanced accountability mechanism such as: (i)

assignment of clear responsibility at every level, (ii) systematic evaluation at every level of staff

34

performance, (iii) introduction of incentives to reward excellence, and (iv) appropriate field

assignments and operations. The Project will introduce improved staff training in data entry,

data processing and dissemination practices.

15. Sub-component A5.b: Improving Labor Statistics. The National Labor Force Survey

(SAKERNAS) is a regular survey specially designed to collect data twice a year. The purpose of

SAKERNAS is to provide basic labor force indicators each semester on number of working

population, unemployment, population out of labor force at the national, provincial and district

level. One of the key obstacles to producing quarterly labor statistics from SAKERNAS is

inability to complete the survey before the next survey commences. The Project will support re-

design of the survey to improve efficiency and timeliness. Systems will be re-engineered to

assist in improving timeliness with the aid of Computer Assisted Coding, upgrading of data entry

software package, and better use of network technology.

16. Sub-component A6: Survey Management, and Methodological Innovations. Survey

management is also critical work for statistical quality to ensure that survey operations workload

for the field offices, as well as respondent burden are well managed. BPS Methodology unit will

improve survey management across the organization to promote integration and reduce

duplication between surveys, and reduce respondent burden, as part of its efforts to improve

survey response rate. For example, better integration in field operations of SUSENAS and

SAKERNAS as both move towards ―continuous‖ enumeration should improve efficiency as well

as quality, through (i) reduction of non-sampling errors arising from adoption of a smaller, better

trained and more skilled enumerator panel, and easier facilitation of computer-based quality

control of fieldwork; and (ii) capture of seasonality of indicators and removal of seasonal biases.

17. Under the Methodology unit, improvements in common statistical infrastructures will also

be addressed, such as the development of an integrated business register (possibly based on tax

records), and improvements in master sampling frame for household surveys (e.g. special sample

frames for high-income or remote areas). During preparation, BPS has decided on the

development of an integrated business register and establishment of a Large Business Unit to

manage relationship with the largest businesses in Indonesia, under the coordination of the

Methodology unit.

18. Sub-component A7: Statistical Analysis and Quality Assurance. Strong analytical skills

are essential in a National Statistics Office to ensure consistency within product lines, and

coherence across various data collections within BPS, as well as between BPS collections and

those from other government institutions, such as the Central Bank. The work of the BPS

Analysis unit assists data users in reading and interpreting published data. Under the Project,

analytical skills, such as seasonal adjustment capability, will be developed.

19. This sub-component will also address development of a robust Quality Assurance System to

ensure that any quality issues are identified and addressed in a timely manner. Quality control

mechanisms should also be built into the different stages of statistics production, from data

collection, entry, processing, analysis and dissemination. As a first step, BPS has developed a

BPS Quality Assurance Framework (QAF), based on international best practices, during

project preparation phase. The QAF will also provide a structured approach to describing

quality to internal and external users, thereby assisting them to make more effective use of the

35

statistics. While quality is everyone‘s business, there are some tasks that need to be assigned to a

Quality unit. These include, for example, development of Quality Guidelines for BPS,

establishing a quality reporting program and ensuring it is functioning correctly, and organizing

quality awareness training for staff. Project activities under this sub-component may include:

(a) Establishing a Quality Unit: with appropriate mandate and staff including statistical

experts;

(b) Establishing a program of review of all surveys: on a rotating basis, based on a

standard quality template;

(c) Establishing a set of quality and performance indicators, which may differ somewhat

between surveys, for which values are to be collected for each survey occasion and a

selection of which will appear on a quality dashboard for senior management on a

monthly/quarterly basis;

(d) Introducing quality issues as a standing agenda item at senior management meetings;

(e) Establishing a mechanism whereby quality problems are identified, prioritized and

brought to the attention of senior management at the time it is making resource

allocations;

(f) Introducing quality awareness training for all staff, especially including regional

offices, emphasizing that quality is a corporate objective, discussing the main quality

issues and how they are being addressed, and indicating the role each staff member plays

in quality outputs.

20. Sub-component A8: Dissemination, User Engagement and Communication Strategy.

This sub-component includes improvements in user services and statistical dissemination. While

BPS collects a wealth of data each year, many users are not aware of the extent of products and

services available, due to lack of communication. The main user complaint about BPS website is

the lack of contents and updating of data. Improvements to be undertaken in this sub-

component will address both accessibility to BPS products through enhanced online interface

to access major BPS data and publications, and institutionalization of mechanism to obtain

and respond to user feedback. Some Quick-Win‘s include putting the Advance Release

Calendar, metadata catalogue and publications catalogue in a more prominent place on the BPS

website, as well as review of the BPS pricing policy.

21. Improvements for data management under the product lines and for dissemination services

will be supported by development of Input and Output Data Warehouses. These Data

Warehouses will integrate the product line specific databases in Subject Matter units and the

Statistical Information System Directorate. These will support internal users who require access

to source data from multiple product lines to produce statistics such as national accounts and

poverty rate, and for analysis of coherence across product lines for quality assurance, as well as

for production of statistical reports and publications.

22. Under the Project, BPS will also establish a User Engagement and Communication Strategy

to systematically engage data users to obtain their feedback on the quality of BPS products and

services, as well as to communicate any changes or revisions it intends to make in

methodologies. User Groups or Technical Advisory Groups for key statistics will be

36

established to foster improved communication between BPS and data users. How frequently

these groups will meet depends on the product line—for example, national accounts group may

meet quarterly, just after the release of quarterly GDP statistics.

23. BPS will also conduct a User Satisfaction Survey periodically to assess the satisfaction rate

of its products and services by key stakeholders in government and public. Initial design of the

survey, as well as benchmarking has been conducted as part of the project preparation.

24. Component B: Improved ICT Platform and Statistical Information Management

Systems. BPS is increasingly called upon to provide more comprehensive and sophisticated

statistics. Demands and expectations from customers are pressuring BPS to provide more source

information, better access to analysis tools, and more transparency in statistical products (e.g.

explain the reliability, calculation methodology, applicability, etc.). In order to deliver on these

expectations, BPS needs to overhaul the way it manages data information, as well as the

underlying ICT infrastructure. The ultimate objective of the Project is to improve statistical

quality, which is very dependent on investments in ICT, human capability and project

management. National Statistics Offices generally have multiple ―statistical administration

systems‖, e.g. a National Accounts system is different from a household survey system, which is

different from an establishment survey system, etc. In a Statistics Office, there are more separate

systems than most other agencies. However, it is also important to identify the shared/ common

elements across survey types such as household surveys, industry surveys and ensure greater

integration between systems exist. During the preparation phase in2009/10, BPS has identified

core common systems and the individual systems needed to deliver a more integrated approach

to the delivery of its official statistics.

25. Improving ICT and information management systems is one of the key ―enabling strategies‖

which supports the ultimate goal of improving statistical quality and plays a significant role in

modernizing the BPS office. BPS has developed an integrated Enterprise Architecture (EA) in

2010 based on an international standard—UNECE‘s Generic Statistical Business Process Model

(GSBPM)—and an Information Systems Governance framework.

Figure 2: UNCENE’s Generic Statistical Business Process Model (GSBPM)

26. In the Modernization Proposal, BPS outlines its plan to standardize and centralize IT

operations and resources, moving towards increased use of common tools and methodologies,

shared systems and pooled resources. These include:

(a) Establishment of an ICT Management Committee to oversee high level decision

making on ICT standards, resource allocation and procurement; and

37

(b) Establishment of an Architecture Office to support the development of standards,

tools and systems, based on the agreed EA model.

(c) Recognition of ICT Human Resources Management of IT staff—applications

programmers and systems analysts—will also be centralized under the Directorate of

Statistical Information Systems, which will be responsible for allocating IT staff work in

subject matter units, as well as for their training and development.

Figure 3: Common Functions, Stores, and Shared Facilities Data Management and Metadata management – across statistical lifecycle

Functions

______

______

______

.....

