SCENARIO PLANNING IN PAM JAYA FOR 2030 IN DEALING WITH FUTURE UNCERTAINTIES FINAL PROJECT In partial fulfilment of the requirements for the master’s degree from Institut Teknologi Bandung By CRYSNARENDRA AJI PRAJNA Student ID: 29320509 (Master of Business Administration Program) INSTITUT TEKNOLOGI BANDUNG August 2024 ii ABSTRACT SCENARIO PLANNING IN PAM JAYA FOR 2030 IN DEALING WITH FUTURE UNCERTAINTIES By Crysnarendra Aji Prajna Student ID: 29320509 (Master of Business Administration Program) Access to clean and safe water is a fundamental human right and a cornerstone of public health and sustainable urban development. PAM JAYA takes full operational control, taking on the responsibility of providing and distributing the clean water supply to DKI Jakarta. PAM JAYA sets targets by 2030 as a commitment and to achieve that, PAM JAYA must deal with future uncertainties. Scenario planning is used to give a better approach to identifying driving forces, scenarios, and their strategies. This research tries to answer key focal issue and research questions on what extensive strategies should PAM JAYA take in the next 6 years to achieve its business target. Qualitative research approach being conducted to predict multiple future scenarios through semi-structured interview. There are 17 driving forces and it resulted in two critical uncertainties: Law Enforcement and Tariff Adjustment. There are four scenarios which are: Harmony Era, Strict Era, Lax Prosperity Era, Injustice Era. Exploring the implications and strategy options for each scenario helps PAM JAYA to deal with future uncertainties. Early warning signals are produced for each scenario as leading indicators to identify in which way is PAM JAYA heading on. Keywords: Scenario Planning, critical uncertainties, PAM JAYA, Clean Water Industry, Non-revenue Water, future studies, Implications and Strategy Options iii ABSTRAK PERENCANAAN SKENARIO DI PAM JAYA TAHUN 2030 DALAM MENGHADAPI KETIDAKPASTIAN MASA DEPAN Oleh Crysnarendra Aji Prajna Student ID: 29320509 (Program Studi Magister Administrasi Bisnis) Akses terhadap air minum yang bersih dan aman adalah hak asasi manusia yang fundamental dan merupakan dasar bagi kesehatan masyarakat serta pembangunan perkotaan yang berkelanjutan. PAM JAYA mengambil kendali operasional penuh, dengan bertanggung jawab menyediakan dan mendistribusikan pasokan air bersih ke DKI Jakarta. PAM JAYA menetapkan target pada tahun 2030 sebagai komitmen, dan untuk mencapainya, PAM JAYA harus menghadapi ketidakpastian di masa depan. Perencanaan skenario digunakan untuk memberikan pendekatan yang lebih baik dalam mengidentifikasi kekuatan pendorong, skenario, dan strategi mereka. Penelitian ini mencoba menjawab masalah fokus utama dan pertanyaan penelitian tentang strategi luas apa yang harus diambil PAM JAYA dalam 6 tahun ke depan untuk mencapai target bisnisnya. Pendekatan penelitian kualitatif dilakukan untuk memprediksi berbagai skenario masa depan melalui wawancara semi-terstruktur. Ada 17 kekuatan pendorong dan hasilnya ada dua ketidakpastian kritis: Penegakan Hukum dan Penyesuaian Tarif. Terdapat empat skenario yaitu: Era Harmoni, Era Ketat, Era Kemakmuran Longgar, dan Era Ketidakadilan. Mengeksplorasi implikasi dan opsi strategi untuk setiap skenario membantu PAM JAYA menghadapi ketidakpastian di masa depan. Sinyal peringatan dini dihasilkan untuk setiap skenario sebagai indikator utama untuk mengidentifikasi arah yang sedang dituju oleh PAM JAYA. Kata kunci: Perencanaan Skenario, ketidakpastian kritis, PAM JAYA, Industri Air Bersih, Non-revenue Water, studi masa depan, Implikasi dan Opsi Strategi iv v By Crysnarendra Aji Prajna Student ID: 29 Master of Business Administration Program Institut Teknologi Bandung Approved Date ………………………. Supervisor Co-Supervisor (Yos Sunitiyoso, ST, M Eng, PhD) (Dr. Sahat Hutajulu S.T., M.M.) vi FINAL PROJECT GUIDANCE Unpublished masters’ final project is registered and available in the Library of Bandung Institut of Technology, and is open for public, provided that the author owns the copyright in accordance with the intellectual property rights that are applicable in the Library of Institut Teknologi Bandung. Bibliographical references are allowed to be used in a limited manner; however, the citation and summarization can only be proceeded upon the author’s permission and must include the scientific norm of stating this final project as the source. This final project must be cited as: consent of the Head of Graduate School, Bandung Institute of Technology. Prajna, C. (2024): Scenario Planning in PAM JAYA for 2030 in Dealing with Future Uncertainties, Masters’ Finalproject, Institut Teknologi Bandung. Reproduction or publication of parts or whole of the final project must be under the vii This final project is dedicated to all people that have willingness to achieve the next chapter in their lives and put incredible legacies in society for a better future. viii ACKNOWLEDGEMENTS Praise The Lord Tuhan Yesus, that I can have an opportunity to study for Master of Business Administration in ITB and completed this final project. I would like to express my greatest gratitude to individuals and groups that contributes to all kinds of support, guidance, and motivation to complete this final project: 1. My sincere gratitude is given to Yos Sunitiyoso, ST, M Eng, PhD and Dr. Sahat Hutajulu S.T., M.M as the final project counselor for having faith in me to complete this final project. It was an honor for me to be able to be mentored by Pak Yos and Pak Sahat. 2. I would like to express my loving gratitude to my family, especially Papa & Mama for pushing me to the limit, having faith in me in many ways to complete this final project. 4. My sincere gratitude also for my boss (Pak Bungaran, Pak Ryan, Pak Ervin) for giving me chance to reach this point. 5. My sincere gratitude also to the interviewee, discussion partner, and any related respondent for contributing to this research. 6. I met a lot of great people in ITB. My great adoration and gratitude go to all SBM-ITB lectures and colleagues who enrich my business knowledge, experience, support and sharing their valuable leadership experiences for our future success and leadership learning. 