Stores-files

databases

DataWarehouse

Common,

shared

functions &

facilities Functions

______

______

______

.....

Functions

______

______

______

.....

Functions

______

______

______

.....

Applications Functions and ICT Facilities management – across statistical lifecycle

ICT Facility ICT Facility ICT FacilityICT Facility

27. The ICT architecture. The BPS Modernization Proposal includes the following high level

enterprise architecture overview. It seeks alignment with international statistical practices and

directions and provides opportunities in reusing components from other official statistics

agencies, and international standards, such as ITIL, GSBPM and SDMX. There is need for a

more centralized approach to ICT than has been the case in recent years in BPS. It will consider:

(a) Integration of statistical processes which need to be supported by common ICT tools,

infrastructure application for better collaboration and integration;

(b) Effective survey program management enabled by computer assisted integrated

survey management;

(c) Software and ICT infrastructure to support statistical business processes from

planning, preparation, data collection, processing, evaluation and publication.

28. Corporate ownership of the ICT architecture, and a structured approach to modifications, is

very important. It is a key thrust of the STATCAP-CERDAS project. The ICT architecture

should consider the areas indicated in Figure 4.

38

Figure 4: BPS High-level ICT Integrated Picture

29. However, any framework to be adopted should be "light & simple" and understandable by all

relevant BPS staff. Otherwise, there is a strong risk that it will not be maintained. There is lack

of alignment with the international ICT practices in official statistical agencies. Alignment with

international statistical practices and directions provides opportunities in reusing components

from other official statistics agencies, and international standards, such as ITIL, GSBPM and

SDMX. There is need for a more centralized approach to ICT than has been the case in recent

years in BPS.

30. During the preparation phase, BPS will complete a data network strategy, the proposed ICT

enterprise architecture, and a corporate strategy for managing ICT. Alignment between the

statistical areas of BPS and the ICT area is crucial. At present there is not a close alignment

between the ICT area of BPS and most of the statistical areas. The improvement in ICT covers

not only the product lines and activities that are part of STATCAP-CERDAS project, but also

other product lines and activities that are not included in the Project. Even though the initial

focus will be on the product lines included in the STATCAP-CERDAS project, the ICT

improvements are expected to address all activities in BPS, and anticipate the future needs of

BPS.

31. ICT Standardization that BPS would like to have is in the aspect of, for example:

(a) Applications development methodology, process and tools;

(b) Version management of applications and software;

(c) Systems testing;

(d) Standard tools, support and skills; and

(e) Procurement.

32. Information and Application Systems. Data Management is at the heart of BPS business

operations. BPS‘s core business is concerned with statistical capability, quality and consistency.

Responsibilities for data management rest in many areas, particularly in subject matter areas, as

do the supporting applications to carry out data management. While Data Management is not

strictly the responsibility of ICT area, ICT systems and processes assist in the corporate

management of the institutional data. Currently, data management is decentralized across

subject-matter units, so the implementation will require careful coordination with the business

39

process reengineering component to ensure the warehouse architecture reflects the new business

environment, rather than the existing ―stovepipe‖ structure. Data Management and ICT assist this

aim:

(a) BPS is a data processing and publishing organization

(b) Data Management is a core activity; and so

(c) ICT to support data management and statistical processes is also core.

Figure 5: Context Diagram of High Level BPS Business Process System

33. The Project will implement a common and integrated statistical system, shared by subject

matters, with the following components:

(a) Survey Management System: the central point of statistical process management,

enables BPS to manage the whole BPS wide survey programs, managing resources

conflict between individual survey projects. It also enables BPS to manage individual

survey projects from planning to publication. This system is integrated with BPS

management information systems (budgeting, HR).

(b) Collection Management System: a collection of applications to support data

collection and the management of respondent. It includes the application for managing

questionnaire from design to distribution, interfacing with CAPI, CATI and CAWI

applications, as well as consolidating data from those data capture/ interviewing systems.

It also enables BPS to collect/ receive data from external institutions.

40

(c) Statistical and Analytical Processing System: a collection of application to support

the statistical process and analysis, including imputation, estimation, adjustment,

tabulation and time series analysis.

(d) Dissemination System: a collection of application to support dissemination and

publication process. It includes the capability to manage dissemination channels such as

dynamic website, digital library and query tools for users.

(e) Data Warehouse: central repository of survey and publication data including

historical data to improve data accessibility and sharing among subject matters as well as

providing input for time series analysis. Data warehouse is one of the key improvements

expected to improve data accessibility and providing input for time series analysis.

34. ICT Governance. The BPS Modernization Proposal outlines a governance model adopted

by the BPS Executive in 2010 to improve the effectiveness and efficiency of ICT facilities and

applications systems in supporting BPS activities. BPS Executive Management has recognized

their vital role in ICT governance. Its responsibilities include:

(a) ICT is aligned with BPS strategy

(b) ICT and new technologies are seen as key enablers for implementing this strategy

(c) ICT and new technologies are used effectively to achieve desired outcomes

(d) ICT related risks are known and managed

Figure 6: Future Model of Integrated ICT Structure

41

35. An improved understanding of ICT governance and its relationships to areas and roles across

BPS is needed, as is an improved understanding of the ICT related issues and decisions that

should be of concern to different levels within the organization. ICT governance includes human

assets, financial assets, physical assets, intellectual property assets, information assets and

relationships with various service providers. The Project will adopt this governance model.

36. Improve Connectivity. The current Wide Area Network (WAN) is not used to the extent

desirable. Email across the internet with attached spreadsheets is used quite frequently, even

though this is an inefficient and insecure way of transmitting information and data. Demands are

increasing on the organization to provide more coherent and reliable statistics however the

existing workforce skills is an issue which will be addresses via Component C of the Project.

There is a need as this process continues, to equip the organization with the communication

connectivity and related tools to connect more efficiently between all BPS offices. A

―communication connectivity‖ project will be delivered by the Project and will include:

(a) ―virtual‖ work assignments (working from one location while organizationally

reporting to an office in a different physical location including video conferencing, etc.);

(b) effective movement of data (source data for processing, final data products and tables,

etc.) from one location to another within BPS;

(c) access to the Internet for a rich variety of information and communication needs

(access to research, access to other government statistical offices, etc.); and

(d) access to BPS resources (databases, servers, email, etc.) – allowing access from field

offices as if they were located in Headquarters in Jakarta.

Figure 7: Existing BPS Wide Area Network (WAN) Architecture

37. The above diagram depicts the existing Wide Area Network (WAN) connecting 33 BPS

Province offices, 450 BPS District offices, Education and Training Center (ETC) and Statistics

College (STIS) to BPS Headquarters. Currently all 33 BPS Province offices, Statistics Training

Center and Statistics College are connected to HQ through VPN, while BPS District offices are

connected through internet (ADSL connection).

42

Figure 8: Proposed BPS Future Network

38. The future diagram above illustrates data communication network connecting BPS offices in

all locations: Headquarters – Data Center, Province, District, ETC and STIS. In general, to

support the automation of statistical process, all BPS offices should be connected to data center

at Headquarters. BPS Wide Area Network (WAN) infrastructure developed with the following

attributes:

(a) Wherever available, high capacity and reliable network should be selected as the

main option for connecting BPS offices (e.g. Metro Ethernet). Non-terrestrial network

shall be the last option to consider when terrestrial network is not available.

(b) All BPS offices, including Disaster Recovery Center (DRC) shall be connected to the

same WAN cloud to enable easy recovery (swing over) during disaster.

(c) VPN SSL, VPN Dial or other flexible, on-demand network connections shall be

considered as backup.

39. Develop ICT for field offices. The application of new technology does not only apply to

Headquarters Office, but also to Provincial and District Offices. The new paradigm for

designing and processing surveys, interacting with other BPS offices electronically,

disseminating information at the local level, and using the Internet to get their job done will be

delivered by the Project. The new system and process will be trialed and tested in selected

Provincial and District offices to ensure detection of flaws prior to rolling it out nation-wide and

it will provide opportunity for BPS staff to try the new system out in a learning environment.

For these reasons, it is proposed to design a technology solution for a model office that could be

adapted for use in other offices. The objective is also to demonstrate the capabilities of a future

field office operation. It will allow BPS employees to envision a new ―way of doing business‖

for conducting field work in BPS, and invigorate the organization.

40. Develop Risk Management Strategy and Disaster Recovery System. BPS would like to

develop a coherent Risk Management Strategy and Disaster Recovery System that addresses all

risks in a cohesive way. A Risk Management Strategy has several components, i.e. (i) the

identification of the possible risks, (ii) the likelihood of the risk occurring, (iii) the potential

43

damage if the risk did occur, and (iv) possible mitigation strategies. Resource constraints will

limit the extent to which risk mitigation strategies can be implemented. However, it should be a

deliberate decision as to which strategies to pursue or not to pursue. The Project will focus on

those risks that are most likely, and/or result in most damage. Some of the important risks

include the fragility of the BPS website, inadequate testing program for software before it is

distributed, and software support.

41. Develop Professional IT Human Resource. Improving the human resource capability is

crucial in supporting the new IT development within BPS. A series of training modules and a

clear career path for IT staff will be delivered by the Project. To sustain the new environment,

BPS staff will require training in several key skill areas, such as data base management in respect

to data warehouse development, application development, and GIS (e.g. for base map and digital

mapping). Lastly, other information technology / technical trainings, including hardware and

networking, are also possible to support the deployment of IT service helpdesk. In sum, the

trainings are essential to ensure that the future technologies BPS employed can be operated

effectively and optimally.

Table 1: Summary of Current State and Future Improvements

Current State Future State

Old equipment, old platforms incompatible

with newer products and approaches

Risks: infrastructure, availability, capability

and support

Small applications

Few shared environments or facilities

Lack of standards, Tools and Methods

Lack of a common systems development

methodology, processes and practices

Use of many versions of software

Unlicensed Software

Error prone working methods, e.g. testing and

distribution of Applications

Risks in current systems and practices

New improved ICT infrastructure, core

applications systems and capability

Adopting new governance responsibilities for

ICT management as part of for organization

and cultural change

Improvements to the capability and skills of

BPS staff in ICT functions

New policy and procedures for ICT

procurement, standardization

Greater use of purchased pre-packaged

products (Commercial Off The Shelf (COTS))

Attention to measures and management

techniques for an effective and efficient ICT

service (e.g. to ―Total Cost of Ownership‖

(TCO), ―Return on Investment‖ (ROI))

44

42. BPS has also developed diagrams of current processes and what the future process will be

when all the improvements are completed. Examples for SUSENAS (household survey) are

shown in the figures below.

Figure 9: Sample Current Process Diagram – SUSENAS

Household

Provider

CO

LL

EC

TIO

N

Capture Data

Manage Sampling Frame

and Sample Selection

PR

OC

ES

S

(BP

S P

RO

VIN

CE

)

Validation

Entry Data

Processing

Editing, coding and

batching

CS Pro, FoxPro

Backup Data

Data Compilation

and Transfer

Manage Quality

CSPro ? à Notebook

FoxPro

CS Pro, Foxpro

CD/E-mail/FTP

PR

OC

ES

S

(TH

E H

EA

DQ

UA

TE

R O

F B

PS

)

Re-Validation

Completeness

Data Compilation

and Transfer

CS Pro, FoxPro

Backup Data

Editing/Imputation

Manage Quality

FoxPro

CS Pro, Foxpro

CS Pro, Foxpro

Analysis

Tabulation

Consistency Check

SPSS, STATA

Data Estimation

AN

AL

YS

E

Publication

Production

DIS

SE

MIN

AT

ION

Adhoc Data

Creation

Promote

Dissemination

Product

Manage User

Support

SUSENAS PROCESS DIAGRAM

WITH TECHNOLOGIES

BPS

Interviewer

Questioners

Manual book

Figure 10: Sample Draft Future Process Diagram – SUSENAS

45

43. Summary of Improvements. The following list summarizes key improvements to be

delivered by the Project in the area of ICT and Information Management to support statistical

process improvement:

(a) Improvement of ICT governance model and data management to support statistical

process integration and improvement of ICT processes to ensure the effectiveness of

future ICT operation;

(b) Design and improvement of common and integrated ICT systems and infrastructure,

including data warehouse as one of the key enablers for statistical process integration. It

also includes the improvement of statistical systems from planning, preparation, data

collection, publication and evaluation as well as survey management system. The

improvement is designed by considering leading technologies and standards for statistical

office such as SDMX (ISO/TS 17369), DDI, and computer assisted interviewing.

(c) Improvement of ICT network infrastructure to enable a better data exchange between

all BPS offices across Indonesia. Improvement of data center (DC) and disaster recovery

center (DRC) facilities which hosts the critical ICT infrastructure;

(d) Improvement in the area of security to preserve the confidentiality, integrity and

availability of BPS information by establishing an integrated user access authentication-

authorization mechanism, corporate-wide malware control and control to data transfer

and exchange.

44. Component C: Improved Human Resources Management and Development. The HRM

reform is needed as a ―backbone‖ for improving the HRM function within BPS. An HR

transformation that aligns with the BPS‘s target in improving the statistical quality is required by

proposing the applicable solution for enhancing BPS‘s individual capability and improving the

effectiveness of the organizational units, BPS will need to focus on the critical HR issues that

must be addressed to ensure the sustainability of the reform. The Indonesian civil service has

traditionally focused upon administrative compliance rather than generating employee

commitment towards organization‘s objectives. This component addresses the critical support

function of Human Resources Management and Development, especially in view of impending

changes and the need for highly qualified staff to support the new systems. Thus, the approach

of HRM practice will shift from ―using human resources as tools‖ to ―human resources as asset

and contributor‖ in achieving the organization‘s vision and mission‖.

45. Capacity of the HR Bureau needs to be upgraded to sustain changes induced under the

Project, and changes are needed in HR policies, to introduce performance-based management,

incentive schemes and improve areas such as staff placement, rotation and promotion policies.

The Project will address HR Development needs, focusing on strengthening training policies,

programs and capacity (both transitional and permanent, career-path oriented training). As stated

in CERDAS approval document, the improvement of statistical quality will consider as the

improvement of the whole BPS organization which consists of its business processes, ICT

capability, organizational structure, and HRM, rather than improvement merely on statistical

technical and methodology. Since the existing HR policies and procedures are mostly derived

from civil servant law and regulation, BPS plans to add modern HR policies and procedures as

―complements‖. Some HR policies and procedures to be of ―added-value‖ to the current civil

servant ones are:

46

(a) recruitment and selection

(b) training and development

(c) performance management

(d) career management

(e) personnel database and administration

46. The training policies and training program development should be integral parts of the

larger human resource management scheme, and geared towards contributing to career

development of individuals. The Project will focus on strengthening the Education and Training

Center (ETC) as the BPS in-service training facility to effectively manage and provide a full

course of essential and relevant management and technical training required by BPS managers

and staff at all levels. BPS will develop competency model based approach in planning,

implementation, and monitoring of its training and development function done by ETC. The

competency model could include:

(a) BPS core values, including code of ethic and core values of BPS (professional,

integrity and trusteeship)

(b) Soft-skills competencies, including managerial competencies and other soft-skills

competencies, e.g. negotiation, managing conflict

(c) Technical competencies, including project management competencies, statistical

competencies, supporting function competencies, e.g. finance and budgeting, human

resources, and IT competencies.

47. As all trainings will be planned and coordinated by the ETC, the Subject Matter‘s roles are to

feed ETC with training needs, training content as well as to provide trainers.