7. My sincere gratitude also to academic ITB that always reminds me and gives me important information regarding this submission. May God bless academic ITB for supporting the class and the research behind the desk. 3. I would like to express my gratitude to my close person, S., for supporting & helping through up and down of this long war. :) ix TABLE OF CONTENTS ABSTRACT ............................................................................................................. i DECLARATION OF NON -PLAGIARISM .......................................................... iii VALIDATION PAGE ........................................................................................... iv FINAL PROJECT GUIDANCE ............................................................................. v TABLE OF CONTENTS ..................................................................................... viii LIST OF FIGURES ............................................................................................... ix LIST OF TABLES .................................................................................................. x Chapter I Introduction ...................................................................................... 1 I.1 Background .........................................................................................1 I.2 Company Profile ...............................................................................10 I.3 Business Issue ...................................................................................11 I.4 Research Questions and Research Objectives ..................................13 I.5 Research Scope and Limitation.........................................................13 Chapter II Literature Review ........................................................................... 15 II.1 Problem Exploration ........................................................................15 II.2 Literature Review .............................................................................17 II.3 Conceptual Framework ....................................................................23 Chapter III Research Methodology ................................................................... 25 III.1 Data Collection .............................................................................25 III.2 Research Methodology .................................................................26 III.3 Research Design ...........................................................................27 Chapter IV Findings: Business Solution ........................................................... 28 IV.1 Analysis ........................................................................................28 IV.2 Solution and Proposed Implementation Plan ...............................38 IV.3 Justification of Implementation Plan ............................................48 Chapter V Conclusion and Recommendation .................................................. 51 V.1Conclusion ........................................................................................51 V.2Recommendation ..............................................................................53 REFERENCES ..................................................................................................... 54 APPENDICES ………………………………………………………………………… 56 x LIST OF FIGURES FIGURE 1. 1 NUMBERS OF PAM JAYA CUSTOMER 1998 - 2022 SOURCE: (PAM JAYA, 2024A) ............................ 2 FIGURE 1. 2 NUMBERS OF SERVICE COVERAGE 1997 - 2022 SOURCE: (PAM JAYA, 2024A) ................................ 3 FIGURE 1. 3 SERVED AND UNSERVED AREAS FOR CLEAN WATER IN JAKARTA SOURCE: (PAM JAYA, 2024B) .... 4 FIGURE 1. 4 NUMBER OF CUSTOMERS PROJECTION BY 2030 ............................................................................. 5 FIGURE 1. 5 SIGNING MOU NO.1 TAHUN 2022 REGARDING SYNERGY AND SUPPORT FOR THE IMPLEMENTATION OF THE CLEAN WATER SUPPLY SYSTEM IN DKI JAKARTA SOURCE: (JATIM INSTITUTE, 2022) ........................................................................................................................................................... 5 FIGURE 1. 6 CURRENT GROUNDWATER FREE ZONES IN JAKARTA SOURCE: (DKI JAKARTA PROVINCIAL GOVERNMENT, 2021) ................................................................................................................................. 7 FIGURE 1. 7 PPP BETWEEN PAM JAYA AND PRIVATE SECTORS SOURCE: (PAM JAYA, 2023A) ............................ 9 FIGURE 1. 8 PAM JAYA EXISTING CONDITION IN 2022 AND TARGET IN 2030 SOURCE: (PAM JAYA, 2022B) .... 11 FIGURE 2. 1 THE MILESTONE OF PAM JAYA FROM 1998 TO 2023 SOURCE: (PAM JAYA, 2023B) ..................... 15 FIGURE 2. 2 THE ROLE FLOW OF PAM JAYA IN PRE-TERMINATION AGREEMENT AND POST-TERMINATION AGREEMENT SOURCE: (PAM JAYA, 2023B) ............................................................................................... 16 FIGURE 2. 3 SCENARIO PLANNING COMPONENT SOURCE: (GARVIN & LEVESQUE, 2006) ................................ 18 FIGURE 2. 4 STEPS OF SCENARIO PLANNING STAGES SOURCE: (GARVIN & LEVESQUE, 2006) ......................... 19 FIGURE 2. 5 IMPACT AND UNCERTAINTY GRID SOURCE: (DEAN, 2019) ............................................................ 20 FIGURE 2. 6 PORTER’S FIVE FORCES ANALYSIS SOURCE: (PORTER, 2008) ......................................................... 21 FIGURE 3. 1 RESEARCH DESIGN ......................................................................................................................... 25 FIGURE 4. 1 GROUNDWATER-FREE ZONES IN DKI JAKARTA SOURCE: (DKI JAKARTA PROVINCIAL GOVERNMENT, 2021) ............................................................................................................................... 31 FIGURE 4. 2 SERVED AND UNSERVED AREAS 2023 SOURCE: (PAM JAYA, 2024B) ............................................. 34 FIGURE 4. 3 WATER RESOURCES REGULATIONS SOURCE: (ASTRIANI 2021) ..................................................... 36 FIGURE 4. 4 SCENARIO FRAMEWORK ................................................................................................................ 44 xi LIST OF TABLES TABLE 1. 1 THE COMPARISON BETWEEN PROGRESSES AND TARGETS BY 2030 ...............................................