Figure 11: ETC Training Delivery Plan

48. The Project will upgrade the existing HR management information system (SIMPEG) to be

able to provide managers with information required to take decisions on HR planning and

development. Outlined in CERDAS is the vision for a fully-featured human resource

management information system (HRMIS). Though the current application (SIMPEG) provides

an adequate level of support for the large volumes of transactions related to basic human

resource management (HRM) processes and employee life-cycle events, it suffers from critical

shortcomings in the key areas required to support CERDAS, such as performance management,

succession planning, KPIs, manpower planning, resource, allocation and management necessary

to provide the support required to enabled efficient workforce allocation and HR development

processes.

47

49. Component D: Improved Organizational Alignment. This component will address

institutional framework to ensure that the future BPS organization is ―right-sized‖ and that its

organizational structure and arrangements are strategically aligned with the changes induced by

business process reengineering, introduction of new technologies and systems, and new HR

requirements. The Project will also review and redefine the division of roles and functions

between HQ, province and district levels, as well as the organization of regional office units by

theme (e.g. social statistics, economic statistics), or by function (e.g. field data collection, data

processing). Any changes to legal framework (Statistics Law and related government

regulations) that may be necessary as a result of changes will also be addressed. Change

management strategy will also be developed to ensure the acceptance and sustainability of

changes instituted under the Project. BPS will need to conduct significant assessment of its key

business processes, not only in its core statistical products but also within other supporting

functions such as Statistical Quality Assurance, Methodology and Survey Management, human

resources and finance to ensure the sustainability of the improvements outlined in CERDAS.

50. Component D also has a sub-component to improve the Effectiveness of Corporate

Governance, which includes work on strengthening the Internal Control System, the capacity of

the Inspectorate to conduct internal audit, and effective management policies and procedures for

taking actions on audits and quality reviews.

51. Component E: Project Management. Two key bodies—Project Steering Committee

(PSC) and Project Management Unit (PMU)—are established in BPS to manage and oversee the

implementation of the Project. PSC is made up of the highest leadership of BPS and will be

asked to make key decisions on the issues and matters which have strategic significance for the

success of the project. PMU will perform a day-to-day management of project planning and

implementation, including financial management, procurement, and an oversight of contracting

and delivery of project results. Project Operations Manual (POM) is developed and adopted by

BPS, and provides detailed guidance regarding the agreed mechanisms and procedures for

managing the Project. The BPS POM is a life cycle document that defines management

procedures necessary to deliver CERDAS, and is written in accordance with ISO 15504. The

POM contains sections that define BPS PMU‘s procedures for:

(a) Plan Development, Plan Monitoring and Control;

(b) Quality Assurance

(c) Configuration Management

(d) Data Administration

(e) Change or Implementation Management

(f) Product Testing and Evaluation

(g) System Maintenance

(h) Integration (internal and external)

(i) Procurement

(j) Financial Management

(k) Disaster Preparedness

48

52. The POM contains management processes which governs all BPS development and

maintenance projects. Built into the development and maintenance management program are

systems and business development rules in support of continuous process re-engineering which

in theory will never allow BPS to be satisfied with the current operational baseline.

53. BPS will also acquire an Owner‘s Agent consultant to support this component. The Owner‘s

Agent shall provide four groups of support activities:

(a) Project Management Specialists to assist BPS in project planning, monitoring and

control. This will include procurement and contract management support.

(b) Statistical Specialists to assist in development of Use Cases for the Statistical

Applications and Systems/Infrastructure. This group will provide review services upon

BPS Statistical Services Contractor deliveries of work-products. Also to provide

statistical training and capacity building support as required.

(c) Data Administration and System Engineering Specialists to review ICT specific

deliverables.

(d) Human Resources and Organization Design Specialists to review HR and OD specific

deliverables.

49

Annex 3: Implementation Arrangements

INDONESIA: Statistical Capacity Building-Change and Reform for the Development of

Statistics (STATCAP-CERDAS)

1. Project Governance, Management and Administration Mechanisms

(a) Project Advisory Board. The external Project Advisory Board consisting of

representatives from BPS, MOF, Bappenas, Bank Indonesia, the Bank, and selected key

stakeholders, such as members of the Statistical Council (Forum Masyarakat Statistik—

FMS) and universities, will be established within 30 days of project effectiveness.

(i) The purpose of the Advisory Board will be to provide strategic guidance,

coordination, and oversight mechanisms for the STATCAP-CERDAS project, including

key outside stakeholders from government and non-government entities.

(ii) The Advisory Board will meet once every semester. Agendas and minutes shall be

prepared and filed by the STATCAP-CERDAS Project Director (Director of Statistical

Integration and Transformation). Each Advisory Board meeting will consist of a briefing

on the status of the STATCAP-CERDAS project by the Chief Statistician.

(iii)Minutes shall be kept by the STATCAP-CERDAS Project Director (Director of

Statistical Integration and Transformation), approved by the Board Chair (Chief

Statistician), and distributed by electronic means to the members of the Advisory Board.

Diagram 1: STATCAP-CERDAS Project Implementation Structure

(b) Technical Advisory Groups (TAGs) and User Groups. Technical Advisory Groups

comprised of internal and external experts on specific subject matter could be set up, such as

TAG for National Accounts. TAGs will provide a forum for investigating specific quality

issues, and opportunities to get peer and expert inputs. User Groups will be a less technical

forum, but equally important to provide opportunities for data users to engage directly with

BPS to gain better understanding of BPS products, such as methodology. It will also provide

50

a chance for BPS to obtain user feedback and ensure relevance of its products and services.

These User Groups can also be organized thematically or by specific product lines.

(c) Project Steering Committee. The Project Steering Committee is chaired by the Chief

Statistician, and its membership comprises of all the Echelon I Senior Executives of BPS.

(i) The functions of the Project Steering Committee are to provide strategic guidance and

decision taking for cross-cutting and integration issues. In addition, the Steering

Committee will be reviewing decisions by the Procurement Committee, and provide

approval of intermediate and final deliverables. It will also deal with possible issues

related to external stakeholders, such as other government institutions and parliament.

(ii) The Steering Committee will meet monthly. Agendas and minutes shall be prepared

and filed by the Head of Sub-Directorate for Project Implementation Planning and

Control. Each Steering Committee meeting will consist of a briefing on the status of

STATCAP-CERDAS project implementation progress, a delivery of the latest version of

the Project Plan, issues which require the Chief Statistician‘s intervention (such as budget

issues), changes that could affect the scope and cost of STATCAP-CERDAS project, and

integration issues. The STATCAP-CERDAS Project Director (Director of Statistical

Integration and Transformation) will report on project progress, and key issues and risks

to be resolved by the Steering Committee.

(iii)There shall be an issues log maintained for all problem areas dealt with at the

Steering Committee. The log shall include designation of responsibilities, actions

necessary to overcome the problem in questions, deadline for overcoming the problem,

and dates when the issue was raised and resolved. The log shall be maintained in the

STATCAP-CERDAS PMU (Directorate of Statistical Integration and Transformation).

(iv) Minutes shall be kept by the STATCAP-CERDAS Project Director (Director of

Statistical Integration and Transformation), approved by the Chief Statistician, and

distributed by electronic means to the members of the Steering Committee.

(d) Sub-Committees. The Steering Committee may appoint Sub-Committees to focus on

areas such as statistical integration, future ICT management, future strategic human resources

management, and organizational alignment. Agendas and minutes shall be prepared and filed

by the relevant PMU Component Coordinators (Head of Sub-Directorate under the

Directorate of Statistical Integration and Transformation) assigned to each Sub-Committee.

(i) The Sub-Committees will consider issues of detail and/or technical nature, so that

only the more strategic issues that have impact across the organization are brought to the

Steering Committee. For issues that affect the whole of BPS, such as organizational

alignment (or institutional arrangement), the Sub-Committee on HR and Organization

will make recommendations to be considered by the full Steering Committee.

(ii) The Sub-Committees are chaired by an Echelon I Senior Executive, and the relevant

Echelon 2 Managers could be members. One or two regional office managers will also

be selected to serve on the Sub-Committees on a rotating basis, to represent the regional

offices. The regional representatives may be invited to participate when the Sub-

Committee will discuss issues that directly affect the regional offices.

51

(iii)The Sub-Committees will govern decisions on issues of technical nature related to

their respective areas, i.e. Statistical Integration, ICT, and HR & Organization. These

may include relevant proposals for changes, policies and standards. Decisions taken by

the Sub-Committees shall be reported to and reviewed by the Steering Committee.

However, when the issues considered are of strategic nature that have impact on the

whole of BPS and across many areas, the Sub-Committees shall review the issues and

present recommendations on options and alternatives—along with relevant analyses, such

as impact, cost-benefit, and risk—to the Steering Committee for final decision.

(iv) For example, the ICT Sub-Committee will govern decisions on information

management (e.g. data definition and processing standards), and on the management of

ICT operations (e.g. service provision standards for in-house and out-sourced ICT

operations).

Diagram 2: Steering Committee Support Structure

(e) Directorate of Statistical Integration and Transformation (DoSIT). A full-time

Project Management Unit (PMU) for the STATCAP-CERDAS project was established in

September 2008 to coordinate project preparation and implementation. However, this PMU

is expected to be expanded to include the integrated statistical functions and project

implementation monitoring and control roles, and become a Directorate of Statistical

Integration and Transformation (DoSIT). This Directorate will be a new structural unit

headed by an Echelon II official and supported by full time structural and functional staff,

and will be responsible for day-to-day management and administration of project

implementation. The Directorate will also be responsible for the integration and cross-

cutting issues of the STATCAP-CERDAS project, and implementation monitoring and

52

control of the project. The Directorate will not only be responsible for the management of

the STATCAP-CERDAS project implementation, but also for the implementation of the

broader Bureaucracy Reform and other new improvement initiatives as determined by BPS

Senior Executives. BPS will prepare a proposal to the Office of the President, through the

Ministry of Administrative and Bureaucracy Reform (KeMenPAN-RB), to establish the new

Directorate during the first year of project implementation in 2011.

Diagram 3: Directorate of Statistical Integration and Transformation (DoSIT)

The establishment of the Directorate of Statistical Integration and Transformation is to ensure

the sustainability of changes from the STATCAP-CERDAS project beyond the project‘s

lifetime, and to serve as the vehicle for BPS to carry out continuous improvement. Its work

may shift over time according to the emerging and changing needs of BPS, as it develops and

modernizes.

(i) The Directorate will have four structural sub-units led by an Echelon III staff

responsible for: 1) Statistical Integration and Data Management, 2) Technology

Transformation Management; 3) HR Management Transformation; and 4) Project and

Change Management.

(ii) This Directorate will oversee the implementation of the BPS Bureaucracy Reform

Roadmap, and it is important that it will be staffed by those who have credibility within

the organization as ―change agents‖, and can serve as ―role models‖ of reform.

(iii)Donor Coordination will also be undertaken by the new Directorate to ensure donor

support to BPS is directed towards the strategic priorities identified by the Executive

Management Team (Echelon I officials).

(iv) Project Management: Responsibilities include: day-to-day decision taking and

coordination of the project, management of problem-resolution mechanisms, and

oversight of the project administration.

53

(v) Project Administration: Responsibilities include: procurement, financial

management, record keeping, and project logistics. Procurement and financial

management tasks will be undertaken jointly between the DoSIT and the relevant units,

such as the Program Development Bureau (planning and budgeting) and the Finance

Bureau. Staff from DoSIT will also serve in the Procurement Committee for Foreign

Assistance Projects. Staff from budget and finance units will be assigned to manage

project-related issues, and will be provided with targeted and ongoing training throughout

the project by World Bank financial management and procurement specialists.

(vi) Project Monitoring & Evaluation: Responsibilities include:

a. Compile operational information from BPS, as necessary, and conduct user

surveys. Periodically report on Key Performance Indicators (KPI) and Intermediate

Result Indicators (IRI), and analysis thereof to the Project Steering Committee.

b. Daily project activity tracking. Develop and assign responsibility for periodic

administrative reporting on the project.

c. Prepare Monthly Project Progress Reports to the Project Steering Committee,

Quarterly Project Progress Reports to the World Bank, and Semi-annual Monitoring

& Evaluation Reports for Project Advisory Board Meetings.

d. Prepare Quarterly Project Financial Management Reports to the World Bank.

e. Prepare for auditing of the project financial accounts by BPK.

(f) Procurement Committees. Procurement Committees are established for the STATCAP-

CERDAS project, and all its members will be trained on the procurement procedures

applicable to the project as specified in the loan agreement, i.e. World Bank procurement

guidelines and procedures. If the membership is changed, new members must receive

training before participating in procurement processes. Technical Evaluation Committees

may be appointed, with appropriate internal and external experts, to assist with the selection

process. Decisions of the Procurement Committees shall be reviewed and approved by the

Steering Committee. BPS will also hire an international procurement specialist to support

the Procurement Committees and Technical Evaluation Committees.

(g) Owner’s Agent Services. The Owner‘s Agent (OA) is expected to provide an objective,

unbiased feedback channel, with no conflict of interest in programs being reviewed. An

independent, professional expert assessment can be provided for quality assurance of

processes and outputs, including reviewing proposals and bid evaluations, testing of contract

deliverables before acceptance, and physical verification and monitoring of contract

implementation and milestones. It provides support services for project management,

procurement and contract management.

OA will provide support services for the duration of the Project, in monitoring and

controlling implementation progress, quality assurance, change control, database

development, organizational change management, statistical product line integration,

procurement, financial management, testing and evaluation of contract deliverables before

acceptance, and risk management and mitigation. Early OA tasking is expected to include:

assisting in the bid evaluation process, monitoring critical project schedule and budget

compliance, ensuring compliance with quality standards outlined in the POM, and reviewing

54

contractors‘ applications for payments. The detailed scope of OA activities is being

developed during project preparation phase.

(h) Change Management. Embedded within each of the components of the Project is new

ways of doing business and changes of organizational culture. There is strong emphasis on

the soft skills, such as communication, collaboration and integration which will require

significant change management. For example, components A and B will require training and

development of new skills to adopt the new business processes and use of new ICT

applications. Although institutional reform is a long-term objective, short-term successes are

essential for gaining credibility of the reform and maintain momentum. Like any major

reform and transformation project, resistance is unavoidable and often in change

management paradigm, friction is necessary to effect change. Managing the resistance and

frictions becomes the key to successfully managing the change process. Some of the

resistance will be more of a personal nature, while the benefits of the reform will be a

―collective‖ outcome, not just for BPS but the country as a whole. Understanding the

political economy of reform has been integrated into project preparation and will be

incorporated in Bank supervision.

During the project preparation phase, BPS has developed a Change Management Strategy

and Plan, with support from a Senior Change Management Advisor, as well as established a

team of ―change champions‖ representing various units across the organization.

2. Financial Management. The financial management assessment has been conducted by the

Bank and actions to strengthen BPS‘s financial management capacity have been agreed upon

with BPS. The assessment has concluded that with the implementation of the actions, the

proposed financial management arrangements will satisfy the Bank‘s minimum requirements

under OP/BP 10.02. Overall, the financial management risks for this financing are assessed as

‗Substantial‘ before and ‗Moderate‘ after mitigation.

3. The major project risks may arise from: 1) lack of coordination among the PMU, Satker and

other relevant units to the project within BPS, adding to the issues of project‘s unfamiliarity with

the Bank‘s procurement guidelines and the country process related to donor funds ; and (2) BPS

has not submitted project financial reports on regular basis due to lack of capacity in preparing

financial reporting as required by the Bank. Targeted training on FM and disbursement has been

conducted prior to loan negotiation. This training also included sessions on country systems

related to donor funds, in particular related to treasury and budgeting system.

(a) Budgeting and Flow of Funds. Budget will follow the Government budget mechanism,

which is through the issuance of DIPA. Risk may arise due to lack of familiarity to country

systems on budgeting for donor funds as experienced in previous grant implementation.

Previous grant implementation experienced slow disbursement, due to project administrator‘s

unfamiliarity on managing donor funds. Lack of coordination within BPS also contributed to

the delays.

(b) Internal Control. Risks may arise from lack of control in expenditures incurred under

certain categories as experienced in the grant implementation. In its notes to the financial

statements, the State Audit Board (BPK) noted weaknesses in internal control due to failure

to disclose off-budget grant received from donor. Quarterly financial reports will be

55

prepared for monitoring purposes and submitted to the Bank on timely basis. The project

will be included in the BPS Inspectorate‘s annual audit program.

(c) Accounting and Reporting. Accounting for loan transactions will be done using

government accounting software (SAI) that BPS currently uses. These software applications

have standard accounting controls in place. To have better project information, grant

expenditures and activities will be reported to the Bank under project financial report on a

quarterly basis through Interim Financial Reports (IFRs).

(d) External Audit Arrangement. The PMU is responsible for preparing a separate project

financial statements. The audit of these statements will be carried out by BPK. The annual

audit report will be furnished to the Bank no later than six months after the end of fiscal year.

This will be one of the first audits conducted by BPK for the Bank financed project. The

Bank will conduct separate meeting with BPK to discuss the audit arrangements.

4. The detailed financial management capacity assessment and arrangements are available in

the project files.

5. Disbursement Arrangement. Direct Payments, Special Commitments, Reimbursement, and

Advance methods will be used. Direct Payments and Special Commitments methods will largely

be used for payments for major equipment. A Designated (Special) Account (DA) denominated

in US dollars will also be opened by Directorate General of Treasury (MOF) in the Central Bank

(BI) or a commercial bank acceptable to the Bank. The DA will be solely used to finance

eligible loan expenditures. The ceiling of the advance to DA will be USD 1,000,000. The

Reimbursement method will cover all expenditures that are pre-financed by GOI.

6. The PMU at BPS will be responsible to reconcile all expenditures and to prepare the

applications for withdrawal for advances, direct payments and special commitments.

7. All documentation evidencing expenditures will be retained by BPS and shall be made

available to the auditors for audit and to the Bank and its representatives if requested.

8. Procurement. The procurement arrangements under the project indicate a Services contract,

two information systems (IS) supply and installation contracts and three technical assistance

(TA) contracts. The main Services package will be the Statistical Services and Core Statistical

Systems Development (US$32.6 million) for which the bidding documents will be ready by

April 2011. The two IS packages are the Core ICT System/Infrastructure (US$30 million),

which will be ready in April 2011, and the Human Resources Management Information System

and Internal Audit System (US$8.1 million), which will be prepared in year two of the Project.

The TA packages are for: 1) the Human Resources and Organization Design (US$2.3 million);

and 2) the Internal Audit (US$1.6 million), which should be launched in August 2011. The TA

for the Owner‘s Agent (US$3.6 million) is very critical for the implementation of the project and

the request for expressions of interest should be issued within 60 days of project effectiveness.

9. The procurement capacity assessment for BPS shows that it has the basic capacity to carry

out procurement activities related to the proposed project. BPS has experience under a PHRD

project financed by the Bank in which it carried the selection of a large TA. However, BPS does

not have an established record in carrying procurement of large ICT packages following Bank

Guidelines. The designated procurement committees will be under significant pressure in terms

56

of resources and capacity to be able to carry the heavy procurement load during the first six

months of the Project which will include procurement of large Services and ICT packages, as

well as two TA packages. Additionally, a new presidential decree governing public procurement

is in effect as of January 2011. This new decree (Perpres 54/2010) does not have clear articles

on the applicability of Bank Guidelines in case of loans/grant. This will also increase the risk of

delays in procurement processing as the procurement committee may be reluctant to apply Bank

Guidelines and would possibly try to comply with both the Guidelines and national procedures

leading to difficulties.

10. Based on the above, the procurement risk is set as ―high‖. The following risk mitigation

measures have been discussed with BPS and agreed:

(a) Measures completed during preparation

(i) Support of a consultant firm recruited under the PHRD grant for the preparation of

the bidding documents for the packages for the Statistical Services and Core Statistical

Systems Development and the Core ICT System/Infrastructure, and the RFPs for the

assignments on the HR and Organization Design, and Internal Audit Consultancies.

(ii) Bank has provided IT procurement training to BPS in June 2010 and February 1,

2011, and selection of consultant (firm and individual) on November 4, 2010.

(iii)Bank to reach agreement with GOI on the full applicability of Bank Guidelines.

(b) Measures to be completed by negotiations

(i) Procurement Plan prepared by BPS to be agreed with the Bank.

(ii) Bank support to develop RFP for the TA for Owner‘s Agent in order to avoid

potential conflict of interest of the consultant who was recruited formerly under PHRD

grant which may also interest to participate in the selection process. This consultant will

be supporting BPS on the preparation of other bidding documents and RFPs.

(c) Measures during project implementation

(i) Bidding documents and RFPs indicated under (a)(i) above ready and

bidding/selection processes launched. The bidding documents for Statistical Services &

Core Statistical Systems Development and Core ICT System/Infrastructure are expected

to be ready in April 2011, as well as the RFPs for HR and Organization Design, and

Internal Audit Consultancies.

(ii) Procurement consultant and technical advisors selected to support the evaluation

process of the two TAs, which are expected to be in place in May 2011 and July 2011

respectively.

(iii)Consultant firm to support BPS in evaluation of bids for the Statistical Services and

Core Statistical Systems Development and the Core ICT System/Infrastructure. The

existing consultant recruited under PHRD grant may assist BPS for this.

(iv) Owner‘s Agent to support the preparation of bidding documents and evaluation for

the HR Management Information System and Internal Audit System package. The

selection process for the Owner‘s Agent is expected to be started in April 2011.

57

(v) Bank to continue to deliver training on procurement as needed, including on the

evaluation process, highlighting the differences between evaluation of consultant

proposals and IT bids.

(vi) Active monitoring of the procurement progress by the Steering Committee and the

Bank.

(vii) BPS to consider ―twinning‖ arrangements with national statistical offices that

have undergone similar structural reforms and change management to learn from their

experience.

11. As mentioned above, a new presidential decree governing public procurement is in effect as

of January 2011. This decree states that procurement goods and services for projects funded by

foreign loans/grants shall follow the provisions contained in the Perpres, and that in case of

differences between the regulations of Perpres and that of the provider of the loan/grant, the

parties should agree on methods of procurement. This has initially created uncertainty for BPS

on which procedures to follow. This issue has been discussed extensively with GOI and it has

been agreed that Bank Guidelines will apply. Although no written blanket agreement was issued

for all Bank loans and grants, two loans and three grants have been already negotiated with GOI

which sets adequate precedence. While there may be some concerns raised by individuals, this

issue has been addressed at institutional level and such concerns will be addressed through

appropriate dissemination of appropriate information.

12. Procurement Plan and Procurement Arrangements. ICB procedures will be followed for

the three packages of non-consultant services and information systems acquisition. The

packages are summarized in the Table 3.1 below. The World Bank Standard Bidding

Documents for Non-Consultant Services and Supply and Installation for Information Systems

will be used for these contracts.

Table 3.1: Procurement Arrangement and Schedule of Services and IS Supply & Installation

Packages Project Title and

Scope

Cost

Estimate

(US$ m)

Procurement

Method

Pre-

qualif.

(Yes/No)

Domestic

Preference

(Yes/No)

Bank Review

(Prior/Post)

Expected Bid

Opening Date

A Non-Consultant Services

Package 1

Statistical Services

and Core Statistical

Systems

Development

32.6 ICB No No Prior November 2011

B Supply & Installation for Information Systems

Package 2 Core ICT System/

Infrastructure 30 ICB No No Prior November 2011

Package 3

HRM Information

System 8.1 ICB No No Prior June 2012

Internal Audit

System

13. Selection of Consultants. In addition to the three packages of services and information

systems above, the Project also includes recruitment of some firm and individual consultants.

BPS will use QCBS method for selection of consultant firms, and competitive selection of

Individual Consultants as appropriate, subject to approval by the Bank. Packages are

summarized in Table 3.2 as follows.

58

Table 3.2: Procurement Arrangement and Schedule for Consulting Services

Ref.

No Description of Assignment

Estimated Cost

(US$ million)

Selection

Method

Review

by Bank

(Prior/Post)

Expected

Proposal

Submission

Date

1 Owner‘s Agent Services 3.64 QCBS Prior June 2011

2 HR and Organization Design Consultancy 2.31 QCBS Prior August 2011

3 Internal Audit Consultancy 1.62 QCBS Prior August 2011

4 Procurement Specialist 0.05 IC Prior April 2011

5 Statistical Quick Win‘s 0.2 IC Post June 2011

14. All the major contracts under the Project will be subject to prior review due to the nature and

relatively large size of the contracts. There will only be a few contracts for individual

consultants and these would be subject to post review as needed, which will be conducted

annually if applicable.

15. Detailed procurement documentation should be maintained in the project files, and indicated

as such in this Annex. The detailed 18-month Procurement Plan, once agreed with the Borrower,

should be published in the Bank website in accordance with the Guidelines as well as in the

BPS‘s website.

16. Governance and Anti-Corruption (GAC). The BPS Inspectorate has led the development

of a Corruption Risks Matrix and an Anti-Corruption Action Plan (ACAP) in the Project

Operations Manual (POM) for the STATCAP-CERDAS Project, which contain elements of

disclosures of information, public participation, complaint handling mechanism, and sanctions

and remedies. The ACAP outlines the corruption risk mitigation measures that will be taken by

BPS during project implementation. The Corruption Risks Matrix will be reviewed every six

months to reflect lessons learned and changes in risk levels.

17. Environment. The Project has been assigned Category C, as no adverse environmental

impacts are expected. The Project will not be financing any constructions/civil works, but it will

provide server and network equipment to enable organizational connectivity, and shared

application systems and database access. ―Software‖ will be the major focus of the Project, but

limited quantity of ―hardware‖ will also be provided to accommodate and support this

development. The equipment financed through the Project will be investing in new systems to

augment, rather than replace, existing ICT infrastructure and equipment in BPS. Therefore, the

Project is not expected to generate hazardous materials.

18. Project Monitoring & Evaluation. BPS has prepared a comprehensive Results Framework

with Key Performance Indicators and Intermediate Results Indicators to measure the progress

and success of the STATCAP-CERDAS Project. Relevant implementing Subject Matter units

have agreed to the indicators, and related baseline and target values. From this Results

Framework, which will be used for internal monitoring purposes by the Steering Committee and

PMU, BPS and the Bank shall agree on a sub-set of the highest priority indicators to be used for

external reporting purposes before negotiations. PMU will be responsible for collecting reports

and reviews from implementing units across BPS, the Statistical Analysis and Quality

Directorate, and the Principal Inspectorate for reporting to the Steering Committee, the Advisory

Board and the World Bank.

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19. Project progress reports by activity within components compared to budget and timeline

will be prepared by the PMU. A dedicated website for the Project has been established on the

BPS public website (http://statcapcerdas.bps.go.id) and will provide information on reform

progress to increase transparency. An annual project report will be issued and posted in the

website. A detailed description of the monitoring mechanisms and arrangements will be

included in the POM chapter on implementation arrangements.

20. Role of Partners. Technical assistance from a number of development partners and other

national statistics offices is coordinated to strengthen technical programs, ICT capabilities, and

the development of skills and capabilities of the human resources in BPS. While BPS has

received many such assitance from a range of donors, the current assistance is targetted to deliver

the outcomes identified in the 2010-2014 CERDAS Plan, therefore it is aligned with key

priorities of this Plan. Other development partners are using the STATCAP-CERDAS Project as

a platform upon which to build more coherent technical cooperation projects with BPS.

Following are other donor and partner assistance that will complement the preparation and

implementation of STATCAP-CERDAS Project by BPS.

(a) Policy and Human Resource Development (PHRD) Grant from the Government of

Japan has been effective since December 2008 to help BPS support preparation of the

STATCAP-CERDAS Project. The objectives of the project are: i) to improve quality

(procedures, standards and methodology, statistical infrastructure) and availability

(timeliness, presentation, dissemination) of statistics produced by BPS; ii) to improve the

confidence of users in the statistics produced by BPS through promoting engagement with

users and enhancing responsiveness to their demands; iii) to improve effectiveness and

efficiency of statistical system through better ICT and streamlining of source data

collections; and iv) to improve the skills and capacity of BPS staff, especially in the regions.

Project Implementation Plan and Bidding Documents will be delivered through this grant.

(b) Australia Indonesia Partnership for Economic Governance(AIPEG) is a trust fund of

AusAID to support a number of initiatives in the Ministry of Finance and Minstry of Trade,

due to their area of interest in economic governance, AIPEG is supporting BPS by funding a

number of advisors, who work closely with relevant BPS staff and teams in the areas of

Information, Communication and Technology (ICT), Human Resource Management (HRM),

and Change Management. Building the capability and capacity of BPS staff in these key

areas information technology and managing of its human resources. These are key areas of

STATCAP-CERDAS Project and the success of preparing a good project relies upon BPS‘s

increased capabilities.

(c) Australian Bureau of Statistics (ABS)-BPS Memorandum of Understanding (MOU)

2010-2014 with funding from the AusAID Government Partnership Fund (GPF). BPS and

ABS signed a MOU in February 2010 for four years to support a range of technical

assistance and study tours, demonstration projects to help BPS improve in key technical areas

such as National Accounts, Social and Labor Statistics. ABS senior management will also

provide support in the area of corporate governance, change management and strategic

human resource management.

60

(d) Technical cooperation around information technology and management with Statistics

Korea (KOSTAT) with support from the Korea Trust Fund. This will deliver activities with

KOSTAT through twinning arrangement, aimed at enabling BPS to benchmark KOSTAT's

experience in ICT management and operation, with a focus on data warehouse and on-line

dissemination. Among others, it will finance: (i) workshops and study tours organized by

KOSTAT for BPS ICT managers and staff to learn the system requirements for running ICT

infrastructure to support the agency‘s system design, architecture, capital investments, and

recurrent costs; and (ii) hands-on training of BPS staff on web-design and contents

management for on-line information dissemination.

(e) Partnership for Knowledge-based Poverty Reduction is a multi-donor Trust Fund that

has been established with the objective to strengthen national efforts to reduce poverty and

vulnerability by supporting the Government of Indonesia in making informed and evidence-

based policy and program decisions. The proposed program will start with financing from

AusAID. The trust fund will support BPS among other agencies to improving their ability to

accurately measure poverty, and to support improvement in the timeliness, frequency and

accessibility of data that is required for policy researchers and analysts in Indonesia. It will

also provide technical assistance and capacity building support to improve statistical

methodologies and survey operations and help facilitate dialogue for BPS to better engage

with data users and improve accessibility to its products and services.

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Annex 4: Operational Risk Assessment Framework

INDONESIA: Statistical Capacity Building-Change and Reform for the Development of Statistics (STATCAP-CERDAS)

Project Development Objective(s)

To increase the effectiveness and efficiency of the Indonesian National Statistics Office (BPS-Statistics Indonesia) to produce and disseminate reliable and timely statistics in accordance with international standards and best practices, and to be responsive to user needs.

PDO Level Results Indicators:

1. Accuracy. Demonstrable improvement in the accuracy of key statistics. 2. Relevance. Availability of important new statistics. 3. Timeliness. Improvements in the timeliness of key statistics. 4. Accessibility. An improvement in the accessibility of BPS statistics. 5. Coherence. An improvement in the coherence of BPS statistics. 6. Interpretability. An improvement in the interpretability of BPS statistics.

Risk Category Risk Rating

Risk Description Proposed Mitigation Measures

Project Stakeholder Risks L BPS reform program receives strong support from the government and donors, but there is a risk of general public perception about the reform and the independence of official statistics.

There will be proactive communication to the public about the benefits of the reform program in BPS, through increased accessibility to products and services, as well as transparency of reporting on project implementation progress.

Implementing Agency Risks MI The main risks related to the Implementing Agency’s capacity and governance include: lack of experience managing a complex donor-financed project with a large ICT component; and weak internal control mechanisms to ensure implementation and enforcement of new rules, policies and Standard Operating Procedures. Corruption is a general concern in implementation of large projects, learning from experiences in other Bank projects in Indonesia.

BPS has established a high-level Project Steering Committee and a full-time Project Management Unit (PMU) to coordinate and monitor project implementation, and plans to expand the PMU as a structural unit, the Directorate of Statistical Integration and Transformation. The PMU has gained experience with Bank procedures through managing the PHRD grant, and relevant BPS staff has received GAC, Procurement and Financial Management training. Additional training and guidance will be provided during implementation, and BPS will also engage procurement and Owner’s Agent consultants to support procurement, contracts management, and project quality assurance.

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BPS has also developed a Project Operations Manual outlining the agreed project management framework, procedures and guidelines, including an Anti-Corruption Action Plan, with disclosure and complaint handling mechanisms.

Project Risks Design

MI

The success of the Project will depend on significant organization cultural change to greater integration and “corporate” behavior. Improving the quality of official statistics produced by BPS, such as National Accounts, will require support from other government institutions that provide data to BPS. National Statistics Offices must ensure strict confidentiality of its respondents.

Change management strategy is being developed during project preparation phase to conduct socialization and communication. The system design will enforce sharing and integration, and training in new processes and systems is part of the integrated design of the Project. Technical assistance and training support will be extended to data provider agencies, as necessary; the Project also has strong support from key stakeholders, such as the Vice President’s Office and the National Development Planning Agency, that oversee line ministries and technical agencies. MOUs will be negotiated between BPS and key data provider agencies on data sharing. Information system security is integral part of the BPS ICT systems design.

Social and Environmental

L There are no adverse environmental impacts expected.

N/A

Program and Donor

ML

Government-wide civil service regulations restrict the pace of reform in BPS. Coordination between support and assistance provided by various NSOs and donors, such as ABS, KOSTAT and AIPEG, will be required for BPS to obtain timely inputs to STATCAP-CERDAS project implementation.

Any policy exceptions that may be required to be approved will be consulted from the early stages with relevant civil service authorities, such as the Ministry of Administrative and Bureaucracy Reform (KeMenPAN-RB). Donor/partner coordination will be one of the responsibilities of the STATCAP-CERDAS PMU.

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Delivery Quality

MI

Greater capacity will be required to manage and operate large ICT systems. Future funding for maintenance and operations is not assured, representing a risk to sustainability of the new systems. There is the risk to the retention of key, skilled staff trained or recruited through the Project.

Training in contracts management will be provided to PMU and ICT staff in BPS, and contracts management support and technical consultancies will also be provided through Owner’s Agent services. Capacity building of BPS staff will be key part of the contractor scope of services. Shares of recurring maintenance costs for installed systems will be increased gradually to be fully financed by BPS budget by the end of the Project lifetime, and allocated in BPS budget in the next medium-term budget framework (2015 onwards). Improve incentive structure and remuneration scheme to reflect staff performance and qualification under HR component of the Project.

Overall Risk Rating at Preparation

Overall Risk Rating During Implementation

Comments

MI MI

The rating of Medium driven by Impact (MI) for preparation is associated with the need to improve capacity to manage project implementation. The same rating for implementation reflects the risks related to management capacity and change management to ensure sustainability of reform.

Abbreviations:

L: Low ML: Medium driven by Likelihood MI: Medium driven by Impact

Annex 5: Implementation Support Plan

Indonesia: Statistical Capacity Building-Change and Reform for the Development of

Statistics (STATCAP-CERDAS)

1. Implementation Strategy. The main risks identified the STATCAP-CERDAS project

implementation are related to BPS‘s capacity and governance, including: low capacity to

manage complex ICT procurement and contracts; weak internal control mechanisms to ensure

implementation and enforcement of new rules, policies and Standard Operating Procedures

(SOPs); and capacity to manage culture change from ―silo‖ to ―corporate‖ culture. Therefore,

Implementation Support focuses on addressing these risks. The team is also mobilizing other

donor and partner support to providing technical assistance and capacity building in the areas of

statistics, ICT, HR and change management.

(a) Procurement. The Bank will continue to discuss with the GOI in relation to the new

Government Procurement Regulation. The applicability of Bank Guidelines should be

agreed with the GOI to be systematically applied to all projects to avoid difficulties on the

project. The Bank will also conduct the supervision including ensuring consultants support

to the procurement committees are in place and providing quality services during preparation

and evaluation.

(b) Financial Management. Supervision of project financial management will be risk-

based. The supervision will review the project‘s financial management system, including but

not limited to accounting, reporting and internal control. The financial management

supervision will be conducted by financial management specialist and Bank consultants.

2. Implementation Support Plan

(a) Technical. The Bank team will include a Statistical Advisor and an ICT Advisor, who

will work with other technical specialists supported by other donors and partners, such as

AIPEG, ABS and KOSTAT.

(b) Procurement. The procurement team will provide the specific training especially for

supply and installation for Information Technology as well as selection of consultant firms

under QCBS method. The training will be dedicated for the procurement committee,

engineering department and the PMU staff who will involve in this project. The Bank will

also assist BPS in preparing the procurement plan and monitoring the procurement progress.

The Bank will also supervise the performance of consultants that will be providing assistance

to the procurement functions in the project.

(c) Financial Management. In the first year, the FM team will continue to help BPS in

capacity building needs to comply with the Bank‘s financial management requirements. It is

estimated that around four staff-weeks will be required for the FM team annually.

(d) This plan will be reviewed at least once a year to ensure that it continues to meet the

implementation support needs of the project.

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Time Focus Skills Needed Partner Role

First twelve months Mobilization Procurement, FM,

Change Management

AIPEG support on Change

Management Advisor

12-48 months Quality

Assurance

Statistics, ICT, HRM AIPEG support on IT and

HR Advisors

Other Technical

Assistance

Statistics, ICT ABS, KOSTAT providing

TA support on Statistics

and ICT

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Annex 6: Team Composition

INDONESIA: Statistical Capacity Building-Change and Reform for the Development of

Statistics (STATCAP-CERDAS)

Bank staff and consultants who worked on the project included:

Name Title Unit

Vivi Alatas Task Team Leader, Senior Economist EASPR

Shubham Chaudhuri Lead Economist EASPR

William Wallace Consultant EACIF

Haeduck Lee Senior Economist DECDG

Roksana Khan Consultant EASPR

Noriko Toyoda Consultant EASPR

Dennis Trewin Consultant EASPR

Donald Bartley Consultant EASPR

Frank Jenkins Consultant EASPR

Erwin Ariadharma Senior Public Sector Management Specialist EASPR

Yoichiro Ishihara Senior Economist OPCAE

Budi Permana Procurement Analyst EAPPR

Christina Donna Financial Management Specialist EAPFM

Andry Thamrin Finance Analyst CTRDM

Melinda Good Senior Counsel LEGES

Vivianti Rambe Environmental Specialist EASIS

Yogana Prasta Operations Adviser EACIF

Eka Zarmen Putra Operations Officer EACIF

Amien Sunaryadi Senior Operations Officer EACIF

Dayu Amurwanti Operations Analyst EACIF